• Ride-hailing companies need to obtain licenses from states
  • States will be allowed to set the maximum fares to be charged

India’s central government has advised state administrations to issue licenses to app-based ride-hailing service providers, according to people familiar with the matter.

The guidelines, prepared by the Ministry of Road Transport and Highways, mandate ride-hailing companies obtain permits from respective state transport departments to operate in a region, the people said asking not to be identified before a public announcement. Mayank Agrawal, spokesman of the ministry, said he couldn’t immediately comment when reached by telephone in New Delhi.

The rules, which aren’t binding, if implemented by the states will be a boost for Uber Technologies Inc. and its bigger competitor Ola that have faced bans in some cities such as capital New Delhi. This month China also proposed rules for ride-booking services that also ask operators to obtain licenses from local authorities and offer cars that are registered for commercial use.

The ride-hailing companies must not own or lease any vehicle, employ any drivers or represent themselves as a taxi service unless they are also registered as a taxi operator, according to a copy of the 6-page advisory reviewed by Bloomberg News.

The states may set the maximum fares to be charged to provide a level playing field with taxis, according to the advisory. The vehicles to be offered must be equipped with a location tracking device as well as an emergency safety button.

Drivers, who offer their services on multiple platforms, will need to have a commercial license and the company will have to obtain a police verification certificate.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE