Start a cab rental firm with 5 cars: Govt proposes major rule overhaul | India News
NEW DELHI: From next Jan, smaller entrepreneurs, local firms and start-ups would be able to get licences under “Rent a Cab” scheme, as govt has proposed reducing the minimum fleet requirement for such operators to five vehicles from 50, with at least two cabs per place of location.The requirement for branches in five tourist cities is being removed, further lowering entry barriers for smaller entrepreneurs, local rental companies and start-ups. The draft Rent-a-Cab Scheme, 2026, also explicitly extends its coverage to vehicles rented with or without drivers, which will widen consumer choice. This means a person who hires a cab from a licenced operator for personal use can either drive it themselves or avail the service of a driver provided by the operator.The proposed scheme, which will replace the 1989 framework, introduces sweeping changes to licencing, safety, insurance and operational requirements.Operators will be able to obtain a single electronic licence, valid across the state or Union territory, for a uniform fee of Rs 25,000, replacing separate main and branch licences. Approved operating locations can include airports, railway stations and bus terminals.The ministry has proposed a 60-day timeline for grant and renewal of licences, which will remain valid for five years. Applications for adding or removing vehicles or operating locations will be deemed approved if authorities do not complete the process within 30 days. Electronic Vahan registers and automatic retrieval of vehicle data are also expected to reduce paperwork.
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The draft introduces a nine-year age limit for vehicles and mandates valid registration, fitness and pollution certificates, payment of motor vehicle taxes and comprehensive insurance covering occupants as per the vehicle’s passenger capacity. Vehicles must also be free of specified pending challans and unpaid toll dues and should not figure in the NCRB’s police crime database.For chauffeur-driven rentals, operators must provide drivers with valid licences and police-verified antecedents. The cabs must also have location-tracking devices, first-aid kits and optional child restraint systems. Operators must maintain websites, provide round-the-clock grievance support and arrange emergency repairs and towing when needed. Website-based complaints must be resolved within 24 hours, while inquiries into complaints against drivers must be completed within seven days.
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