The Uttar Pradesh Transport Department has released a draft of the ‘UP Motor Vehicles (Aggregator and Delivery Service Provider) Rules, 2026,’ proposing sweeping reforms for app-based cab and delivery services — including mandatory licensing, insurance cover, and strict penalties for unjustified cancellations.
LUCKNOW — The Uttar Pradesh government is set to crack down on arbitrary ride cancellations by cab aggregators such as Ola and Uber. Under a draft regulatory framework issued by the state’s Transport Department, drivers who cancel a booked ride without a valid justification will face a deduction of 10 per cent from their total fare — while the affected passenger will receive a corresponding concession on their next booking.
The proposed ‘Uttar Pradesh Motor Vehicles (Aggregator and Delivery Service Provider) Rules, 2026’ has been put into the public domain for feedback. The department has invited objections and suggestions from the general public and relevant stakeholders within a period of 30 days.
Cancellation Penalties: What the Rules Say
The draft rules establish a two-sided accountability framework for cancellations. If a driver cancels a ride after it has been booked — without providing an acceptable reason — 10 per cent will be deducted from the applicable fare. The passenger affected by such a cancellation will be entitled to a concession of equivalent value on their subsequent booking.
Passengers are not exempt from penalties either. Should a rider cancel a confirmed booking, a charge amounting to 10 per cent of the fare — subject to a maximum of ₹100 — will be levied on their next transaction. The provision is intended to discourage frivolous bookings and protect driver earnings.
“The new regulations will enhance transparency in services and bolster passenger safety.” — Uttar Pradesh Transport Department
Mandatory Licensing for All Aggregators; Fee Set at ₹5 Lakh
Under the proposed framework, all aggregator platforms, delivery service providers, and e-commerce-linked transport operations in the state will be required to obtain a licence from the Transport Department. Applications must be submitted online and must be accompanied by an application fee of ₹25,000 and a licence fee of ₹5 lakh. In addition, companies will be required to furnish a security deposit ranging between ₹10 lakh and ₹50 lakh, depending on the number of vehicles operated on the platform. The licence, if granted, will be valid for five years.
₹10 Lakh Accident Cover for Drivers; ₹5 Lakh for Passengers
Passenger and driver safety has been placed at the centre of the proposed rules. Aggregator companies will be mandated to provide insurance coverage of at least ₹5 lakh per passenger. For drivers, the requirements are more comprehensive: companies must ensure health insurance coverage worth ₹5 lakh, along with accident insurance coverage of ₹10 lakh.
Stringent Driver Onboarding: Aadhaar, Police Check, 40-Hour Training
The draft rules also lay down strict eligibility criteria for drivers seeking to be onboarded onto any aggregator platform. The following conditions have been made mandatory:
- Aadhaar-based identity verification
- Police character verification
- Minimum two years of prior driving experience
- Completion of 40 hours of mandatory training before onboarding
Vehicle Standards: GPS Mandatory, 12-Year Age Cap
Vehicles listed on aggregator platforms will be required to possess valid registration, a fitness certificate, insurance, a pollution certificate, and a GPS tracking system. Vehicles older than 12 years will not be eligible for enlistment on any platform, ensuring that ageing fleets are gradually phased out of service.
Background and Next Steps
The release of this draft follows growing complaints from commuters across Uttar Pradesh about arbitrary ride cancellations, substandard vehicles, and inadequate safety protocols on popular app-based taxi platforms. Several Indian states have moved to regulate aggregators in recent years, with Uttar Pradesh now joining that list with one of the more comprehensive frameworks proposed to date.
The department has opened the draft for public comment. Stakeholders — including platform companies, driver unions, and consumer advocacy groups — have 30 days to submit objections or suggestions before the rules are finalised.
Key Highlights at a Glance
| Provision | Detail |
|---|---|
| Driver cancellation penalty | 10% deduction from fare; passenger gets concession on next ride |
| Passenger cancellation penalty | 10% of fare or ₹100 maximum, charged on next booking |
| Licence fee | ₹5 lakh + ₹25,000 application fee |
| Security deposit | ₹10 lakh – ₹50 lakh (fleet-size dependent) |
| Licence validity | 5 years |
| Passenger insurance | Minimum ₹5 lakh |
| Driver health insurance | ₹5 lakh |
| Driver accident insurance | ₹10 lakh |
| Driver training | 40 hours mandatory pre-onboarding |
| Vehicle age limit | Not older than 12 years |
| Mandatory driver checks | Aadhaar verification, police character check, 2 years’ experience |
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