Govt gives Uber 15 days to respond on advance tips for rides; Rapido may face similar probe

The Centre has issued a notice to ride-hailing platform Uber, giving it 15 days to respond on the issue of collecting tips in advance to secure a ride. Sources told Business Today that a similar preliminary inquiry against Rapido may be initiated if similar conduct is found.

“Advance tipping creates an unfair bias in service delivery and is being examined as a potential manipulation of consumer rights,” a senior official told BT TV, adding that the government is reviewing app-based ride models to ensure consumer interest is protected.

The Central Consumer Protection Authority (CCPA) has issued a notice to Uber for its 'advance tip' feature, which allows users to pay tips to drivers before booking rides. Uber presents the "advance tip" prompt in the booking process to prompt users to select a gratuity amount prior to beginning the ride.

After issuing a notice to Uber, the government is now likely to turn its attention to Rapido over similar allegations of asking for tips in advance to secure rides. 

Government sources told BTTV that a preliminary enquiry against Rapido could be initiated if it is found to be indulging in similar practices. "We may also look at more ride hailing companies," the source added.

In a post on X, Union Minister for Consumer Affairs Prahlad Joshi expressed concern over this practice, stating that forcing or encouraging users to pay a tip in advance for quicker service is unethical and exploitative. Joshi emphasized that tips should be given as a token of appreciation, not as a requirement for service. Such actions are considered unfair trade practices according to the CCPA.

"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 an explanation from the platform. Fairness, transparency and accountability must be upheld in all customer interactions," Joshi added.

Joshi's post included a screenshot from the Uber app displaying the advanced tipping option with the message, "Adding a tip may increase the chances of a driver accepting this ride.".