Cab aggregators can't demand tips before booking rides in India
What's the story
The Indian government has ordered cab aggregators to stop the practice of advance tipping before booking a ride. Consumer Affairs Secretary Nidhi Khare said the practice was misleading and unfair. The directive comes after Rapido was fined ₹10 lakh for unfair business practices, including advance tipping for drivers. Investigations into Uber and Ola's practices are still underway.
Consumer complaints
National Consumer Helpline received numerous complaints
Khare revealed that the National Consumer Helpline has received numerous complaints against taxi ride aggregators.
Nidhi Khare said, "(Consumers were) basically alleging that actually even before taking the ride, there was a concept of introducing an advance tip."
The secretary also heads the Central Consumer Protection Authority (CCPA), which is looking into these issues.
Tipping policy
Uber, Ola also being probed
Khare emphasized that tipping should be a voluntary act, left to the consumer's discretion after completing their ride.
The government is also probing Uber and Ola over similar practices.
The action against Rapido was taken as part of a sector-wide investigation into cab and bike-taxi aggregator platforms in India, specifically looking at pre-ride tipping and dynamic pricing practices.
Dark patterns
CCPA issued notices to multiple cab aggregators
The CCPA had earlier issued notices to Uber, Ola, Rapido, and Namma Yatri for not following the Guidelines for Prevention and Regulation of Dark Patterns, 2023.
Dark Patterns are deceptive user interface designs that manipulate consumers into making unintended choices.
The authority found that Rapido misled users with prompts like, "Higher the price, higher the chance of getting a ride" while their booking was still being processed.
Algorithm manipulation
'Confirm shaming' is a dark pattern under CCPA guidelines
The CCPA found that Rapido's algorithm first quoted a fare to the rider and then prompted them to pay more after booking at that fare.
This created a false impression that paying an additional amount would increase their chances of getting a cab quickly.
The authority termed this practice 'confirm shaming,' a dark pattern under its guidelines.