The Union government is planning to limit commission earned on rides by cab aggregators like Uber and Ola to 10 percent, reported The Economic Times. The cap will significantly limit the revenue of cab aggregators who currently earn around 20 percent in forms of commission.

In addition to this, the new central guidelines shared with state governments also allows the latter to levy a charge on aggregators’ earnings, the report added. “We are planning to release the draft (aggregator rules) for public feedback sometime next week … It will largely be in line with the guidelines that were shared, with a few small changes,” a senior official from the Ministry of Road Transport and Highways, which formulated the guidelines, was quoted as saying in the report.

The final rules for cab aggregators, which will be notified under the Motor Vehicle Act, 2019, are likely to be formalised before the end of the year. The guiding document details various aspects such as the fee caps, regulations on surge pricing, passenger and driver safety, penalties for drivers and aggregators, and licencing norms for aggregators, the report said Further, the government could mandate an insurance cover of Rs 5 lakh for each rider.

The development comes as key players in the economy have started seeing cab aggregators as a smart solution to traffic congestion and pollution plaguing various cities across the country. “Municipalities need to recognise that this (ride-hailing) is something good for the country. Unfortunately we have been facilitating only the sale of private vehicles through our policies,” said an official to the media.