Compliance-driven Namma Yatri eyes funds to expand across India

Mint

6 hours ago

Namma Yatri is charting a compliance-first course amid tightening regulations, as the zero-commission ride-hailing app looks to raise funds in the next few months to bolster its business expansion, a top company official said.
The regulatory-first model has found support in some corners, but it also slows down expansion — a trade-off the Bengaluru-based company appears willing to live with. Currently, the company is in talks with partners in several northern, western, and eastern states — but isn't announcing cities yet.
'We don't play in any grey area when it comes to legality," co-founder Shan M.S. told Mint. 'Whether it's yellow board, white board, or bike taxis, we strictly follow regulations — no workarounds or legal interpretations."
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With Karnataka's bike taxi ban taking effect on Monday, the company says it won't use loopholes to operate. 'In Bangalore, we are the only mobility company that has taken a 100% compliance stance — even under business pressure. At times, we are the only app not offering certain services, which means losing some user segments," Shan added.
The company clocks around 200,000 rides a day. 'Each state's implementation is owned by the respective states, so we don't control or own it," Shan said.
'There's been strong inbound interest from multiple northern states, including from driver representatives and local officials asking when we'll launch. But we've realized we don't want to be just another ride-hailing company," he added.
Tariff transparency
The expansion is being timed alongside a new funding round. While details remain under wraps, Shan confirmed the company expects to close it in the next quarter, citing 'significant inbound interest" from investors. This will follow its $11 million seed round in 2024 from Blume Ventures, Antler, and Google.
Namma Yatri's peers have also been caught in a regulatory dragnet over the 'advance tip" feature. The Central Consumer Protection Authority is investigating the matter and has already issued a notice to Uber, with similar notices to Ola and Rapido likely to follow.
The feature, which is also used by Namma Yatri, gives riders the option to add a tip in advance, which may encourage faster ride confirmations.
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Authorities are scrutinizing whether such tipping mechanisms constitute unfair trade practices or dark patterns, coercing users into paying extra before confirming a ride.
'I can confidently say we have no dark patterns. We have made it absolutely clear on our platform that tipping is voluntary. We don't nudge users unless no ride is available in the first 30–60 seconds…" Shan clarified.
Instead of algorithmic surge pricing, the app gives drivers the option to suggest an optional tip—usually ₹10– ₹20—in cases like heavy traffic or when a return ride is unlikely. Riders can accept or reject the tip.
'Instead of opaque algorithmic surge pricing, we provide a middle-ground: a modest, calibrated tip mechanism that gives both riders and drivers some agency," he said.
'If the entire industry agrees to scrap tipping and stick to base fares, we're open to it. But if others continue opaque surge pricing while we offer base fares, it's not sustainable — especially for our driver-first model," he added.
Growth, welfare and beyond
Namma Yatri is also aligning itself with Karnataka's new gig worker welfare rules. Under the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025, platforms must contribute 1–5% of each transaction to a state welfare fund.
'In Bangalore, we are working on a model of setting aside a percentage of our revenue as our means to give back for driver welfare," Shan said.
The company's revenue operates on a subscription model where drivers pay a fixed fee to access the platform and keep 100% of the fare.
It was also the first ride-hailing service to fully integrate with ONDC, with all ride transactions routed through the open network.
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Shan believes this can eventually bring together public and private transport options like metros and buses into a single interface.
Looking ahead, Namma Yatri is piloting services in other verticals such as ambulances and shuttles, and testing AI-led localization to tailor services city by city.
While international ambitions remain on the horizon, Shan clarified they will follow only after the next funding round.
'The vision is to build in India and build for the world," he said, adding, 'Our approach is to be a technology enabler and unifier, not to displace existing players…"