Advocate Suman Dhungana • Aug 4, 2026
After a long and arduous drafting process spanning multiple rounds of stakeholder consultation and regulatory deliberation, the Ministry of Physical Infrastructure and Transport has finally issued the draft Digital Mobility Service Operation Standard, 2082 - Nepal's first dedicated legal framework for app-based ride-sharing and ride-hailing platforms. While the standard brings welcome legal certainty to a sector that has long operated in a regulatory grey zone, its prescriptive fare caps, commission ceilings, and compliance architecture signal a decidedly restrictive rather than enabling regulatory posture.
The Ministry of Physical Infrastructure and Transport has released the draft Digital Mobility Service Operation Standard, 2082 (डिजिटल मोविलिटी सेवा सञ्चालन सम्बन्धी मापदण्ड, २०८२), the first dedicated regulatory framework for app-based ride-sharing and ride-hailing platforms operating in Nepal. The draft standard has been issued to bring uniformity to regulation across the federal, provincial and local levels, to give effect to the Supreme Court's order in Writ No. 075-WO-0755, and to bring platforms such as Pathao, InDrive, Tootle and similar operators within a clear licensing, safety and labour framework for the first time.
Our local attorneys summarize the key provisions of the draft standard and outline its practical implications for digital mobility platforms, vehicle owners, drivers and investors in Nepal.
What Is the Legal Basis and Objectives of Digital Mobility Service Operation?
The draft standard has been approved at the ministerial level by the Government of Nepal, pending finalization. Its stated objectives are to:
- Regulate app-based ride-sharing and ride-hailing platforms in line with established safety standards;
- Bring service providers, vehicles and drivers under a formal system of regulation and management;
- Improve service quality and ensure convenient access for citizens; and
- Create consistency across laws made by all three tiers of government (federal, provincial and local) on this subject, while implementing the Supreme Court's directive in Writ No. 075-WO-0755.
The standard takes effect nationwide from the date it is approved by the Ministry and will apply to every "digital mobility service" - defined broadly to include both ride-sharing (pooling multiple passengers travelling a similar route in a single vehicle) and ride-hailing (a passenger booking a dedicated vehicle and driver through an app for private use).
What Are the Key Definitions Under the Digital Mobility Service Operation Standard?
The draft standard introduces a detailed set of definitions that shape its scope, including:
- Digital Mobility Service: Transport service arranged through an app or webpage that connects passengers with a vehicle or driver, with transparent fare calculation and trip tracking.
- Service Provider: A firm, company or cooperative registered with and licensed by the Department of Transport Management to operate a digital mobility service through an app - a term that also extends to vehicle owners and drivers affiliated with the platform.
- Central System: A unified electronic system to be operated by the Department of Transport Management for overall management of digital mobility services nationwide.
- Digital Block: The act of barring a person from using a digital mobility service.
Base Fare, Fluctuated (Surge) Fare, Vehicle, Driver, App, Telecommunication Device, Regulation, Ministry, Department and related terms are also defined, largely tracking the Vehicle and Transport Management Act, 2049 (1993) and its Regulations, 2054 (1997).
How Can Ride-Sharing and Ride-Hailing Service Providers Obtain a Licence and Register in Nepal?
Chapter 2 of the draft standard sets out a formal licensing regime:
- A service provider must obtain operating permission from the Department of Transport Management and must be compulsorily registered in the Department's Central System before commencing operations.
- Applications must be submitted in the prescribed format (Schedule-1), and permission is granted only after a Legal and Technical Compliance review, conducted by a dedicated review committee comprising members from the Department's technical, vehicle, information technology and legal divisions, with final approval by the Director General.
- Approved service providers receive an operating permit in the prescribed format (Schedule-2).
- Existing platforms operating under various names prior to the standard coming into force must register as a "digital mobility service" within the time frame specified by the Department.
- Ride-sharing and ride-hailing services already regulated under provincial law must also be integrated with the Central System via API.
- Service providers are responsible for providing details of affiliated drivers, vehicles and staff, maintaining service quality, keeping documentation updated, and paying applicable income tax and other revenue. Non-compliance with Department directives can result in warnings, fines, or suspension/cancellation of the operating registration.
What Are the Vehicle Registration, Identification, and Quality Requirements for Digital Mobility Services?
- Vehicles used for ride-hailing must have their "purpose" formally endorsed as digital mobility service in the vehicle registration book (this requirement does not apply to ride-sharing).
- Vehicles used in digital mobility services are treated as public vehicles for regulatory purposes and require annual renewal, with renewal fees set under provincial law.
- Every vehicle must display a QR-code sticker, in a design and format determined by the Department, containing details such as the service provider's name, permit number, vehicle registration details, and the driver's name, photo and licence information. The sticker is valid for one year and can be checked by passengers, traffic police and authorized regulators.
- Vehicle quality standards are prescribed separately for two-wheelers and four-wheelers used in ride-hailing (e.g., vehicle age not exceeding 15 years from manufacture, emission compliance for internal combustion vehicles, minimum motor power for electric vehicles, and minimum boot space of 200 litres for four-wheelers).
- Drivers must meet minimum eligibility requirements - at least 18 years of age, holding a licence for at least one year, free from drug/alcohol dependency, physically and mentally fit, without a criminal record, able to operate the app, and familiar with traffic law - and must be screened, life-insured and enrolled in the Social Security Fund before being engaged.
- Vehicles may also be used part-time (up to four rides a day) without requiring formal purpose endorsement, subject to displaying the QR sticker and paying a nominal annual "service affiliation fee" (NPR 1,000 for two-wheelers, NPR 5,000 for four-wheelers, deposited to the Federal Consolidated Fund) - a fee that does not apply to ride-sharing.
How Does the Draft Standard Regulate Fares, Commissions, and Digital Payments?
- Base fares must be fixed transparently on the app in line with rates determined by the federal or provincial government, and are capped at a maximum of NPR 55 per km for four-wheelers and NPR 25 per km for two-wheelers.
- A minimum fare equivalent to 2 km applies regardless of how short the actual trip is.
- Providers may apply a surge/fluctuation of up to 20% above the base fare to account for night service, adverse weather, or waiting time.
- Where a provider retains only the app (without owning vehicles), it may retain a maximum 10% commission, with the balance going to the vehicle/driver. Where drivers are directly engaged, minimum wage under the Labour Act, 2074 (2017) applies, along with proportionate overtime.
- Applicable tax or revenue on income earned by the provider, vehicle owner and driver must be deducted at source and deposited by the service provider as required under prevailing law.
- Services cannot operate on routes not permitted by the federal or provincial government, except that passenger safety remains the provider's full responsibility in special circumstances requiring such use.
What Safety Rights and Grievance Mechanisms Are Available to Passengers and Drivers?
The draft standard places significant emphasis on personal safety and conduct:
- Service providers must operate a 24-hour emergency rescue and grievance-handling desk staffed by trained personnel and a Quick Response Team, with an obligation to notify traffic or Nepal Police as needed.
- Female passengers must, where possible, be given the option to select a female driver, reflecting gender-sensitivity and safety considerations.
- Zero-tolerance applies to abuse, harassment, assault, reckless driving, substance use, robbery, kidnapping or killing by either driver or passenger - with escalating consequences including warnings, service suspension, "digital blocking," fines and referral for criminal prosecution, and a right of appeal under Section 171 of the Vehicle and Transport Management Act.
- Providers must maintain grievance and disciplinary records on the app, subject to Department audit, and must not pressure drivers into excessive rides through bonus or incentive schemes.
- Drivers who are victims of passenger misconduct are entitled to protection, and providers must facilitate coordination with authorities and reasonable compensation for affected drivers.
- A maximum 12-hour daily login limit applies to drivers, with automatic app logout thereafter (subject to completing an in-progress trip); exceeding this is treated as a violation under Section 164 of the Vehicle and Transport Management Act.
What Mechanical and General Safety Standards Must Digital Mobility Service Vehicles Meet?
Chapter 4 prescribes minimum safety equipment for ride-hailing vehicles, including (for two-wheelers) grab handles/backrests, real-time GPS tracking, an SOS emergency button, standard helmets, reflective jackets for night service and mobile holders; and (for four-wheelers) tamper-alert dash-cams/CCTV, fire extinguishers, SOS buttons, real-time GPS, first-aid kits, seatbelts and central locking. Vehicles must pass mechanical inspection and pollution testing like other public vehicles, and electric vehicles must undergo annual battery-health and high-voltage isolation testing. Comprehensive insurance covering the driver, passenger and third parties is mandatory, and repeated safety violations can result in warning, one-month suspension, or one-year cancellation of affiliation.
What Are the App, Data Management, and Digital Service Requirements for Ride-Sharing Platforms?
Every service provider must operate its own app, hosted on a Nepal-based server, integrated with the Department's Central System via API, and offering a bilingual (Nepali/English) interface. Apps must meet extensive functional and security requirements -
- cybersecurity certification
- transparent fare and trip information
- real-time tracking
- trip-history access for at least 90 days
- secure data retention for a minimum of 18 months and clear disclosure of the fare split between provider
- driver and applicable tax deductions.
Passenger data cannot be shared with third parties without written consent, except where lawfully required by a government authority, and providers must submit six-monthly progress reports to the Department.
What Are the Social Security, Accident Fund, and Insurance Obligations Under the Draft Standard?
Chapter 6 introduces mandatory welfare protections:
- Service providers operating the app, vehicles and drivers must enrol all affiliated workers in the Social Security Fund, with a minimum monthly contribution basis of NPR 5,000, to be worked out between the provider, worker and the Fund.
- Providers must establish a dedicated Accident Fund, financed by a 1% deduction from every trip fare plus a 0.05% daily contribution from the provider's gross income, to cover accident insurance, treatment costs and support for dependents. Prescribed compensation includes NPR 10 lakh for death or total disability of both hands/legs, NPR 50,000–2 lakh for other disabilities (based on a compensation evaluation committee's recommendation), and up to NPR 1 lakh for treatment costs for injured drivers or passengers.
- Up to 50% of annual Accident Fund contributions may be distributed as an incentive among eligible workers who have been affiliated for at least 180 days.
What Are the Rules on Route Permits, Operating Restrictions, and Driver Identification?
Vehicles used for ride-hailing require route permits similar to public vehicles (with inter-provincial permits required for cross-provincial operation; two-wheelers are not eligible for inter-provincial permits). Two/three-wheelers are restricted to a maximum of 30 km per trip, while four-wheelers may operate anywhere the vehicle's route permit allows. Ride-hailing services may not be provided to unaccompanied children under 10 or to persons requiring assistance due to mental or health conditions (except via four-wheelers with an accompanying guardian). Drivers must carry and visibly display an identity card and wear a reflective uniform bearing the provider's name and logo while on duty. Passengers are entitled to rate each trip, and providers must deliver mandatory orientation training (minimum 3 days) to new drivers and periodic refresher training to underperforming or all drivers annually, per the curriculum outlined in Schedule-4.
What Responsibilities Do Ride-Sharing Platforms, Drivers, Passengers, and Government Authorities Have?
Chapter 7 allocates responsibility among the parties involved:
- Service providers bear responsibility for the safe and regular operation of the app, passenger safety, accident-risk mitigation and compensation.
- Drivers are primarily responsible for accidents, reckless driving or criminal conduct occurring during a trip, and must ensure injured persons receive prompt medical assistance.
- Passengers who abuse, harass or assault a driver, damage a vehicle, or misuse the app for unlawful purposes are liable to fines, platform bans or criminal prosecution, and bear responsibility for safety risks arising from refusing to use a seatbelt, helmet or safety instructions.
- Where a provider is shown to have repeatedly ignored complaints, failed to maintain safety systems, or engaged in gross negligence, it becomes liable for additional damages as determined under the standard.
What Penalties and Enforcement Actions Apply for Non-Compliance with the Draft Standard?
Violations of the draft standard attract penalties under the Vehicle and Transport Management Act, 2049, including under Section 160(3) for conduct not otherwise separately penalized. The Department retains authority to amend or revise the standard as needed to keep it current.
What Are the Practical Legal and Business Implications of the Digital Mobility Service Operation Standard, 2082 (Draft)?
For existing and prospective ride-sharing and ride-hailing operators, the draft standard represents a significant compliance undertaking: mandatory registration and Legal and Technical Compliance review, API integration with the Department's Central System, minimum vehicle and driver standards, fare caps and commission limits, mandatory insurance and Social Security Fund/Accident Fund contributions, and detailed app, data-security and reporting obligations. Structuring commercial arrangements with vehicle owners and drivers (as employment, partnership, or independent contractor relationships) will need to be carefully reviewed against the standard's labour-law cross-references and the fare/commission-sharing rules.
For vehicle owners, investors and drivers, the standard clarifies entitlements - including minimum wage protection, commission caps, mandatory insurance, and a dedicated Accident Fund - while also imposing new obligations such as social security enrolment, mandatory training and route/hour restrictions.
Because the document remains a draft awaiting final approval, affected businesses have a window to review the proposed obligations, assess operational readiness, and, where appropriate, engage in the consultation process before the standard is finalized and formally notified.
How Sherpa Law Associates Can Assist
Given the scope of obligations under the draft standard, our firm can assist digital mobility platforms, vehicle owners, investors and drivers with:
- Licensing and registration: Preparing and filing applications for operating permission with the Department of Transport Management, including drafting the required corporate documents, policies (data privacy, grievance handling, tariff structuring) and supporting schedules.
- Corporate and commercial structuring: Advising on the appropriate legal structure for engaging vehicle owners and drivers - direct employment, commission-based affiliation, or tripartite arrangements - and drafting related agreements in compliance with the Labour Act, 2074 and the draft standard's fare-sharing rules.
- Regulatory compliance advisory: Ongoing compliance support on fare-cap rules, QR-code and vehicle-identification requirements, data localization and cybersecurity obligations, and reporting duties to the Department.
- Labour and social security compliance: Advising on Social Security Fund enrolment, minimum wage compliance, driver training obligations, and structuring of the mandatory Accident Fund.
- Insurance and risk management: Assisting with procurement of comprehensive insurance policies covering drivers, passengers and third parties, and advising on compensation and claims processes under the Accident Fund.
- Dispute resolution and enforcement: Representation in grievance proceedings, appeals under Section 171 of the Vehicle and Transport Management Act, and disputes involving passengers, drivers or the Department.
Regulatory engagement: Supporting clients in submitting feedback or participating in consultation on the draft standard prior to its finalisation.
Contact Us for Help
If you operate, invest in, or are planning to launch a ride-sharing or ride-hailing platform in Nepal, or need advice on compliance with the Digital Mobility Service Operation Standard, our team at Sherpa Law Associates is happy to assist.
- Address: Babarmahal, Kathmandu, Nepal
- Phone: +977 9846000030
- Email: sherpalaw.nepal@gmail.com
- Schedule a consultation
This article is based on the draft Digital Mobility Service Operation Standard, 2082, published by the Ministry of Physical Infrastructure and Transport, and is for general informational purposes only. As the standard remains in draft form, provisions may change before final approval. This article does not constitute legal advice - for advice specific to your situation, please consult our team directly.
