Gyaan 🧞‍♂️

How Legal Self-Drive Businesses Operate (Case Study, India)

How do legal self-drive rental platforms in India operate? SpotGenie explores the Rent-a-Cab law, case studies (Zoomcar, Revv), RTO enforcement, and the systems that keep legal rentals running safely and compliantly.

Pratik Kamble

06 Oct 2025 — 3 min read

How Legal Self-Drive Businesses Operate

SpotGenie Gyaan: How Legal Self-Drive Businesses Operate (Case Study, India 2025)

1. Why this matters

India’s cities are seeing a rapid rise in self-drive car rentals, from weekend travellers to students and business professionals. But as popularity grows, so does confusion. Why are some cars seized while others run freely? What exactly makes a self-drive company “legal”? SpotGenie dives into how compliant self-drive businesses actually operate, and what you should know before renting or listing a car.

2. Legal foundation: The Rent-a-Cab Scheme, 1989

The backbone of India’s self-drive rental legality is the Rent-a-Cab Scheme, 1989, enacted under the Motor Vehicles Act, 1988. It sets the operational framework for anyone renting out motor cabs to customers who wish to drive themselves.

Operators must hold a valid licence under the Scheme.
They usually need a minimum fleet (often 50 vehicles) to qualify.
Vehicles require valid commercial registration, tourist permits (Section 88 of the Act), fitness and insurance certificates, and compliance with emission norms.
States can introduce additional conditions, e.g., Jaipur’s 2025 policy now mandates that every self-drive operator must hold a valid Rent-a-Cab licence, maintain a 24×7 helpline and update vehicle data digitally.

3. Case Study 1: Zoomcar, compliance through technology

Zoomcar pioneered India’s organised self-drive market and remains a benchmark for compliance and innovation.

Host eligibility & vehicle standards: Vehicles must be under 7 years old, registered under the Motor Vehicles Act, insured, and equipped with GPS tracking.
Inspections & safety: In 2025, Zoomcar partnered with CARS24 for AI-assisted inspections and real-time condition monitoring to raise safety standards.
Insurance & user verification: All rentals include verified driver IDs, refundable security deposits, and clearly defined accident and damage coverage.
Digital compliance: Platform software tracks trip mileage, fuel logs, and real-time location to prevent misuse or unauthorised sharing.

4. Case Study 2: Revv, hybrid compliance model

Revv, another key operator, uses a hybrid approach: corporate-owned and host-partnered vehicles. Revv maintains a centralised licence under the Rent-a-Cab Scheme and ensures vehicles are commercially registered, periodically serviced, and insured under corporate fleet insurance.

Its focus on home-delivery model and short-term subscriptions also helps it remain compliant with fleet management norms, vehicles are technically part of Revv’s licensed pool even when used by individuals.

5. When the line is crossed, illegal operations & enforcement

Authorities are tightening checks on illegal or “white-plate” self-drive rentals (private cars rented out commercially).

In Bengaluru (2025), RTOs impounded 21 private vehicles used for self-drive rentals without valid commercial permits.
In Delhi (2023), the Transport Department cancelled Zoomcar’s local licence for operating private vehicles under commercial use.
Many state RTOs (Goa, Kerala, Rajasthan) are now cross-checking permit numbers digitally to identify illegal operators.

Renting or driving such vehicles can lead to seizure, insurance denial in case of an accident, and even legal action against both the renter and the owner.

6. What makes a self-drive business truly legal

Valid Rent-a-Cab licence issued by the State Transport Authority.
All vehicles registered as “commercial” (yellow or black-on-white plates authorised for self-drive).
Comprehensive insurance and regular fitness checks.
Auditable customer KYC, trip records, and GPS logs.
Transparent rental contracts with damage, cancellation and liability clauses.
Data-sharing arrangement with local RTOs for compliance verification.

7. Conclusion

Legal self-drive businesses in India balance flexibility with responsibility. When operators follow the Rent-a-Cab Scheme, maintain compliant fleets, and leverage tech for transparency, they help redefine mobility. For users, the rule is simple: rent only from licensed operators, check plate colour and permits, and always verify insurance. For platforms, compliance isn’t paperwork, it’s the foundation of trust.