Nepal ride-hailing law fails to take off despite court orders

Despite clear directives from the Patan High Court in 2020 and a reiteration from the Supreme Court last year, Nepal's ride-hailing sector continues to operate in a legal gray area. The much-anticipated regulatory framework, crucial for governing this increasingly vital mode of transport in the Kathmandu valley and beyond, has once again been postponed. Officials in the Bagmati Province, which is leading the drafting efforts, attribute the delays to ongoing political transitions and the decision to integrate ride-hailing regulations with broader amendments to the Motor Vehicles and Transport Management Act, 1992.

This isn't the first hurdle. Gandaki Province had briefly introduced ride-sharing regulations early last year, only to withdraw them months later following significant pushback from traditional public transport operators. These initial rules had imposed limitations on trip distances for both two-wheeler and four-wheeler services, and their withdrawal highlights the complex stakeholder dynamics at play. The current government's policy focus on promoting electric vehicles within the amended Act means that ride-hailing provisions will be introduced alongside measures for transitioning petrol and diesel vehicles, a process that inevitably takes time.

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As the government’s policy is to promote electric vehicles in the amended Act, we plan to introduce ride-hailing provisions alongside measures to transition petrol and diesel vehicles to EVs, including tax policies and other incentives.

From a Nepali perspective, this regulatory lag is frustrating but perhaps not entirely surprising given the country's political landscape and the challenges of implementing new policies. While ride-hailing platforms have rapidly expanded, becoming a significant source of employment within the gig economy with over 200,000 riders engaged, the lack of clear legal oversight creates persistent problems. These range from unpredictable pricing to safety concerns for both riders and passengers. The Supreme Court's recognition of ride-hailing as a legitimate service and the government's amendment to the Industrial Enterprises Act in 2023 acknowledging ride-sharing platforms as legal entities underscore the sector's importance. However, without concrete regulations, its full potential and the safety of its users remain compromised. This situation is uniquely Nepali, reflecting a broader pattern where rapid technological adoption outpaces legislative action, leaving a vital sector vulnerable.

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The draft of the ride-hailing working procedure has already been prepared and is under discussion among the relevant ministries.