The ride-sharing service has been listed as a service-oriented industry under the Industrial Enterprises Act 2020.

The government amended the Act to include ride-sharing as a service-oriented industry and has been published in the Nepal Gazette on February 1. This gives ride-sharing companies legal status, seven years after they started services in Nepal.

With the amendment to the Act, the Bagmati Province government has said it is in the final stages of introducing a legal framework for app-based ride-sharing services.

The draft of the Ride-Sharing Guidelines has been finalised, Balram Niraula, secretary at the Bagmati Province Ministry of Labour, Employment and Transport, told the Post on Monday.

“We will send the draft to the Economic Affairs and Planning and Law ministries for their approval,” Niraula said. “Once the ministries approve the draft, it will be tabled at the provincial cabinet.”

According to Niraula, it would take a month to complete the process.

The plan comes ahead of the Nepal Investment Summit, which is set to start on April 21 to promote Nepal as an investment-friendly country.

The draft ride-sharing guidelines have proposed vehicle registration. Ride-sharing drivers have to register their cars and motorbikes similarly to traditional taxis and have to operate under the regulation of the Ministry of Transport, he said.

The companies have to renew their operations annually at the transport management offices.

The guidelines will also regulate the fare. The guidelines have proposed mandatory insurance for passengers.

In January 2019, the government cracked down on ride-hailing platforms like Tootle and Pathao, but public pressure forced it to back down as the ride-hailing apps had changed the way Nepalis travelled.

Subsequently, in February 2020, the Patan High Court ordered the government to regulate ride-hailing services.

Bagmati province declared ride-hailing services legal in June 2022, but it did not issue any guidelines or policy. Ride-hailing companies were permitted to operate mobile apps by registering with the Transport Department.

The Motor Vehicles and Transport Management Act 1993 has mentioned that vehicles registered for private use should not be used for public transportation.

The law also bars vehicle owners from using their vehicles for other than declared purposes.

The first Nepali ride-sharing app was launched in 2017.