NEW DELHI: In a move that could make it easier for more players to enter and expand in the self-drive and chauffeur-driven car rental business, the road transport ministry has proposed reducing the minimum fleet requirement to just five vehicles from the existing 50. The draft scheme also explicitly extends its coverage to rental vehicles offered with or without drivers.The road transport ministry has proposed sweeping changes in the draft Rent-a-Cab Scheme, 2026, which would be the first comprehensive replacement of the 1989 framework in 37 years. A limited amendment was carried out in 2021 by extending its coverage to battery-operated cabs and those running on methanol and ethanol that are exempt from permit requirements.The reduction in the minimum fleet requirement to just five vehicles — a minimum of two vehicles stationed at each place of operation — is likely to encourage smaller entrepreneurs, local car-rental companies and start-ups to enter the business. It may also help existing operators expand into more locations without having to maintain a large fleet.The proposed scheme, which ministry targets to roll out from next year also introduces stricter safety, insurance and operational requirements for companies renting out cars and at the same time it proposes to introduce online licencing, time-bound approvals and a formal grievance redressal mechanism. It proposes to fix the licencing fee at Rs 25,000, irrespective of the size of the fleet or the number of operating locations.The proposed framework also introduces a nine-year age limit for vehicles; valid registration, fitness and pollution certificates, paid motor vehicle tax and comprehensive insurance covering the renter, driver and other occupants up to the vehicle’s passenger capacity. Vehicles must also be free of specified pending challans and unpaid toll fees, and must not figure in the National Crime Records Bureau’s police crime database.Another major departure in the proposed scheme is it explicitly covers renting vehicles with or without drivers. The 1989 framework was primarily designed for self-drive rentals. Operators will now be required to provide drivers with valid licences, police-verified character and antecedents, no unpaid challans and welfare coverage under the Code on Social Security, 2020.The draft also introduces passenger-safety requirements, including vehicle location tracking devices, child restraint systems, first-aid kits and round-the-clock customer care. It proposes that operators must resolve website-based grievances within 24 hours and complete an inquiry into complaints against drivers within seven days.As per the draft, licencing will also become digital. Applications and renewals will be submitted electronically, with authorities required to process them within 60 days. The licence will remain valid for five years. Applications for adding or removing operating locations or vehicles will be deemed approved if authorities do not decide within 30 days.
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The new framework also proposes graded penalties for violations, including fines and suspension or cancellation of licences. These will be decided by state govts.The ministry has invited stakeholder comments on the draft until December 5.
