Ola, Uber To Pay Customers If Drivers Cancel: New Government Policy

In a major move to protect passengers using app-based cab hailing services, the Maharashtra government has approved a new policy that directly solves one of the biggest customer concerns- drivers cancelling confirmed bookings! Under the revised Aggregator Cabs Policy 2025, if a driver cancels a confirmed ride on platforms like Ola or Uber, the commuter will now receive a penalty payment credited to their account.

This policy marks a significant shift in how ride cancellations are handled. Until now, passengers were penalized for cancelling a ride, while the cab was on its way for pick-up. If the driver cancelled, the penalty used to be usually absorbed by the platform or ignored.

But with the new rules in place, drivers who cancel after accepting a ride will face a financial penalty as well—and the affected customer will get the same amount as compensation.

This will benefit users greatly, as it has become common these days for drivers to cancel confirmed bookings, for various reasons. Such actions often cause major inconvenience to riders. The new policy amendment could get this fixed completely.

Surge Pricing Capped!

Maharashtra's new state policy also puts an end to excessive surge pricing by ride hailing platforms. App-based fares will no longer exceed 1.5 times the state-approved base fare, regardless of peak hours, weather, or demand. This ensures that passengers aren’t forced to pay unfair rates like ₹1,500 for short trips, which previously, was common during high-demand periods.

"Until now, fares would spike up to five times during peak hours or rain, with some passengers paying over ₹1,500 for short distances,” said State Transport Commissioner Vivek Bhimanwar. “This will no longer be allowed. The new policy mandates a cap on surge pricing, both day and night, at 1.5x the government-approved base fare. App algorithms must be updated accordingly.”

Additionally, discounts offered on rides are now capped at 25%, preventing platforms from manipulating pricing through unsustainable promotional offers.

“So far, it was only riders who faced fines for cancelling. Now, drivers who cancel after accepting a ride will also be penalized,” Bhimanwar remarked about the revised cancellation policy.

Safer Commutes For Women Riders

The policy also introduces stricter safety guidelines, especially for women using ride-pooling options. Only female drivers and co-passengers will be allowed when a woman opts for pooling, providing more comfort and a safer environment.

Drivers Too Will Benefit

While the focus is on consumer protection, the policy also introduces measures that benefit drivers. Platforms must now ensure that at least 80% of the fare goes to the driver, improving their earnings and reducing ride refusals.

Drivers with poor ratings (below 2 stars) must undergo mandatory training, and all drivers will be subject to police verification and background checks. The aforementioned training sessions will be held at designated training centres.

Mandatory In-App Safety Tools

The policy mandates that all apps must include emergency contact features and comply with updated government standards. New technical guidelines will be issued soon to ensure platforms implement all changes efficiently.

This amendment to the policy stems from the previous Supreme Court directives that led to a special committee being formed, helmed by Sudhir Kumar Srivastava. The new framework is based on the observations and findings made by the panel.

The transport department will soon issue formal instructions to companies like OLA and Uber, detailing the specifics of the amended policy. The aggregators will have to adhere to these for smooth operations. Ride hailing majors are yet to make official responses about the amendment.