However, a fragmented regulatory landscape has constrained its growth, with states adopting divergent policies despite the Centre’s Motor Vehicle Aggregator Guidelines, 2025 enabling them to permit bike taxis. A central friction point is whether private, ‘white number plate’ motorcycles should be allowed to carry out commercial activities, when groups such as auto rickshaw and cab drivers have to pay additional licence fees and other statutory dues to drive commercial vehicles.

Electrification requirements, platform-authorised usage model

Electrification has been another major sore point. Though some states are allowing private motorcycles to be used as bike taxis, there is an increasing insistence on fleet electrification. Delhi’s Motor Vehicle Aggregator and Delivery Service Provider Scheme, for instance, proposes that only electric bike taxis be permitted. Transport aggregators, on the other hand, argue that because electric vehicles have a higher upfront cost, and many already own a traditional internal combustion engine vehicle, electrification requirements should be brought in gradually.

“Electrification should be promoted through phased timelines and incentive-based policies rather than immediate exclusion of internal combustion engine (ICE) vehicles,” the CUTS International report said, echoing claims made by online transport aggregators. “States should further recognise bike taxis as instruments of revenue generation through accessible, lightweight permit models that do not require the mandatory commercial conversion of private motorcycles.”

Rather than mandating permanent commercial conversion, state governments should adopt a platform-authorised usage model, supported by supplementary insurance endorsement, digital traceability, and clear accountability norms, the report said. Such an approach, it added, would reduce entry barriers while maintaining regulatory oversight, and “shift governance from reactive litigation toward predictable, innovation-enabling regulation that balances safety, labour inclusion, and urban mobility efficiency”.