Pathao, a popular ride-hailing service provider in Kathmandu, has announced expansion of its service to 17 more cities in Nepal.

Officially launched on September 24, 2018, in Kathmandu, the fastest-growing tech startup, said the service currently limited to Kathmandu Valley and Chitwan, will soon serve the additional cities as part of the company's nationwide expansion policy.

Asheem Man Singh Basnyat, managing director of Pathao Nepal, said they have announced extending the service to nine cities in Koshi province—Biratnagar, Damak, Urlabari, Biratchowk, Itahari, Inaruwa, Dharan, Birtamod, and Bhadrapur.

It has announced the expansion in three cities in Lumbini province—Butwal, Nepalgunj and Bhairahawa, and two cities in Madhesh province—Birgunj and Janakpur.

Similarly, it has announced its services in Dhangadhi of Sudurpaschim province, Hetauda in Bagmati province and Pokhara in Gandaki province.

“Future expansions to other cities are also in the pipeline. We aim to facilitate inter-city travel through the expansion of Pathao's services," Basnyat said.

According to the company, it has initiated the bike rider registration process in all target cities.

Currently, over 200,000 people are engaged with Pathao's array of services, including more than 190,000 bike riders, over 10,000 captains (taxi drivers), and an additional 5,000 registered for food delivery.

The company said it has the highest insurance coverage in Nepal, providing up to Rs1 million for death or dismemberment due to an accident, and up to Rs100,000 for medical treatment.

In February, the ride-sharing service was listed as a service-oriented industry under the Industrial Enterprises Act 2020.

The government amended the Act to include ride-sharing as a service-oriented industry and was published in the Nepal Gazette on February 1. This gave ride-sharing companies legal status, seven years after they started services in Nepal.

With the amendment to the Act, the Bagmati Province government has said it is in the final stages of introducing a legal framework for app-based ride-sharing services.

The draft ride-sharing guidelines have proposed vehicle registration. Ride-sharing drivers have to register their cars and motorbikes just like traditional taxis and have to operate under the regulations of the Ministry of Transport.

The companies have to renew their operations annually at the transport management offices.

The guidelines also regulate the fare. The guidelines have proposed mandatory insurance for passengers.

When ride-sharing—or ride-hailing—apps emerged in 2017, it spurred a veritable revolution in mobility.

Riders could book, follow and pay for their rides straight from their phones and at their doors to quickly navigate clogged streets.

The online app-based ride-sharing brought a drastic change in transportation, especially for the people in the Kathmandu Valley. Ride-sharing motorbike taxi services employ thousands in Nepal, especially young people.

In January 2019, the government cracked down on ride-hailing platforms like Tootle and Pathao, but public pressure forced it to back down as the ride-hailing apps had changed the way Nepalis travelled.

Subsequently, in February 2020, the Patan High Court ordered the government to regulate ride-hailing services.

Bagmati province declared ride-hailing services legal in June 2022, but it did not issue any guidelines or policy. Ride-hailing companies were permitted to operate mobile apps by registering with the Transport Department.

The Motor Vehicles and Transport Management Act 1993 has mentioned that vehicles registered for private use should not be used for public transportation.

The law also bars vehicle owners from using their vehicles for other than declared purposes.

Balram Niraula, secretary at the Bagmati Province Ministry of Labour, Employment and Transport, said that the Industrial Enterprises Act has given legal status to the ride-sharing companies and accordingly they have been preparing the guidelines to regulate them, including the regulation of the fare and registration.

The draft of the proposed ride-sharing guidelines is still in the consultation phase, he said.

“We will send the draft to the Economic Affairs and Planning and Law ministries for their approval,” Niraula said. “Once the ministries approve the draft, it will be tabled in the provincial cabinet.”

He said that since it’s in a process, they cannot say with certainty when the guidelines will take shape and be implemented. “But, we are doing our best to complete it.”

The first Nepali ride-sharing app was launched in 2017.