India’s road-transport ministry has proposed lowering the minimum fleet required for a rent-a-cab operator from 50 vehicles to five, a change intended to open the regulated market to smaller businesses.
The proposed framework would allow operators to provide vehicles with or without drivers. Each approved place of operation would need at least two cabs, while the existing requirement to maintain branches in five tourist cities would be removed.
One electronic licence across a state
The proposal replaces separate main and branch licences with a single electronic licence valid throughout a state or Union territory for a uniform fee. Airports, railway stations and bus terminals could be approved as places of operation.
Licence applications and renewals would have a 60-day processing timeline. Requests to add or remove vehicles or operating locations would receive deemed approval after 30 days if the authority does not decide them.
Electronic VAHAN registers and automatic retrieval of vehicle information are intended to reduce repetitive paperwork. For a small fleet operator, these provisions could lower the fixed administrative cost of entering more locations.
The changes remain proposed reforms rather than final operating rules. Businesses should rely on the eventual notified framework and state-level implementation before changing fleets or compliance systems.
Lower entry barriers, higher service obligations
The draft pairs simpler licensing with customer and safety requirements. Vehicles would need location tracking and first-aid kits, while child-restraint systems would be optional. Operators would have to maintain a website, 24-hour grievance support and arrangements for emergency repair and towing.
Drivers supplied by an operator would require police verification. The proposal also links their welfare to the Code on Social Security, 2020. Specified serious offences involving a vehicle or operator-provided driver could reduce the validity of the operator’s licence.
For non-material violations, operators would receive time to correct problems before suspension or revocation is considered. An electronic appeals process is also proposed.
Reducing the fleet threshold could increase formal competition and create opportunities outside large travel markets. The commercial outcome will depend on licence fees, insurance, financing, vehicle utilisation and the cost of meeting the new service standards.
Source: Ministry of Road Transport and Highways via PIB, 12 November 2026.
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