The government has directed cab and bike-taxi aggregators to stop offering advance tipping options that ask passengers to pay drivers extra before a ride has even been confirmed.
Consumer Affairs Secretary and Central Consumer Protection Authority (CCPA) chief Nidhi Khare said the practice was found to be misleading and an unfair trade practice following complaints from consumers and a detailed investigation.
Advance Tips Could Affect Ride Confirmation
The issue arose after consumers complained that ride-hailing apps were encouraging them to pay an additional tip before taking the ride.
Some users were allegedly given the impression that paying a higher amount could improve their chances of getting a driver or securing the ride.
The government has now ordered aggregators to discontinue such built-in mechanisms.
Khare said tipping should remain completely voluntary and should be decided by passengers after they have completed their journey.
Rapido Fined ₹10 Lakh
The government’s directive came shortly after the CCPA imposed a ₹10 lakh penalty on Rapido’s operator, Roppen Transportation Services Pvt Ltdover various unfair business practices.
The regulator found that Rapido displayed prompts encouraging riders to increase the amount they were willing to pay while their booking was still being processed.
Messages included suggestions that a higher price would increase the chances of getting a ride, while riders could also be prompted to add ₹10, ₹20 or ₹30 to their fare.
CCPA Calls It a Dark Pattern
The CCPA classified the practice as “Confirm Shaming”a dark pattern covered under India’s 2023 guidelines on deceptive interface practices.
According to the regulator, the system could create a false impression that passengers needed to pay more to improve their chances of getting a driver, even after they had already accepted the fare initially displayed by the platform.
The CCPA also noted that the original fare already takes factors such as distance, travel time, traffic, tolls and the amount payable to the driver into account.
Uber and Ola Also Under Investigation
The government action is part of a broader examination of ride-hailing and bike-taxi platforms in India.
The CCPA has issued notices to platforms including Uber, Ola, Rapido and Namma Yatri regarding compliance with the Guidelines for Prevention and Regulation of Dark Patterns, 2023.
Investigations into Uber and Ola are currently underway, with regulators examining practices including advance tipping and dynamic pricing.
Tipping Will Remain Voluntary
The government has not prohibited passengers from tipping drivers altogether. Instead, the focus is on preventing platforms from linking an advance payment to the likelihood of securing a ride.
Passengers can continue to decide whether they want to tip a driver after completing their journey.
Summary
The government has ordered cab aggregators to stop offering advance tipping options before rides are confirmedcalling the practice misleading and unfair. The move follows a ₹10 lakh CCPA penalty against Rapido for practices involving advance payments and dark patterns. Investigations into Uber and Ola are ongoing, while the government has reiterated that tipping should remain voluntary and decided after the ride.