Govt seeks to end advance tipping on cabs

The Government has ordered cab aggregators to stop providing advance tipping options even before booking a ride, as the practice is misleading and unfair, Consumer Affairs Secretary Nidhi Khare said on Wednesday.  The secretary’s comment comes a day after the Central Consumer Protection Authority (CCPA) slapped a Rs 10 lakh penalty on ride-hailing platform Rapido for various unfair business practices, including advance tipping for drivers.

The authority is currently examining the business practices of Uber and Ola. Responding to queries related to taxi ride aggregators, Khare on Wednesday said the National Consumer Helpline has received a lot of complaints against them.  “(Consumers were) basically alleging that actually even before taking the ride, there was a concept of introducing an advance tip,” she said, adding that consumers were being cajoled that unless they pay the tip, they will not get the ride. 

“Now, this we found to be misleading and also an unfair trade practice. And after detailed investigation into the matter and also after hearing, we have ordered discontinuation of this kind of you know, built-in mechanism,” said the secretary, who also heads the CCPA.

Khare noted that tipping is completely voluntary, and it should be left to the discretion of the consumers after they have taken the ride.

On the Uber and Ola matter, she said the investigations are in progress.

The action against Rapido is based on a sector-wide examination of cab and bike-taxi aggregator platforms operating in India. The probe is being done to examine practices relating to pre-ride tipping and dynamic pricing.

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