NEW DELHI: The Union Ministry of Road Transport and Highways (MoRTH) has proposed letting a car rental business run on as few as five vehicles, down from 50, in a draft rewrite of the Rent-a-Cab Scheme 2026 that would replace the 1989 rules in their entirety for the first time in 37 years.
Under the draft, an operator would need at least five cars, two of them stationed at each place of operation. The ministry's reasoning is that a lower entry threshold brings in small operators, local firms and start-ups, and lets existing companies open in more cities without carrying a large idle fleet. The 1989 framework was amended in 2021, but only to extend it to battery-operated cabs and vehicles running on methanol and ethanol that are exempt from permits.
Licensing would move online, with a flat fee of Rs 25,000 regardless of fleet size or number of locations, applications processed within 60 days and a licence valid for five years. Requests to add or drop locations and vehicles would be treated as approved if no decision is taken within 30 days. Penalties, including fines and suspension or cancellation, would be graded and decided by state governments.
The draft also covers chauffeur-driven rentals, which the 1989 scheme largely did not, and requires drivers to hold valid licences, cleared police verification of character and antecedents, no unpaid challans and coverage under the Code on Social Security, 2020. Vehicles would have to be under nine years old, with valid registration, fitness and pollution certificates, paid motor vehicle tax and comprehensive insurance for the renter, driver and all occupants, and must be clear of specified challans and unpaid tolls and must not figure in the National Crime Records Bureau's crime database.
Safety conditions include location tracking devices, child restraint systems, first-aid kits and round-the-clock customer care, with website complaints closed within 24 hours and driver complaints investigated within seven days. The ministry has invited comments until December 5 and targets a rollout next year.
(With inputs from media reports)