[Update] After Uber, CCPA Probing Ola & Rapido Over ‘Advance Tip’

Update| May 23, 02:06 AM IST

A day after the Central Consumer Protection Authority (CCPA) issued a notice to ride-hailing major Uber over its “advance tip” feature for faster ride confirmations, the consumer rights body is now probing ride-hailing platforms Ola and Rapido, too, over the issue. 

Responding to a complaint on X, Union consumer affairs minister Pralhad Joshi said, “CCPA is investigating other apps like @Olacabs and @rapidobikeapp, they will also be served notice if they are found indulging in such practices,” Joshi added. 

Original | May 21, 06:04 PM IST

The Central Consumer Protection Authority (CCPA) today issued a notice to ride-hailing major Uber seeking an explanation over its “advance tip” feature for faster ride confirmations and pickups.

The move comes after Union Consumer Affairs Minister Pralhad Joshi flagged it as “unfair trade practices” and asked the watchdog to look into it.

“The practice of ‘Advance Tip’ 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,” the minister said in an X post. 

“Taking cognisance of this, I had asked CCPA to look into it and today CCPA has issued a notice to @Uber in this regard, seeking explanation from the platform. Fairness, transparency and accountability must be upheld in all customer interactions,” he added.

Uber’s “advance tip” feature suggests that a user can add a tip before the ride begins in exchange for quicker service.

Recently, Uber partnered with the state-backed Open Network for Digital Commerce (ONDC) to offer metro ticketing facility through its app.  

“…working with ONDC has pushed us to reimagine how private innovation can plug into public platforms to deliver seamless, smart solutions and we are just getting started,” said Uber’s chief technology officer Praveen Neppalli Naga.

Earlier this month, Uber announced the expansion of its courier service Uber Courier with the launch of Courier XL in India to deliver large goods.

While cab hailing giants like Uber and Ola are launching one service after the other, the central government is also planning to enter this space by launching ‘Sahkar Taxi’. 

The Centre announced the launch of a state-backed ride-hailling service called ‘Sahkar Taxi’, earlier this year. 

Announcing the launch in March, union home and cooperation minister Amit Shah said that the new initiative will onboard two-wheeler and four-wheeler taxis, as well as rickshaws.

“In the coming months, on a cooperative basis, we are going to launch a government cooperative ‘Sahkar Taxi’ service like Ola and Uber. The service will register two-wheeler taxis, rickshaws, as well as four-wheeler taxis. The profits from this service will not go to any big industrialist but will go solely to the drivers of the vehicles,” the minister said.

The government’s announcement came at a time when the aforementioned ride-hailing giants are facing backlash over high commissions, erratic earnings and lack of transparency for drivers.

Users often complain about surge pricing, ride cancellations and longer waiting periods. Notably, it’s not just Uber that asks for tips before booking, Rapido also shows a similar prompt to users for adding tips to reduce waiting time. 

To keep unfair practices in check, Maharashtra came out with a government resolution (GR) on the Aggregator Cabs Policy 2025 yesterday. Under the policy, INR 100 or 10% (whatever is lesser) of the fare would be credited in the user’s account if the driver cancels a ride. 

It also mandated that the cab aggregator cannot charge more than 1.5 times higher than the standard fee in the name of surge fee.