In a significant policy shift, the ministry of road transport and highways has issued the Motor Vehicles Aggregator Guidelines 2025 which for the first time formally permits private bikes to be used as bike-taxis through aggregators within the ambit of the Motor Vehicles Act. These guidelines mark a turning point for the country’s urban mobility ecosystem. They lay the legal foundation for ‘flexible mobility solutions’ by outlining procedures for compliance, fare setting, passenger safety and penalties for ride cancellations. They also provide a model for state governments to follow in allowing and regulating bike-taxi operations within their jurisdictions.
The guidelines came soon after the Karnataka High Court banned bike-taxis in the state, pending the adoption of regulatory guidelines in line with the MVA. The ban in Karnataka, effective from June 16, 2025, sparked public debate and pushback from key stakeholders. Many users and operators have sought to circumvent the ruling by relying on informal arrangements such as WhatsApp messages to offer and access services, highlighting the persistent demand for bike-taxis despite regulatory uncertainty.
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Bans restrict urban mobility
Bans such as those in Karnataka not only restrict passenger mobility in dense urban regions, but also risk undermining India’s broader climate and transport goals. The new national guidelines are therefore a welcome step towards promoting greener, more efficient urban transport.
In the current technological and cost environment, the two-wheeler segment is among the easiest to electrify. Their lightweight design, lower battery requirements and simpler charging infrastructure make electric two-wheelers a practical solution for sustainable mobility.
If state governments adopt the new central guidelines and supplement them with mandates for electric vehicle targets within aggregator fleets, this could substantially support India’s emission reduction goals. It would also encourage more individuals offering bike-taxi services to shift towards electric options.
The concept of using motorcycles to ferry passengers —commonly known as bike-taxis—is well established in many developing countries, especially across Southeast Asia. In India, Goa pioneered the model in 1981, becoming the first state to legalise bike-taxis. Since then, 21 states and union territories have introduced their own guidelines to permit private bikes for commercial rides. However, the uptake has been uneven, and operations remain fraught with regulatory and political hurdles.
In recent years, Delhi has banned bike-taxi services. On the other hand, Maharashtra has introduced draft regulations to allow them, but will only permit electric bikes. India is the world’s largest two-wheeler market. A total of over 292.2 million two-wheelers are registered for private use but only 1.46 lakhs for hire.
More jams ahead
While major metropolitan areas offer a mix of public transport modes, the overall quality, efficiency and reliability of services remains patchy. This gap in dependable public transit has led to an urban mobility crisis and a growing reliance on informal and shared transport solutions such as mini-buses, ride-hailing apps and bike-taxis. However, these alternatives still fall short of meeting the rising demand.
At the same time, rising incomes have accelerated the purchase of personal vehicles, even in rural areas. Still, ownership remains far from saturation; 54 percent of Indian households own a two-wheeler and only eight percent own a four-wheeler. However, the numbers are expected to grow rapidly with economic growth and rising aspirations. The increase in vehicular traffic will further jam the already congested roads in Indian cities.
Across the country, cities already suffer from shrinking road space, encroachments and unplanned urban growth. Traffic congestion continues to worsen, with significant time lost in transit. Two-wheelers and cars together account for about 95 percent of India’s motorised vehicle fleet, with two-wheelers making up approximately 75 percent. This gap may narrow as car ownership grows. But more cars will only add to both traffic congestion and vehicular pollution. Two-wheelers, however, occupy less road space and have a much smaller carbon footprint.
A recent estimate from Delhi shows that the carbon dioxide intensity per passenger-kilometre for two-wheelers is about 41 grams—less than half that of cars and roughly 35 percent lower than that of three-wheelers.
Encouraging the use of private bikes for commercial purposes within a regulated framework that emphasises electrification and safety could be a vital component of India’s transition towards more sustainable urban transport. It also offers a pragmatic solution for addressing the limitations of current infrastructure and services.
Reforms needed
Amid this shifting landscape, auto-rickshaws and bike-taxis have become indispensable for urban mobility, particularly for first and last-mile connectivity in densely populated cities. In 2023 alone, around 318 million bike-taxi rides were estimated to have taken place across India.
Beyond convenience, bike-taxi operations offer an income lifeline to individuals in India’s low and lower-middle-income segments, especially those who already own two-wheelers. The model also creates employment opportunities for gig workers via commercial ride-hailing agreements.
Despite their popularity and economic relevance, bike-taxis are often flagged for safety concerns. Critics also point to incidents of unsafe driving and the absence of robust insurance coverage. Resistance has come from traditional taxi and auto-rickshaw unions, who view bike-taxis as a threat to their livelihood.
This opposition—combined with the absence of clear regulatory frameworks—has prompted bans or restrictions in several regions. But such blanket prohibitions raise serious questions. Without viable alternatives in place, bans risk increasing the cost of travel, especially for low-income commuters. Former users may be compelled to buy personal vehicles, contributing to congestion, emissions and inefficient use of urban space.
Prohibiting bike-taxis without simultaneously strengthening public and shared transport services risks pushing cities into an unsustainable urban mobility trap marked by underutilised vehicles, higher per capita emissions and worsening traffic delays.
Public aggregators to the rescue
A state-owned or cooperative aggregator model could improve transparency in fare setting and commissions, easing tensions between drivers and operators. Fixed commission structures, as opposed to fluctuating rates commonly used by private aggregators, can help build trust and ensure fairer earnings. Public aggregators are also better placed to avoid predatory pricing and the unpredictability of surge fares, offering passengers more stable and affordable travel costs.
Such platforms also allow governments to regulate service quality, enforce safety standards, and generate public revenue through modest commissions—funds that could be reinvested into public transport infrastructure and services.
Some state governments are already experimenting with public aggregator models. The West Bengal government launched the Yatri Sathi app in 2023, offering a zero-commission, direct-to-driver taxi platform. It has been generally well received by both drivers and passengers as an alternative to private aggregators. Kerala’s government-backed app, Kerala Savaari, and Goa’s GoaMiles follow a similar approach.
At the national level, the central government announced in March 2025 that it would launch a taxi-service cooperative called Sahakar Taxi. This app-based cooperative ride-hailing platform will support two, three and four-wheelers. In 2024, Assam became the first Indian state to launch a dedicated, app-based all-electric bike-taxi and delivery service—Baayu—under a government-owned model where the bikes are leased to driver-partners.
The legal recognition of bike-taxis is a reform that acknowledges the evolving realities of urban India. In a context where cities are grappling with worsening congestion and mounting emissions, banning ‘flexible mobility solutions’ is a regressive move. Instead, regulators should view them as part of the solution.
With the central government’s framework in place, the onus is now on states to implement it responsibly to unlock the full potential of shared two-wheeler mobility.
Rahul Chakraborty is an Assistant Professor at the School of Management and Entrepreneurship, Shiv Nadar University (Delhi NCR). This article appeared first on 360.