NEW DELHI: The Central Consumer Protection Authority has issued notice to ride hailing platform Uber over its ‘advance tip’ feature in its app for availing faster service, calling it an unethical and unfair trade practice . The authority is also looking into similar practices by other platforms such as Rapido and Ola, sources said.
Announcing the authority’s action following complaints from users, consumer affairs minister Pralhad Joshi on Wednesday said on X, “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 CCPA has asked Uber to respond to the notice within 15 days.
Consumer affairs secretary and CCPA chief commissioner Nidhi Khare told TOI that such practice leads to “exploiting consumer choice”. She added, “This is unfair trade practice and manipulating customer choice. We are keeping an eye on other platforms in this sector that have such features.”
Joshi said tips should be a voluntary gesture of appreciation given after delivery of service, not something paid upfront. “Fairness, transparency and accountability must be upheld in all customer interactions,” the minister said.
Though Uber had announced the new feature of “upfront tipping” in its app in Nov 2024 to allow riders to “add a tip before a trip, encouraging faster matches and boosting driver earnings, especially during peak hours”, it was introduced a month back. The ride hailing app claims that “a driver may be more likely to accept this ride, if you add a tip. Your driver receives 100% of the tip. If you add a tip now, you can’t change it later”.
There was no response from Uber on the CCPA action.
Industry sources said the practice has become an industry norm and “upfront tipping” is offered in different ways. One of the ride-hailing platforms introduced this in 2023 and another bike and taxi aggregator has been doing this for over a year.
Announcing the authority’s action following complaints from users, consumer affairs minister Pralhad Joshi on Wednesday said on X, “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 CCPA has asked Uber to respond to the notice within 15 days.
Consumer affairs secretary and CCPA chief commissioner Nidhi Khare told TOI that such practice leads to “exploiting consumer choice”. She added, “This is unfair trade practice and manipulating customer choice. We are keeping an eye on other platforms in this sector that have such features.”
Joshi said tips should be a voluntary gesture of appreciation given after delivery of service, not something paid upfront. “Fairness, transparency and accountability must be upheld in all customer interactions,” the minister said.
Though Uber had announced the new feature of “upfront tipping” in its app in Nov 2024 to allow riders to “add a tip before a trip, encouraging faster matches and boosting driver earnings, especially during peak hours”, it was introduced a month back. The ride hailing app claims that “a driver may be more likely to accept this ride, if you add a tip. Your driver receives 100% of the tip. If you add a tip now, you can’t change it later”.
There was no response from Uber on the CCPA action.
Industry sources said the practice has become an industry norm and “upfront tipping” is offered in different ways. One of the ride-hailing platforms introduced this in 2023 and another bike and taxi aggregator has been doing this for over a year.
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