Because officially, as I mentioned, private (white plate) cars are NOT legally allowed for rentals in India.
But in the real world, you’ll still see them being offered. Let’s break down how it happens in practice:
🚗 How Private Cars Are “Rented” in India (Real-World Practices)
1. Aggregator-Led “Host” Models (Grey Zone)
- Platforms like Zoomcar (Host Program), Revv (earlier model), and Drivezy (when active) allow private owners to list their cars.
- The trick:
- The owner signs a lease agreement with the aggregator.
- Technically, the car is considered to be leased to the company, not directly to end users.
- The company then covers the insurance under a commercial fleet policy, making it “legal enough” to operate.
- 🚦 Reality: It’s a legal workaround, but still a grey area, since the RC remains private (white plate).
- This is why Zoomcar often tells users “we provide insurance coverage via our partner” instead of requiring the owner to convert to a yellow plate.
2. Informal Peer-to-Peer Rentals
- Many people rent their private cars informally via WhatsApp groups, OLX, friends, or small brokers.
- The owner just hands over the car + RC + insurance + ID check, often with a security deposit.
- 🚦 Reality: This is 100% illegal if the RC is white plate, and:
- Police can seize the car.
- Insurance is invalid during commercial use.
- If an accident happens, the owner bears full liability.
3. Tourist Taxi Loophole
- In some states, owners register cars with All-India Tourist Permit (black/yellow plate with “T” mark).
- The vehicle is technically private hire/tourist use, but people use them for self-drive rentals.
- 🚦 Reality: This is semi-legal, but again not strictly under Rent-a-Cab Scheme 1989, so still risky.
4. Conversion to Commercial Registration (Legal Way)
- A private owner can approach RTO to convert their RC from white to yellow plate.
- Requires:
- Fitness certificate
- Commercial insurance
- State transport permit
- 🚦 Reality: Very few individuals do this because:
- Higher road tax & insurance
- Regular fitness inspections
- More upfront compliance cost
- That’s why aggregators try to bypass it with Host Programs.
⚖️ Key Problem in India
- Law is outdated: The Motor Vehicles Act, 1988 only defines private vs commercial — it doesn’t recognize peer-to-peer car sharing.
- Grey Market: Platforms like Zoomcar Host survive by calling it a “lease to company” model.
- Risk: If an accident happens, insurance companies can refuse claims saying: “Private car used for commercial hire = claim denied.”
✅ Future Direction
- NITI Aayog and MoRTH have discussed legalizing private car sharing in India under a proper framework, similar to the US & EU.
- But as of today (2025), it remains grey/illegal unless the car is registered commercial (yellow plate).
🔑 In Short:
- Private cars are being rented in India through loopholes and aggregator-host models, not directly under law.
- Legally safe way = Convert to commercial (yellow plate).
- Practical reality = Most small owners and platforms run in the grey zone with insurance-backed agreements.