Gandaki becomes Nepal’s first to regulate Pathao and InDrive. Here’s how the new law impacts drivers, riders, and office registration requirements.

Article summary: 

• Gandaki makes history as Nepal’s first province to regulate Pathao and InDrive, setting bold rules for drivers, platforms, and provincial oversight.
• From mandatory insurance, app audits, and SSF enrollment to 20km ride caps and platform taxes, we break down what the new law demands and what it forgets.
• But with private vehicles now legally allowed to operate like taxis, could this law resolve the ride-sharing chaos, or spark a new wave of conflict?

Chances are, you’ve booked a ride on Pathao or InDrive at some point. Maybe it was after a long day, maybe the sun was blazing, or maybe, let’s be honest, you just didn’t feel like haggling with a taxi driver.

A few taps, a bike or car shows up. You hop in. Zoom. Done. 

But here’s the twist: until recently, all of this existed in legal limbo.

No formal rules. No clear permissions. No real oversight. It wasn’t exactly legal, or illegal. It just was.

Well, not anymore.

On May 14, 2025, Gandaki Province made history as the first in Nepal to officially regulate ride-sharing platforms like Pathao and InDrive. This could be a game-changer, not just for drivers and riders in Pokhara, but for every app user, entrepreneur, and policymaker across Nepal.

And if the idea of reading a 26-section government guideline sounds painful, don’t worry.

We’ve broken it all down: plain-language, no jargon, and no boredom guaranteed.

Ride-Sharing in Nepal Has Been a Bit of a Legal Mess

Let’s rewind a bit.

You might be surprised to hear this, but when Pathao launched in Nepal around 2018, it wasn't officially recognized as a transport service. In fact, according to the Motor Vehicles and Transport Management Act 1993, you weren’t even allowed to use a private vehicle for commercial purposes. So technically, when a bike gave you a ride for money, it was breaking the law.

But ride-sharing boomed anyway.

People loved the convenience. Drivers saw it as a way to earn quick money. Apps like Pathao and InDrive opened offices, hired teams, ran ads, and scaled up.
→ Searches like "Pathao office Kathmandu" or "InDrive office Pokhara" even became super common.

And while all this was happening, the government kind of just watched.

• In 2019, someone even went to the Supreme Court trying to get Pathao banned. Didn’t work.
• In 2020, the Patan High Court told the government: “Please regulate this sector.”
• In 2023, the Industrial Enterprises Act was updated to include ride-sharing as a legit business.
• But still, no real rules.

Until the Auditor General’s report dropped a bomb: 

Ride-sharing is using private vehicles illegally, avoiding tax, and operating in a grey zone.

That’s when things got serious.

Then in January 2024, the Supreme Court literally told the government:
“Stop wasting time. Make rules.”

And that’s when Gandaki Province stepped up.

While the federal government kept delaying, Gandaki’s team just went ahead and made their own regulations, the “Gankdaki Province Ride Sharing Regulations, 2082” and passed it. Just like that, they became the first province in Nepal to officially regulate ride-sharing.

In fact, it’s so solid that Bagmati Province is now copying Gandaki’s model and drafting their own.

Coming up next, we’ll explain:

• What the rules say
• What this means if you're a driver, a rider, or thinking of starting your own ride-sharing company
• And what the Pathao and InDrive teams should probably do next

So, What Do the New Rules Actually Say?

Alright, buckle up because Gandaki Province’s Ride-Sharing Guidelines 2082 are now the law of the land (at least in Gandaki). And yes, they’re detailed (like, 26 sections + multiple schedules kind of detailed.)

But don’t worry. We’re breaking down everything you shouldn’t miss.

1. First things first: You need a license

If you want to start a ride-sharing or self-drive rental service, you must register with the Transport Management Office.

This means:

• You can’t just build an app and start operating.
• You can’t just run a few vehicles without permission.
• And no, being a tech company doesn’t magically make you exempt.

You need:

• A company registration
• PAN/VAT certificate
• Tax clearance
• Details of vehicles and drivers
• A working app (with certain features; more on that soon)

Also, you must have at least 20 vehicles for ride-sharing, or 5 vehicles for self-drive rental. No one-vehicle hustles anymore.

2. What if you don’t follow the rules?

There’s no “oh sorry I didn’t know” anymore. The law is clear:

• First offense = Rs. 1,00,000 fine
• Second offense = double the fine
• And yes, they can shut you down completely.

Translation: If Pathao or InDrive doesn’t register properly in Gandaki, they’re toast.
(And if you’re thinking “Maybe they already did?” good question. Try Googling "InDrive office Pokhara" or "Pathao registration in Gandaki" and see what pops up.)

3. What kind of vehicles can be used?

Not just any bike or car. There are strict rules:

For two-wheelers:

• Min engine size = 95 cc (if petrol)
• Min power = 1.5 kW (if electric)
• Max age = 10 years (15 if electric)

For four-wheelers:

• Min engine size = 790 cc (unless it’s a registered taxi)
• Min power = 20 kW (if electric)
• Max age = 15 years (20 if electric)

Also:

• The vehicle must be registered in Gandaki Province
• Must have fitness certificate issues by the transportation management office, tax paid, and insurance done right.

No, you can’t bring a random scooter from Kathmandu and start giving rides in Pokhara.

4. Your app needs to be legit

If you’re a ride-sharing company, your app can’t be some sketchy APK built in a week. The law says it must have:

• Nepali + English interface
• Security certification + VAPT & IT audit
• Must show driver photo, trip distance, estimated fare before ride
• Allow live location sharing during the trip
• Let passengers rate the trip and give feedback
• Allow users to see past 90 days of ride history
• Store data securely in Nepal for at least 6 months
• Include emergency alert to notify trusted contact, police, and provider

Basically: No shortcuts. This is no longer a garage startup. It’s serious business now.

5. And the drivers?

Drivers can’t just log in and start giving rides. Here’s what the rules say:

• Must be at least 18 years old
• Must have had a license for at least one year
• Must not work more than 12 hours a day
• Must wear an ID card provided by the service company
• Must go through 2-day orientation training
• And if their rating drops below 50%, they have to do a refresher training

Also:

• Two-wheelers can’t carry passengers under 10 years or over 80
• Speed limit = 40 km/h in urban areas

Oh, and you can only drive for one platform at a time. So no more Pathao + InDrive side-by-side hustle.

6. What about money stuff?

Yes, the government wants its cut. Here's how the money flows:

• Ride-sharing companies can charge up to 12% service fee from drivers (think of it as commission on the rider's earnings)
• But they must also pay 1% of every transaction to the Provincial Government
• Annual renewal fee per vehicle (payable by the company) is:
  • Rs. 5,000 per two-wheeler
  • Rs. 20,000 per four-wheeler

Vehicle owners (i.e., the riders) pay a one-time joining fee:

• Rs. 500 for two-wheelers
• Rs. 2,000 for four-wheelers

Companies also have to:

• Pay VAT + income tax
• Get proper insurance (vehicle, passenger, and third-party)
• Enroll drivers in the Social Security Fund

And yes, fares must be equal to or less than regular taxis. So you can’t overcharge just because you’ve got an AC.

This might sound like a lot, and it is. But it’s Nepal’s first real attempt to make ride-sharing official, safe, and tax-paying.

Why Are Transport Unions So Angry?

If you’re thinking “These new ride-sharing rules make sense. What’s the big deal?”

Well, not everyone agrees. Especially the traditional transport unions. They’re not just annoyed. They’re furious. And they're not hiding it.

Let’s talk about why.

The “It’s Illegal!” Argument

One of the main reasons unions are up in arms is something buried in a law from 2049 B.S. , the Motor Vehicles and Transport Management Act

According to Section 8(2) of the Motor Vehicles and Transport Management Act:

“No private motor vehicle shall be used for the transport service.”

This means if your vehicle is registered as “private” (which most Pathao or InDrive bikes are), you’re not supposed to use it to earn money by giving people rides.

Yup, technically, when you hop on a bike using Pathao or InDrive, that rider is breaking the law. Or was.

Because back in 2049, there were no apps. No GPS. No smartphones. No gig economy. The idea of tapping your phone to summon a stranger’s scooter was science fiction.

But times changed. And so did the way we move.

In 2023, the government updated the Industrial Enterprises Act and finally recognized ride-hailing as a legit business in the “service-based” catagory. That was a big step, but it didn’t fix everything.

We now have two laws pulling in opposite directions:
One says ride-sharing is legal.
The other says using private vehicles for rides is illegal.

Gandaki’s solution? They said, “Let’s cut through the confusion. We’ll allow private vehicles for ride-sharing, but only if they register under our new rules.” 

That’s how the new guideline was born.

It’s their way of saying: let’s update the system to reflect today’s reality.

Why Are Transport Groups Losing It?

From the unions’ side, the frustration runs deep.

They’ve followed all the rules; paid route permit fees, gone through the public vehicle registration process, dealt with government inspections, and more.

Now suddenly, someone with a private bike and an app gets to compete with them?

To them, that’s not innovation. That’s an unfair shortcut.

So they’ve started pushing back, hard.
Some have demanded the guideline be scrapped. Others have threatened strikes. There’s real tension brewing between the old transport order and this new app-based economy.

So, Who’s Actually Right?

Legally speaking, it’s complicated. But here’s what’s clear:

The old law (from 1993) does say private vehicles shouldn’t be used commercially. But Nepal’s constitution gives provinces the power to make their own rules about local transport and service delivery. And the federal government? It’s been stalling for years.

In fact, the Supreme Court recently told the government to stop delaying and make proper rules for ride-sharing. So when Gandaki Province stepped up and said “We’ll do it ourselves,” they were actually acting within their rights.

That’s why Bagmati Province is following suit. They’re drafting their own version, and it might go even further than Gandaki’s. There’s talk of giving the government real-time access to ride data, including pick-up and drop-off locations, fare amounts, and more.

Which means your next Pathao ride? The Bagmati Transport Office might be watching it unfold live.

Implications For Companies Like Pathao and InDrive: A Legal Turning Point

Let’s talk about what's now required of these companies:

They must formally register with the provincial Transport Management Office, which means they need to:

• Submit a company registration certificate, PAN/VAT number, tax clearance, and documents for each affiliated driver and vehicle.
• Operate through an app that’s hosted on a server within Nepal and has passed a Vulnerability Assessment & Penetration Test (VAPT).
• Include features like live trip tracking, emergency alerts, fare transparency, feedback systems, and access to ride history.
• Ensure that all riders are insured, and that the company pays a 1% ride tax to the provincial government.

Furthermore, they must also pay a registration and renewal fee per vehicle:

This is a dramatic shift. Until now, these companies mostly operated through a mix of legal grey areas, policy gaps, and goodwill.

But Gandaki’s regulation sets a precedent: You want to operate here? You play by the book.

What Happens If They Don’t Comply?

Simple: the law has teeth.

Operating without a license? That’s an immediate Rs. 1,00,000 fine, and it doubles with each violation.

And it’s not just about money. The province has the power to ban non-compliant apps entirely.

So companies like Pathao and InDrive, no matter how popular or well-funded, can’t afford to ignore this.

For the Riders Behind the Wheel: Welcome to the Compliance Era

For the 20-something Pathao rider or the part-time InDrive driver who thought of this as easy side income, the game has changed too.

Under the new rules, you can’t just download an app and start giving rides. Now you must:

• Be officially affiliated with a registered ride-sharing company.
• Carry an ID card issued by the platform.
• Attend a 2-day mandatory orientation training.
• Have held a driver’s license for at least one year.
• Operate only a vehicle that meets strict eligibility criteria (engine size, age, registration location).
• Work no more than 12 hours per day, with apps required to auto-log you out after that limit.

And there's more.

If you try to use an unregistered bike or drive for multiple platforms at once, you can be fined or removed from the system entirely.

In short? Drivers now need to act more like licensed professionals, not just gig workers.

What Do These New Rules Mean for Us, the Users?

Let’s walk through what changes for us:

1. Safety is no longer optional

Let’s give credit where it’s due.
Platforms like Pathao and InDrive already offer some safety features like live trip tracking, emergency buttons, and ride history are standard for most users.

But until now, these were just that. Features.
Nice to have. Not always enforced. Sometimes overlooked.

Under Gandaki’s regulation? They’re mandatory.

Every ride-sharing app operating in the province must now include:

• Live GPS tracking that can be shared with your trusted contacts
• A visible emergency alert button during your ride
• A complete 90-day ride history in your app, not just pickup and drop, but also vehicle and driver info
• Verified driver details, photo, and contact options before the ride even begins

This is no longer about what apps choose to offer.
This is what they’re required by law to deliver for your peace of mind.

2. Insurance coverage

Here’s the real game-changer.

Previously, if you were injured during a ride, your fate depended on the app’s terms and whether they chose to take responsibility.

Now, the new regulation requires every registered vehicle to carry passenger insurance. Not just for the driver, but for you as a rider.

So whether it’s a minor collision or something more serious, you’re no longer left hoping the app responds.
You’re legally covered.

It’s not just a feature anymore.
It’s a right.

3. 24/7 customer support

Ever tried reporting a problem after a bad ride, and wondered if anyone would even read your message?

Those days are over.

Every registered ride-sharing company must now run a 24/7 support and complaint-handling center with a phone line, email, and in-app complaint system.

And there’s a deadline:
If you report an issue, the company must respond and resolve it within 3 working days. No ghosting. No copy-paste replies. Real accountability.

Whether it’s about driver behavior, overcharging, or a safety issue, there’s finally a system in place that’s built to protect riders.

4. Transparent fares

Under the new rules, your app must show you:

• The estimated fare
• The trip distance
• And the vehicle and driver details

before your ride even starts.

This means no more confusion, no last-minute “extra” charges just because it’s raining and demand is high.

This is transparency, backed by law.

5. More reliable service

Since only registered and trained drivers can operate legally, you’ll start to notice fewer fake accounts, less unprofessional behavior, and more consistent service.

What’s Still Missing, And What Doesn’t Quite Add Up

Let’s get one thing straight.

Gandaki’s ride-sharing regulation is a step in the right direction. It’s detailed, it’s bold, and it’s the first real attempt to bring ride-hailing under the rule of law in Nepal.

But that doesn’t mean it’s flawless.

Scratch the surface, and you’ll find a few provisions that frankly make you go, “Wait, what?”

Let’s talk about what’s missing, what’s unclear, and what’s just plain inconsistent.

1. The 95cc engine limit: is this 2025 or 1995?

Regulation 10(1)(a) says that petrol-powered two-wheelers used for ride-sharing must have an engine capacity “up to 95cc.”

On paper, this sounds precise. But in practice? It makes almost no sense.

Let’s be real: there are virtually no petrol bikes under 95cc in Nepal’s current market. Even the humble Hero Splendor, widely seen as Nepal’s most basic commuter bike, clocks in at 100cc. Most scooters fall in the 100–125cc range. Below 95cc? That's practically extinct.

It’s definitely a drafting error. Surely someone meant to set a minimum standard to avoid unsafe, underpowered vehicles. But as it stands, the rule technically disqualifies almost every existing bike used by ride-sharing riders in Nepal.

And that’s a problem. Not of enforcement, but of clarity.

2. The 20-kilometer cap

Under Regulation 12(1), two-wheelers can’t offer rides beyond 20 kilometers. The app is even required to block such bookings.

Sounds fine on paper, until you actually try to go somewhere.

Let’s say you’re chilling in Majhikuna, enjoying the view. You want to head to Pumdikot to catch the sunset. It’s a bit out of the way, and you don’t have time to hop through two buses and walk the rest.

So you try to book a Pathao or InDrive.

And guess what?

You can’t. Because Majhikuna to Pumdikot is about 27 km.

A service designed for convenience just turned inconvenient. Not because of traffic, not because of rider availability, but because the rulebook says 20 km is the magic limit.

And that limit? It’s not based on road conditions, safety data, or fuel efficiency. it’s just there.

3. SSF enrollment: Gig workers or employees?

Let’s talk about Regulation 18(3), the rule that says all ride-sharing drivers must be enrolled in the Social Security Fund (SSF), and that the responsibility lies with the service provider.

Now, on the surface, this sounds great. Social protection for gig workers? We love that.

But here’s the big question:

What kind of SSF enrollment are we talking about?

Because if Pathao, InDrive, or any other company is directly enrolling drivers into SSF, doesn’t that imply an employer-employee relationship?

That would come with a whole new list of obligations:

• Base salary or minimum wage
• Paid leave and rest periods
• Contributions calculated from monthly income
• Termination and labor law compliance

But we all know ride-sharing apps don’t hire riders as full-time employees. These riders work flexibly, often part-time, and are considered independent partners.

So here’s what’s probably intended (but never clearly stated):

Riders must enroll in SSF as self-employed individuals, and the platform is simply responsible for facilitating the process, perhaps during onboarding or via system reminders.

If that’s true, great. But it needs to be written clearly, because the current language is vague enough to spark lawsuits, compliance confusion, and operational roadblocks.

This is too important to leave ambiguous, especially when you’re dealing with people’s livelihoods and future benefits.

4. Too many requirements, too little flexibility

The regulation requires:

• A minimum of 20 vehicles to even start a ride-sharing company
• Vehicle registration must be from Gandaki Province
• Service providers must build their own mobile app with Nepali + English, GPS tracking, emergency response, ride logs, and real-time alerts

That’s a lot. Especially for local startups trying to build lean.

What if a new company wants to partner with a third-party app provider or use an existing open-source ride-share backend?

What about vehicles owned in Kathmandu but used in Pokhara by riders who live and work there?

A few exceptions, or at least flexible licensing models, could go a long way in encouraging innovation outside Kathmandu.

5. Will This Law Reignite the Taxi vs. Ride-Sharing War?

Section 2(8) of the regulation defines a ride-sharing vehicle as any private or public two- or four-wheeler permitted by the Transport Office.

In plain terms?
It legally allows private vehicles with red number plates to operate on ride-sharing apps like Pathao and InDrive.

That may sound progressive, but it’s also a ticking time bomb.

Traditional taxi drivers spent lakhs registering as public vehicles. They followed stricter rules. 

Now, with the law officially welcoming private vehicles onto these platforms without offering any protections to taxis, that old traditional taxi vs pathao tension could boil over again.

The regulation doesn’t say how taxis and private four-wheelers will be treated differently. No mention of price rules. No distinction in licensing.

And unless that’s addressed, this law might not just regulate ride-sharing,

It might restart a full-blown turf war.

Final Thoughts

When Gandaki Province rolled out its ride-sharing regulation, it didn’t just pass a policy, it lit a fire.

After years of legal grey zones and regulatory silence, someone finally stood up and said:

“We’ll take responsibility. We’ll draw the line. We’ll make it official.”

And for that, Gandaki deserves real credit.

It became the first province in Nepal to give ride-sharing a legal identity, telling drivers, riders, and platforms:

“You belong in the system.”

It gave provinces like Bagmati a playbook. It gave ride-sharing legitimacy.
But here’s the thing about first steps: they’re rarely perfect.

For all its ambition, this regulation leaves behind a trail of confusing rules, technical flaws, and unanswered questions.
Why cap rides at 20 kilometers in a city as spread out as Pokhara?

And what about data privacy? Where are the safeguards?
Where’s the flexibility for smaller startups that can’t afford to build their own full-stack apps?

And now, with the law openly allowing private vehicles to operate like taxis, without protections for existing taxi operators, have we just reignited the very conflict that’s haunted this sector for years?

This isn’t just about patching loopholes. It’s about making sure regulation serves the people, not the other way around.

Yes, we need rules. But those rules must be:

• Grounded in real-world data
• Aligned with digital realities
• And built to empower both innovation and accountability

Because the future of mobility in Nepal isn’t about which app has better features, or which province acts fastest.

It’s about building a system that:

• Works for the young rider trying to earn a living
• Protects the passenger just trying to get home safely
• Supports the startup trying to innovate responsibly
• And respects the taxi driver who played by the rules from day one

Gandaki took the bold first step.

Now, the challenge isn’t to copy it

It’s to refine it, learn from it, and build something smarter, fairer, and future-ready.

Nepal’s ride-sharing revolution finally has a law.
Let’s make sure it doesn’t stall at the first red light.

Additional Resources:

• How to Earn Money Online in Nepal with Khatapana in 2025 
• Tax Rate in Nepal: A Comprehensive Guide to Tax Slabs, Deductions, and Tax Calculator Tools 
• How to Check IPO Results in Mero Share: A Complete Step-by-Step Guide
• Salary and Tax Calculator in Nepal: Simplifying Your Financial Planning