Chandigarh suspends Uber and Rapido licences for six months over rule violations

The action follows more than a year of regulatory proceedings, with the transport authority citing shortcomings in driver protection, fare compliance and documentation as Chandigarh tightens oversight of app-based mobility platforms.

The Chandigarh administration has suspended the aggregator licences of Uber and Rapido for six months, tightening regulatory scrutiny of app-based mobility services operating in the city. The suspension came into effect on September 8 and covers Uber India Systems Private Limited and Roppen Transportation Services Private Limited, which operates Rapido.

The action was taken by the State Transport Authority (STA) under Rule 17 of the Chandigarh Administration Motor Vehicles Aggregators Rules, 2025. The authority said the two companies had been given repeated opportunities to comply with the rules through notices, inspections and hearings conducted over more than a year.

According to the STA, the companies failed to adequately address the regulatory concerns or furnish the documents required by the authorities. The alleged violations include inadequate health and term insurance coverage for drivers, with particular concerns involving bike-taxi captains, as well as non-compliance with the fare structure notified by the administration.

Driver insurance and fare compliance under scrutiny

The latest action highlights two areas that have emerged as key points of regulatory concern for app-based transport platforms: protection of drivers and adherence to government-prescribed fares. The STA said the companies did not satisfactorily resolve the issues despite being given multiple opportunities to do so.

The authority's decision means the licences of Uber and Rapido will remain suspended for six months from September 8. The move adds to growing regulatory pressure on ride-hailing companies to align their operations with Chandigarh's framework for motor vehicle aggregators.

The administration has been enforcing the 2025 rules through inspections and compliance proceedings, with companies expected to meet requirements covering areas such as driver welfare, documentation and fare-related obligations.

Ola faced similar suspension in June

Uber and Rapido are not the only major ride-hailing platforms to face regulatory action in Chandigarh. In June, the STA suspended the aggregator licence of ANI Technologies, the operator of Ola, for six months over alleged violations of the same rules.

The proceedings against Ola followed complaints concerning driver insurance and training, the applicable fare structure and the company's subscription-based model. The company was first directed to comply with the regulations in July 2025 and was issued another direction two months later.

A committee examining Ola's compliance subsequently found that the company had vacated its local office nearly a year earlier without informing the authorities. The STA also said that repeated notices and meetings had failed to produce satisfactory resolution of the reported violations.

The suspension of Ola, followed by the action against Uber and Rapido, marks a broader enforcement drive by the Chandigarh administration. With the city's aggregator framework placing greater emphasis on regulatory compliance, driver protection and fare adherence, ride-hailing companies operating in the region are facing increased scrutiny over their local practices.