The Ministry of Road Transport and Highways has proposed easing the rules for setting up car hire businesses, including cutting the minimum fleet requirement from 50 vehicles to five. The new rules will apply to both self-drive cars and cars hired with a driver.
The government believes the lower threshold will encourage small entrepreneurs, startups and local operators to enter the market. Existing operators will also be able to expand into new locations with a fleet of just five cars.
The proposals are part of the draft Rent-a-Cab Scheme 2026, which will replace the 37-year-old framework from 1989. The updated guidelines also provide for online licensing, time-bound approvals, strict safety, insurance and operational requirements, and a formal grievance redress mechanism.
