LAHORE – For online taxi drivers in Punjab, every trip could soon come with more than just traffic and already soaring fuel costs as new government route permit policy is set to add fresh paperwork, recurring fees and operational hurdles, raising fears that the burden will not stop drivers but could eventually reach passengers.
In new update for app-based rides, the provincial government’s new permit regime threatens to drive thousands of ride-hailing captains off the road, increase operating costs and make cross-district travel far more complicated. Under amendments to Motor Vehicles Ordinance, 1965, Punjab government has made route permits mandatory under Section 44B for drivers working with digital ride-hailing platforms, including InDrive, Uber and Yango.
As the move aimed at bringing app-based transport under a formal regulatory framework, industry stakeholders warn it could fundamentally change how ride-hailing operates across the province.
The biggest flashpoint is the district-wise permit requirement. Punjab’s 36 districts will each be treated as separate transport jurisdictions, meaning drivers must obtain valid permits for every district in which they intend to operate. For thousands of captains who regularly transport passengers between neighbouring districts, a single permit will no longer be enough.
Drivers also working on multiple ride-hailing apps will face another layer of compliance, as separate permits will be required for each platform. Since every permit must be renewed annually, drivers could face recurring expenses alongside mounting paperwork at a time when inflation, fuel prices and vehicle maintenance costs continue to squeeze incomes.
Industry representatives say the regulations risk turning a flexible gig-economy job into an administrative burden. Many captains are expected to get permits only for their primary operating districts instead of paying for multiple licences. If that happens, transport experts believe Punjab’s active ride-hailing fleet could shrink by an estimated 20 to 40 percent, reducing vehicle availability and making rides harder to secure, particularly during peak hours.
The changes could also reshape driver behaviour. Rather than risking penalties for operating outside permitted jurisdictions, many drivers may begin rejecting inter-city and cross-district bookings altogether. Journeys that were once routine, such as Lahore to Kasur or other neighbouring districts, could become increasingly difficult to book, leading to more cancellations and longer waiting times.
Passengers are also expected to bear the financial burden. Those familiar with the information said higher compliance costs will ultimately be passed on through increased fares, platform fees or more frequent surge pricing, making app-based transport more expensive for consumers already coping with rising living costs.
InDrive representative said many captains depend on ride-hailing as a part-time source of income to supplement household earnings. The company warned that requiring separate district permits could discourage a large number of these drivers from remaining active, reducing vehicle availability and limiting mobility across Punjab.
The administrative process itself has also raised concerns. Drivers may have to visit Regional Transport Authority (RTA) offices in multiple districts to obtain or renew permits, reducing valuable working hours and further increasing compliance costs.
Ride-hailing companies are expected to face operational challenges as well. A smaller driver pool could reduce trip volumes, while platforms may be forced to introduce new incentives or revise commission structures to retain active captains. Companies that rely heavily on flexible, part-time drivers are expected to face the greatest disruption.
As the move will improve government oversight of digital transport services, improve accountability, enhance vehicle and driver verification, and generate additional revenue through permit fees. Critics say the regulations risk over-regulating Punjab’s rapidly growing gig economy by increasing the cost of mobility, discouraging flexible work and fragmenting a transport system that naturally operates across district boundaries.
Transport experts and ride-hailing companies have urged the Punjab government to replace the district-wise licensing model with a single province-wide permit linked to drivers’ platform registrations. They argue such a system would allow effective regulation without forcing drivers to obtain multiple licences or restricting movement across Punjab.
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