Govt tells cab aggregators to stop advance tipping before rides, calls practice misleading and unfair

The government has directed cab aggregators to discontinue advance tipping options that prompt passengers to pay drivers extra even before a ride is confirmed, calling the practice misleading and an unfair trade practice, Consumer Affairs Secretary Nidhi Khare said on Wednesday.

The directive comes a day after the Central Consumer Protection Authority (CCPA) imposed a Rs 10 lakh penalty on ride-hailing platform Rapido over a range of practices, including prompts asking passengers to increase the amount they were willing to pay while waiting for a driver to accept their booking.

The regulator is also examining the business practices of Uber and Ola, Khare said, adding that investigations into the two platforms are underway.


The action follows complaints received through the National Consumer Helpline about cab aggregators, including concerns over passengers being encouraged to tip before taking a ride.

"(Consumers were) basically alleging that actually even before taking the ride, there was a concept of introducing an advance tip," Khare 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 Khare, who also heads the CCPA.

Khare said tipping should remain entirely voluntary and should be left to passengers to decide after completing their ride rather than being presented as a way to improve their chances of securing one.

Uber, Ola practices under investigation

The government's action is part of a broader examination of cab and bike-taxi aggregators operating in India, with regulators looking particularly at pre-ride tipping and dynamic pricing practices.

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

Dark patterns refer to deceptive user-interface designs or practices that manipulate consumers into making choices they may not otherwise have made.

Khare said the investigations involving Uber and Ola remain in progress.

Why Rapido was fined Rs 10 lakh

The CCPA on Tuesday imposed a "penalty of Rs 10 lakh on Roppen Transportation Services Pvt Ltd, which operates the ride-hailing platform Rapido, for misleading advertisements, unfair trade practices, unfair contract and dark patterns in the manner in which riders were prompted to pay more before their rides were confirmed".

During its examination, the regulator found that Rapido displayed messages encouraging passengers to increase their fare while their ride requests were still being processed.

The "Rapido app displayed prompts such as 'Higher the price, higher the chance of getting a ride' and 'Captains aren't accepting at Rs 60. Try adding +10, +20, +30' while a rider's booking was still being processed", the CCPA said.

The regulator also raised concerns about how Rapido's algorithm presented fares to customers.

"Rapido's algorithm first quoted a fare to the rider and, after the rider booked at that fare, prompted the rider to pay more on the ground that drivers were not accepting the original price," the regulator said.

According to the CCPA, such prompts could create the impression that passengers need to pay more to improve their chances of getting a driver, even after they have already agreed to the originally quoted fare.

CCPA calls practice 'Confirm Shaming'

The regulator classified the practice as "Confirm Shaming", one of the dark patterns covered under the government's 2023 guidelines.

"The practice was held to constitute 'Confirm Shaming', a dark pattern identified under the Guidelines for Prevention and Regulation of Dark Patterns, 2023, as it creates a sense of urgency and fear of losing the ride if the consumer does not agree to pay more," the authority said.

The CCPA noted that when a passenger initially books a ride, the fare shown by the platform already factors in components including distance, travel time, traffic conditions, tolls and the amount payable to the driver.

It therefore found no justification for asking a passenger to pay an additional amount for the same journey before the ride had even begun.

The government's position is that a passenger can still choose to tip a driver, but that decision should come voluntarily rather than through a mechanism that links an additional payment to the likelihood of securing a ride.