Uber, Ola, Rapido face probe on ‘advance tips’ as minister flags issue
New Delhi: The Central Consumer Protection Authority (CCPA) has launched an investigation into the operations of Ola and Rapido to see whether the cab-hailing apps have introduced the unfair practice of advance tips for consumers to get quicker service. The unfair practice was first red-flagged by Consumer Affairs Minister Pralhad Joshi in the case of Uber which has already been issued a notice on the issue.
“The CCPA is investigating other apps like Ola and Rapido, they will also be served notice if they are found indulging in such practices,” Consumer Affairs Minister Pralhad Joshi said on Thursday in a social media post.
“The practice of ‘Advance Tip’ is deeply concerning,” he said.
“Forcing or nudging users to pay a tip in advance for faster service is unethical and exploitative. Such actions constitute unfair trade practices. A tip is a token of appreciation, not an obligation, and should only be offered after the service is rendered,” he wrote.
“Taking cognisance of this, I asked the CCPA to investigate, and today the authority has issued a notice to Uber, seeking an explanation from the platform,” the Minister added.
Minister Joshi also emphasised the importance of fairness, transparency and accountability in consumer dealings.
When booking a ride via the Uber app, users are prompted to offer a tip of Rs 50, Rs 75, or Rs 100 to potentially secure faster service. The app displays a message stating: “Add a tip for speedier pickup. If you leave a gratuity, the driver may be more inclined to accept the ride.” It further notes, “If you add a tip now, you can’t change it later,” and confirms that drivers receive the full tip amount.
In January, the CCPA had issued notices to both Uber and Ola following allegations that the companies charged different fares for identical rides depending on whether the customer booked via an Android or iPhone device.
However, the companies have denied allegations that their pricing varies based on the type of mobile phone used to book a ride.
