Latest news with #ConsumerProtectionActof2019
News18
27-05-2025
- Business
- News18
Why Is Uber Under Government Scrutiny For Charging ‘Advance Tips'? Explained
Last Updated: Legal experts say advance tips by Uber, Ola and Rapido appear 'coercive' as 'it does look like an unfair trade practice under the Consumer Protection Act of 2019' Uber, ride hailing app, has been under government scrutiny for allegedly charging passengers 'Advance Tips' for faster service. Pralhad Joshi, Union Minister for Consumer Affairs, called the service 'deeply concerning" on social media. 'Forcing or nudging users to pay a tip in advance, for faster service is unethical and exploitative. Such actions fall under unfair trade practices," the minister wrote. He stressed that the tip should be a token of appreciation given after the service completion, and not an entitlement beforehand. What Action Has Government Taken Against Uber? Joshi has directed the Central Consumer Protection Authority (CCPA) to investigate the matter. 'CCPA has issued a notice to Uber in this regard, seeking explanation from the platform," he posted. He said the CCPA is also investigating other ride-hailing apps, including Ola and Rapido. They will be served notices if found to be indulging in such practices. As of now, Uber has not publicly responded to the CCPA's notice. The outcome of this investigation could have significant implications for tipping practices and service models in India's ride-hailing industry. What Are Advance Tips? Uber's 'Advance Tip' feature in India allows passengers to add a tip for the driver before the ride begins, with the intention of incentivising drivers to accept ride requests more promptly. This feature aims to benefit both riders, by potentially reducing wait times, and drivers, by increasing their earnings. Namma Yatri, which is backed by the government initiative Open Network for Digital Commerce, was the first to start this feature in 2022. Rapido implemented it in 2023. And Uber announced it in November last year and implemented it in April 2025. Like Uber, Rapido urges users to increase the ride fare, saying the available drivers are not accepting a ride at the current price. Similarly, Ola also tells users that their chances of getting a ride more quickly may increase if they add a tip. As per legal experts, the practise appears 'coercive", as 'it does look like an unfair trade practice under the Consumer Protection Act of 2019." Under the Act, unfair methods employed to promote the sale of an item include false representations about its quality and quantity, among other things. How Companies Trick Consumers Uber's 'Advance Tips' issue also highlights 'dark patterns" used by companies to trick customers into buying the product or service. The CCPA issued guidelines in 2023, aimed at regulating and prohibiting such dark patterns. One such tactic listed in the guidelines is false urgency. It refers to falsely stating or implying a sense of urgency or scarcity to mislead a user into making an immediate purchase, or taking immediate action that may lead to a purchase. Last year, nearly 12,000 screens from 53 apps across nine industries were analysed by Advertising Standards Council of India, which identified an average of 2.7 deceptive patterns per app. It included apps like Ola, Uber and Rapido, and found that 32% of surveyed companies showed instances of false urgency, and 42% engaged in drip pricing. Why Is Government Scrutinising Such Companies? The CCPA under Consumer Protection Act, 2019 views advance tipping as coercive. It pressures consumers to pay extra for timely service, undermining the voluntary nature of tipping. Another practice employed by companies is drip pricing. Here, the prices of a product or service are not fully revealed. This practice feels like 'digital haggling," with commuters comparing it to street-side fare negotiations. The advance tips feature creates a perception that rides will not be accepted without a tip, especially during peak hours or bad weather. Some experts noted that consumers are 'held to ransom" to secure rides, with 84% of app taxi users facing cancellations when drivers dislike destinations or payment methods. Uber makes advance tips feature non-refundable, even if service is poor, exploiting a passenger. Social media backlash, as seen in posts on X, likens this to 'bribery" rather than tipping, with users feeling coerced to pay for basic service. Industry sources note that tips are exempt from the 5% GST applied to ride fares, allowing platforms to boost driver earnings without tax liability. This creates an unfair advantage for apps using a Software-as-a-Service (SaaS) model like Namma Yatri, prompting larger players like Uber to adopt the feature to stay competitive. The CCPA is probing whether this skirts tax regulations. Uber and Ola were issued CCPA notices in January for alleged differential pricing based on users' phone operating systems (iOS vs. Android), which both denied. The 'Uber Files' (2022) exposed earlier scrutiny from the Reserve Bank of India and tax authorities over tax liabilities (Rs 800 crore claimed by DGGI in 2024), highlighting a pattern of regulatory challenges. First Published:
India Gazette
09-05-2025
- Business
- India Gazette
Sales of non-compliant walkie-talkie on e-commerce platforms under government radar
New Delhi [India], May 9 (ANI): The Central Consumer Protection Authority (CCPA) has initiated action against the listing and sale of walkie-talkie devices on e-commerce platforms that lack proper disclosures, including licensing, Union Minister of Consumer Affairs announced on Friday. The absence of such critical information constitutes a violation of multiple laws, including the Consumer Protection Act, 2019, the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Use of Low Power, Very Low Power Short Range Radio Frequency Devices (Exemption from Licensing Requirement) Rules, 2018. Minister Joshi wrote on X that the sale of non-compliant wireless devices not only breaches statutory obligations but may also pose significant risks to national security operations. Recognizing the gravity of the issue, the CCPA will issue specific guidelines under Section 18(2)(l) of the Consumer Protection Act, 2019. 'These guidelines aim to ensure legal compliance, enhance consumer protection, and maintain the integrity of the digital marketplace,' the minister posted on X. The Central Consumer Protection Authority (CCPA) occasionally initiates actions against entities that engage in unfair trade practices. Recently, the Central Consumer Protection Authority (CCPA) advised coaching centres to strictly adhere to the necessary guidelines and refrain from placing misleading advertisements. Additionally, it refrained them from making claims of assuring guaranteed success. In another instance recently, the Central Consumer Protection Authority (CCPA) took suo motu action against five restaurants -- Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation -- for failing to refund mandatory service charges despite a judgment held by the High Court of Delhi. The notices were issued under the Consumer Protection Act of 2019, directing the restaurants to refund the service charge amounts. The Ministry of Consumer Affairs, Food and Public Distribution said that this measure is aimed at reducing the undue pressure on Consumers to pay additional amount at the time of availing services at any Restaurant as no Hotel or Restaurant shall force a consumer to pay Service Charge or Service Charge shall not be collected from consumers by any other name. All sellers must strictly adhere to applicable regulatory standards to uphold consumer rights and prevent unlawful trade practices. (ANI)
Time of India
29-04-2025
- Business
- Time of India
SC upholds validity of provisions of Consumer law fixing pecuniary jurisdiction bar
Live Events The Supreme Court on Tuesday upheld the constitutional validity of provisions of the Consumer Protection Act of 2019, which prescribes pecuniary jurisdiction of the district, state and national commissions based on the considerations paid for the goods and services. The pecuniary jurisdiction bar in the Consumer Protection Act of 2019 defines the monetary value of claims that each forum of the consumer dispute redressal commission (district, state, and national) can deal with.A bench of Justices PS Narasimha and Manoj Misra dismissed the plea challenging sections 34(1), 47(1)(a)(i) and 58(1)(a)(i) of the Consumer Protection Act, 2019 prescribing pecuniary jurisdictions of the district, state and national commissions based on value of goods and services paid as consideration, instead of compensation, saying they were not violative of Article 14 of the Constitution."We dismiss the constitutional challenge to sections 34, 47 and 58 of the 2019 Act and declare that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary," the bench said Central Consumer Protection Council and the Central Consumer Protection Authority constituted under the Act shall in exercise of their statutory duties under sections 3, 5, 10, 18 to 22 take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the top court passed the order on writ petitions in which some petitioners have claimed that due to the statute, they were forced to approach the district court owing to the pecuniary jurisdiction bar or else they would have approached the national commission according to the old to the power of Parliament to determine pecuniary jurisdiction, the bench said there is no doubt about the fact that Parliament has the legislative competence to enact the Consumer Protection Act, said under Entry 95 of List I, read with Entries 11-A and 46 of List III, and in exercise of power under Article 246, Parliament has enacted the Consumer Protection Act, Narasimha, who penned the verdict on behalf of the bench, said the legislative competence to prescribe jurisdiction and powers of a court, coupled with the power to constitute and organise courts for the administration of justice, takes within its sweep the power to prescribe pecuniary limits of jurisdiction of the courts or tribunals."Parliament has the legislative competence to prescribe jurisdiction and powers of courts. This power extends to prescribing different monetary values as the basis for exercising jurisdiction," it the issue of provision being discriminatory, the bench said the classification based on the value of goods or services based on the amount paid as consideration is valid."'Consideration' is an integral part of forming any contract. It is also an integral part of the definition of a 'consumer'," the bench said, "Therefore, vesting jurisdiction in the district, state or national commission on the basis of value of goods or services paid as 'consideration', is neither illegal nor discriminatory."The top court said this classification also has a direct nexus to the object sought to be achieved."The value of consideration paid for goods or services purchased is closer and more easily relatable to compensation than the self-assessed claim for damages of a consumer."It is clear that the determination of jurisdiction of the district, state or national commissions on the basis of value of consideration paid for purchase of goods and services has rational nexus to the object of provisioning hierarchy of judicial remedies ," it bench said there is also a misconception that there is some kind of loss of judicial remedy."The relief or compensation that a consumer could claim remained unrestricted, and at the same time, access to the state or the national commission was also not taken away. It is well settled that there is no right or privilege of a consumer to raise an unlimited claim of compensation and thereby choose a forum of his choice for instituting a complaint," it bench said, "In conclusion, while we hold that there is no unrestricted claim for compensation and that it is subject to the determination of the court, we hold that classification of claims based on value of goods and services paid as consideration has a direct nexus to the object of creating a hierarchical structure of judicial remedies through tribunals."
Hindustan Times
29-04-2025
- Business
- Hindustan Times
SC upholds validity of provisions of Consumer law fixing pecuniary jurisdiction bar
New Delhi, The Supreme Court on Tuesday upheld the constitutional validity of provisions of the Consumer Protection Act of 2019, which prescribes pecuniary jurisdiction of the district, state and national commissions based on the considerations paid for the goods and services. The pecuniary jurisdiction bar in the Consumer Protection Act of 2019 defines the monetary value of claims that each forum of the consumer dispute redressal commission can deal with. A bench of Justices PS Narasimha and Manoj Misra dismissed the plea challenging sections 34, 47 and 58 of the Consumer Protection Act, 2019 prescribing pecuniary jurisdictions of the district, state and national commissions based on value of goods and services paid as consideration, instead of compensation, saying they were not violative of Article 14 of the Constitution. "We dismiss the constitutional challenge to sections 34, 47 and 58 of the 2019 Act and declare that the said provisions are constitutional and are neither violative of Article 14 nor manifestly arbitrary," the bench said. It said Central Consumer Protection Council and the Central Consumer Protection Authority constituted under the Act shall in exercise of their statutory duties under sections 3, 5, 10, 18 to 22 take such measures as may be necessary for survey, review and advise the government about such measures as may be necessary for effective and efficient redressal and working of the statute. The top court passed the order on writ petitions in which some petitioners have claimed that due to the statute, they were forced to approach the district court owing to the pecuniary jurisdiction bar or else they would have approached the national commission according to the old law. Referring to the power of Parliament to determine pecuniary jurisdiction, the bench said there is no doubt about the fact that Parliament has the legislative competence to enact the Consumer Protection Act, 2019. It said under Entry 95 of List I, read with Entries 11-A and 46 of List III, and in exercise of power under Article 246, Parliament has enacted the Consumer Protection Act, 2019. Justice Narasimha, who penned the verdict on behalf of the bench, said the legislative competence to prescribe jurisdiction and powers of a court, coupled with the power to constitute and organise courts for the administration of justice, takes within its sweep the power to prescribe pecuniary limits of jurisdiction of the courts or tribunals. "Parliament has the legislative competence to prescribe jurisdiction and powers of courts. This power extends to prescribing different monetary values as the basis for exercising jurisdiction," it said. On the issue of provision being discriminatory, the bench said the classification based on the value of goods or services based on the amount paid as consideration is valid. "'Consideration' is an integral part of forming any contract. It is also an integral part of the definition of a 'consumer'," the bench added. It said, "Therefore, vesting jurisdiction in the district, state or national commission on the basis of value of goods or services paid as 'consideration', is neither illegal nor discriminatory." The top court said this classification also has a direct nexus to the object sought to be achieved. "The value of consideration paid for goods or services purchased is closer and more easily relatable to compensation than the self-assessed claim for damages of a consumer. "It is clear that the determination of jurisdiction of the district, state or national commissions on the basis of value of consideration paid for purchase of goods and services has rational nexus to the object of provisioning hierarchy of judicial remedies," it said. The bench said there is also a misconception that there is some kind of loss of judicial remedy. "The relief or compensation that a consumer could claim remained unrestricted, and at the same time, access to the state or the national commission was also not taken away. It is well settled that there is no right or privilege of a consumer to raise an unlimited claim of compensation and thereby choose a forum of his choice for instituting a complaint," it said. The bench said, "In conclusion, while we hold that there is no unrestricted claim for compensation and that it is subject to the determination of the court, we hold that classification of claims based on value of goods and services paid as consideration has a direct nexus to the object of creating a hierarchical structure of judicial remedies through tribunals."
