Centre Asks Ola, Uber, Rapido To Do Away With Advance Tipping Option

The government has directed cab aggregators to discontinue the practice of offering consumers an option to tip drivers before a ride is booked, Consumer Affairs Secretary Nidhi Khare said on Wednesday, terming the practice misleading and an unfair trade practice.

Khare said the National Consumer Helpline had received several complaints from consumers regarding taxi and ride-hailing aggregators. One of the key concerns was the introduction of an advance tipping option before the consumer had even taken the ride.

According to the secretary, consumers had alleged that they were being encouraged to pay a tip in advance and were made to believe that failing to do so could affect their ability to secure a ride.

"We found this to be misleading and also an unfair trade practice," Khare said, adding that following a detailed investigation and hearing, the authorities had ordered the discontinuation of the built-in mechanism.

Khare, who also heads the Central Consumer Protection Authority (CCPA), stressed that tipping is entirely voluntary and should remain at the consumer's discretion after the completion of a ride.

Her comments came a day after the CCPA imposed a penalty of Rs 10 lakh on Roppen Transportation Services Private Limited, which operates the ride-hailing platform Rapido, for alleged unfair business practices. The action included concerns over advance tipping, misleading advertisements, unfair contract terms and the use of dark patterns that prompted riders to pay more before their rides were confirmed.

The CCPA is also examining the business practices of other major ride-hailing platforms. Khare said investigations involving Uber and Ola are currently underway.

The action against Rapido follows a broader sector-wide examination of cab and bike-taxi aggregators operating in India. The review covers practices including pre-ride tipping and dynamic pricing.

The CCPA had earlier issued notices to Uber, Ola, Rapido and Namma Yatri, directing the platforms to comply with the Guidelines for Prevention and Regulation of Dark Patterns, 2023.

Dark patterns refer to deceptive or manipulative user-interface designs that can influence consumers into making choices they may not otherwise have intended to make.

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