Renting a car or providing a car that is privately registered is not allowed in India as per the Motor Vehicles Act section 76 . The cars on rent – any form should be commercially registered.
The Goverment of India is also planning to bring laws for all cab aggregators and have separate permits for Radio Cabs, Contracted Vehicles, Self-Drive Rentals and Tourist Vehicles.
India has strict laws and commercially registered cars have to follow strict state laws to ply on the road. The car owner needs to obtain a national permit to ply in India and pay state taxes annually. The commercial cars come with comprehensive insurance which covers the passengers / drivers and third party damages. The commercial cars needs to go through an annual fitness check to ensure the safety of the passengers. Beside the passenger safety, since the number of commercially registered vehicles are increasing in India the emission norms are also getting strict. In areas of high density of the cars commercial vehicles meeting BSIV norms can only be registered.
Even self-drive cars on rent are required to be registered commercially and get permits / taxes as per the law. The Government is doing is bit by regulating the car rental market. The regulations controls unwanted pollution and ensures safety of the people who are using these rented cars.
To start renting self-drive cars the company needs to also obtain a license from the state authorities. After the successful award of the license the organisation will be able to get the cars registered under the self drive scheme.
Reference: section 76 of motor vehical act 1988