Bike Taxi Ban: Govt. Greenlights Private Motorcycle Taxi Services Nationwide

The central government has made a landmark decision by authorising private motorcycle usage for commercial passenger transport through digital platforms, pending state-level approvals, news agency PTI has reported. This policy change delivers key regulatory framework for the country's shared transportation sector.

New Framework

The Ministry of Road Transport and Highways unveiled its comprehensive 'Motor Vehicles Aggregator Guidelines 2025', establishing what officials describe as a balanced regulatory approach. The framework prioritises passenger safety and driver welfare while enabling technological advancement in urban mobility.

"The state government may allow aggregation of non-transport motorcycles for journey by passengers as shared mobility through aggregators resulting in reduced traffic congestion and vehicular pollution, along with providing inter alia affordable passenger mobility, hyperlocal delivery, creating livelihood opportunities," the guideline said, as per PTI.

Authority Of State Governments

Under the new regulations, state administrations receive authority to permit private motorcycle aggregation for passenger services. The guidelines reference Section 67 of the Motor Vehicles Act, granting states discretionary power over local implementation.

The framework also empowers states to establish fee structures for platform operators. "The state government may, under sub-section (3) of Section 67 of the Act, impose fees on the aggregator for issuance of authorisations permitting non-transport motorcycles to undertake journeys through such aggregator, on a daily/ weekly/ fortnightly basis, as may be determined by the state government," it added.

What Bike Taxi Platforms Say

The policy announcement provides significant relief for major bike taxi platforms including Rapido and Uber, which previously navigated uncertain legal territory. Recent enforcement actions in Karnataka, including service bans that triggered public demonstrations, highlighted the  need for clear regulations for bike taxi platforms.

The mobility companies have expressed strong support for the government's decision, emphasising its potential to accelerate innovation and expand accessible transportation options while generating employment opportunities.

An Uber representative praised the guidelines as a "forward-looking step toward fostering innovation and regulatory clarity."

Rapido particularly celebrated the activation of Clause 23 within the MVAG 2025 framework, which specifically enables private motorcycle aggregation for passenger transportation.

Market Transformation

The updated guidelines represent a significant revision of the original 2020 Motor Vehicle Aggregator Guidelines, implemented under the Motor Vehicles Act of 1988. The initial framework required updating due to dramatic shifts in India's mobility landscape over the past five years.

Since 2020, consumer demand has expanded across multiple transportation categories, including bicycle sharing, electric vehicle adoption, and three-wheeler services. This diversification has broadened the customer base and necessitated more comprehensive regulatory coverage.