After Uber, CCPA to send notice to Ola, Rapido for asking users to pay ‘advance tip’

The Central Consumer Protection Authority (CCPA) will send notices to Ola Consumer and Rapido for allegedly nudging ride-hailing users to pay advance tips to drivers for faster service.

This comes a day after Union Minister of Consumer Affairs Pralhad Joshi asked the consumer rights watchdog to send a notice to cab aggregator Uber seeking an explanation on the practice of asking “advance tip” from users.

Calling it “unethical” and “exploitative”, Joshi said the practice of “advance tip” followed by ride-hailing apps is “deeply concerning”.

“Forcing or nudging users to pay a tip in advance, for faster service is unethical and exploitative. Such actions fall under unfair trade practices. Tip is given as a token of appreciation not as a matter of right, after the service,” Joshi said in a post on X. “Fairness, transparency and accountability must be upheld in all customer interactions,” he added.

After sending out a notice to Uber, Joshi said CCPA is investigating other apps like Ola and Rapido. “They will also be served notice if they are found indulging in such practices,” the Union minister said.

Responding to the allegations, Rapido said it has not received any notice or communication from the Central Consumer Protection Authority or any other regulatory body on this matter. “Rapido platform for customers operates via two distinct models. For autos and cabs, we follow a zero-commission SaaS model where fares are agreed directly between the passenger and the driver on the app by a price selection ticker on the App—there’s no advance tip or added charge from our side,” Rapido said in a statement.

“Complete ride fare is directly paid by the customer to the driver via UPI/Cash and payment is never consumed on the Rapido App. For bike rides which still operates on traditional commission based aggregator model, passengers have the option to add an extra fare at the time of requesting the ride. This option of adding extra fare is a transparent way of informing the customer about any probably surge pricing which may get activated if demand is high in that particular area. However, this is completely optional and only gets applied when a customer choses to do so. In all cases, our goal is to offer transparent, choice-driven experiences for both riders and captains,” said Rapido.

Namma Yatri, a ride-hailing app launched in November 2022 in Bengaluru, was one of the first platforms to offer the option of advance tipping. Namma Yatri, developed in partnership with the Auto Rickshaw Drivers’ Union, was hailed as a success story of the Open Network for Digital Commerce (ONDC) in the Economic Survey of India 2023-24. The platform has yet to be issued any notice on the issue of advance tipping.