Every day shuttle rides might get simpler in Maharashtra. The state is setting new guidelines.

A brand new draft coverage—the Motor Car Aggregator Guidelines, 2025—proposes to formally deliver non-public buses and contract carriages below the app-based aggregator framework for the primary time. A replica of the draft, launched on Saturday and reviewed by Mint however not but public, requires operators to carry legitimate permits and bars automobiles older than eight years from use.

If carried out, the transfer might lastly legitimize business-to-consumer (B2C) shuttle fashions like Uber Shuttle, Cityflo and Chalo, which have lengthy operated in a regulatory gray zone. Each Uber and Cityflo have confronted enforcement motion in Mumbai in recent times, with authorities seizing buses and issuing fines for alleged allow violations.

“For a lot of each day commuters, app-based shuttles supply a center floor—extra dependable and cozy than public buses, however nonetheless far cheaper than cabs,” mentioned Amit Kaushik, an unbiased automotive business professional. “They’re particularly helpful for folks dwelling in distant elements of cities that aren’t effectively linked by metro or native trains, giving them a extra reliable method to get to work.”

Queries despatched to Cityflo and Uber didn’t instantly elicit a response.

Draft guidelines sign long-awaited legitimacy

Shuttle companies, the place passengers share rides alongside mounted or semi-fixed routes, usually in buses, for faster and cheaper commutes, have struggled to take off in Maharashtra regardless of sturdy commuter demand. Operators usually research public transport gaps, commuter density, and company clusters earlier than launching routes, with Mumbai, Delhi, and Bengaluru being pure markets resulting from excessive automobile possession and extreme congestion.

Seat costs in these companies usually vary from ₹120– ₹180, in comparison with ₹15 on public transport.

But Uber Shuttle, which launched in Mumbai in 2021, was pressured to close operations within the metropolis and Hyderabad in July 2025, citing regulatory hurdles, low ridership, and excessive prices. Maharashtra’s transport division mentioned Uber and different operators had been working with out legitimate stage carriage permits, gathering over ₹12 lakh in fines and seizing 125 buses in a state-wide crackdown.

Cityflo, which runs 450 buses throughout Mumbai, Hyderabad and Delhi, additionally confronted scrutiny regardless of claiming compliance.

There weren’t any earlier Maharashtra guidelines particularly overlaying app-based buses or shuttles. The earlier state coverage, Aggregator Cabs Coverage 2025, issued on 21 Could 2025, ruled solely cab and auto aggregators, not buses.

The brand new draft, issued by the Maharashtra Transport Division, is the primary to explicitly deliver contract carriage and passenger buses below the aggregator framework.

The brand new draft seeks to shut a long-standing regulatory loophole.

“They lastly give long-awaited legitimacy to app-based bus and shuttle fashions like Cityflo and Chalo. By bringing contract carriage buses below a regulated digital framework, the state is signalling openness to public-private collaboration in city mobility,” mentioned Kaushik.

Authorized consultants say readability is essential.

“The draft goes a great distance in addressing ambiguity across the legality of utilizing contract carriage permits for app-based operations,” mentioned Athira T S, affiliate companion at King Stubb & Kasiva, a regulation agency. “This regulatory readability could make the B2C bus-shuttle mannequin extra financially viable by decreasing compliance danger, enabling long-term fleet funding, and boosting confidence amongst buyers and commuters.”

Nevertheless, whereas the draft gives much-needed readability, some provisions might set off challenges.

“The eight-year car cap may very well be contested as being economically unviable and unconstitutional. Fare-setting mechanisms may additionally result in disputes over base fare willpower. Potential overlaps with state transport undertakings (STUs) on sure routes might change into one other authorized flashpoint,” mentioned Rohit Jain, managing companion, Singhania & Co, a regulation agency.

The draft guidelines transcend legitimizing app-based buses. They set a fare willpower mechanism, capping surge pricing at 1.5 occasions the bottom fare throughout peak hours or festive demand, and lay down circumstances round driver working hours, together with a most of 12 hours per day with not less than 10 hours of relaxation.

Aggregators will even be required to acquire licences from the State Transport Authority or respective RTOs, backed by a safety deposit and licence price linked to fleet measurement.

The Maharashtra transport division has invited public objections and strategies till 17 October 2025, after which the principles are anticipated to be finalized, although no agency timeline has been introduced for notification.

Alternatives—and new obligations

For operators, the principles supply legitimacy but additionally a more durable compliance bar.

They will now present scheduled, tech-enabled, point-to-point companies below a authorized umbrella—interesting to commuters keen to pay greater than public transport however lower than taxis. Nevertheless, compliance necessities reminiscent of driver coaching, insurance coverage, and strict pre-booking norms might increase working prices.

“Explicitly bringing buses and contract carriages into the aggregator fold provides long-awaited authorized cowl, decreasing shutdown danger and enabling route and fleet planning,” mentioned Pratik Shah, Companion at EY. “However the eight-year age cap and fare bands add price self-discipline which will pressure smaller startups.”

Shah added that whereas the draft improves bankability and investor confidence, up-front licence charges and recurring compliance prices imply scale will favour well-funded operators. “Fare guardrails level to volume-over-margin fashions, however Mumbai and Pune’s commuter base can nonetheless help sustainable scale,” he mentioned.

Investor curiosity and market potential

Enterprise capital investments in India’s shuttle sector have totalled about $224 million to date, although outcomes have been blended.

B2C-focused operators reminiscent of Shuttl (acquired by Chalo in 2021) and ZipGo (shut down in 2019) struggled to maintain operations regardless of elevating important capital. Cityflo continues to function on a smaller scale.

Against this, B2B fashions like Routematic and MoveInSync have drawn steadier investor curiosity, collectively elevating over $57 million. Their company tie-ups present predictable demand and a regulatory protect, benefits that B2C companies lack.

Executives within the sector estimate that India’s city shuttle companies might have a complete addressable market of greater than 100,000 buses, representing a income alternative of round $3 billion given present commuter demand in metro and tier-I cities. Individually, intercity bus companies are projected to succeed in $13 billion in worth by 2027, based on a 2021 Redseer report.

Trade executives estimate that cities like Mumbai and Delhi alone require round 30,000 buses every, although deficits stay.

The highway forward

The draft guidelines might reshape how non-public operators match into Maharashtra’s city transport combine. However execution will matter as a lot as intent.

Implementation particulars, together with fare regulation, enforcement consistency and coordination with state undertakings, will decide whether or not the coverage actually opens a brand new path or creates extra bureaucratic detours.

For operators battered by shutdowns and regulatory crackdowns, the draft marks a long-awaited opening to construct app-based shuttle fashions throughout the regulation.