After nearly nine years of unregulated growth, the government has, for the first time, formally defined ride-sharing and ride-hailing services in Nepal, signalling a major step toward bringing digital mobility platforms under a unified regulatory framework.

The proposed Digital Mobility Service Operation Standards, 2026, published by the Ministry of Physical Infrastructure and Transport for public consultation, lays out definitions, licensing procedures, fare ceilings, safety provisions and compliance mechanisms for operators.

According to the draft, ride-sharing refers to multiple passengers sharing a vehicle while travelling in the same direction to improve efficiency, reduce costs and minimise traffic congestion and environmental impact. Ride-hailing, meanwhile, is defined as booking a vehicle—either with or without a driver—through a digital platform for private use, with integrated payment and tracking features.

Prepared by the Department of Transport Management, the draft also introduces the broader concept of “digital mobility service”, encompassing app-based or web-based transport services that connect passengers with vehicles on demand.

The proposed framework requires all service providers to obtain permission from the department and register in a centralised digital system designed to oversee operations nationwide. Applications can be submitted either in person or online, and licences will be issued after verifying legal and technical compliance.

Under the draft, the central system will act as an integrated electronic platform for monitoring service providers, ensuring transparency and enforcing regulations across the country. Operators will be responsible for maintaining service quality, updating documentation, providing operational data and paying applicable taxes.

Platforms currently operating under various models will be required to register within a timeline to be set by the department. Provincially regulated services must also integrate their systems with the central database through application programming interfaces (APIs), allowing real-time data exchange for ride tracking, fare calculation and payment processing.

The department will have the authority to fine operators or cancel licences in cases of non-compliance.

The draft introduces new requirements for vehicles used in ride-hailing services, mandating that their registration explicitly state “Digital Mobility Service” as the purpose. Such vehicles will be classified as public transport. However, this requirement will not apply to ride-sharing vehicles.

Operators must renew their licences annually.

Nepal’s ride-sharing ecosystem began in 2017 with the launch of Tootle, followed by the entry of Pathao, a Bangladesh-based platform, in 2018. Since then, the sector has expanded rapidly despite the absence of clear regulations.

Asheem Man Singh Basnyat, managing director of Pathao Nepal, welcomed the move but said the draft falls short in addressing emerging industry needs.

“It took the government seven years to bring regulations, but the draft does not appear forward-looking,” he said. “For instance, it does not classify four-wheel services. Platforms like ours offer multiple categories such as economy and premium, which need to be recognised.”

He also pointed out that the draft remains unclear on whether taxis can participate in ride-sharing services.

The proposal requires all vehicles operating under digital mobility platforms to display a standardised sticker with a QR code specified by the department. Service providers will be responsible for producing and distributing the stickers, while the government will determine their design and security features.

The QR code system is intended to allow passengers and authorities to verify vehicle and driver details. However, Basnyat warned that the provision could unintentionally increase offline rides.

“Earlier, when driver uniforms were made mandatory, more passengers began hailing rides directly on the street instead of using the app,” he said. “This could happen again with visible identification.”

He suggested imposing steep penalties—ranging from Rs20,000 to Rs50,000—on drivers who conduct offline rides to discourage such practices.

The draft also proposes an annual registration fee for digital mobility vehicles—Rs1,000 for two-wheelers and Rs5,000 for four-wheelers—to be deposited in a dedicated fund. Ride-sharing providers, however, will be exempt from these charges.

Vehicle standards have also been outlined. Internal combustion engine vehicles used for ride-hailing must be less than 15 years old and comply with government pollution standards. Electric vehicles must have a minimum motor power of 1.5 kW and a maximum speed of 40 km per hour.

The framework sets fare limits, capping base rates at Rs25 per kilometre for two-wheelers and Rs55 per kilometre for four-wheelers. Night-time fares may increase by up to 20 percent depending on conditions.

Service providers will be allowed to charge a maximum commission of 10 percent on fares, with the remainder going to drivers.

The draft also emphasises social protection and safety. Companies must provide life insurance for drivers and riders and enrol them in the Social Security Fund. They are also required to operate 24-hour emergency response and grievance handling systems staffed by trained personnel.

To address safety concerns, especially for women, the draft mandates an option for female passengers to choose female drivers or riders.

Strict penalties have been proposed for misconduct, including harassment, unsafe driving, offline operations and driving under the influence. Under a zero-tolerance policy, service providers must cooperate with authorities to ensure accountability and compensation for victims.

An “accident fund” will also be established to provide compensation to passengers, drivers and riders. The fund will be financed through a one percent deduction from passenger fares and a 0.5 percent contribution from service providers’ daily income.

While the draft marks a significant step toward formalising Nepal’s digital mobility sector, industry stakeholders say further revisions will be needed to ensure it keeps pace with a rapidly evolving market.

Ganeshman Rai, information officer at the department, said since the draft has been made public for their feedback, the department hopes the process will end within 15 days and the standards will come into implementation soon.