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India Today
4 days ago
- Automotive
- India Today
Why users feel Ola, Uber, Rapido's advance tipping is grossly unfair
Uber and Rapido's "advance tipping" feature, where users are prompted to tip drivers before a ride begins, has come under heavy criticism from the Central Consumer Protection Authority (CCPA) and consumers. Last week, the CCPA issued a notice to Uber, raising concerns about the feature, which encourages users to "add a tip for faster pickup". The advance-tipping feature is unethical and, in a way, promotes bidding for suggests that drivers may be more likely to accept a ride if a tip is included upfront. Rapido and Ola Cabs have also adopted similar models, nudging users to pay extra to improve their chances of securing a ride Minister for Consumer Affairs, Pralhad Joshi, confirmed that the CCPA was investigating ride-hailing apps, including Ola and Rapido. Uber was already under the CCPA scanner. "Forcing or nudging users to pay a tip in advance for faster service is unethical and exploitative. Such actions fall under unfair trade practices. A tip is meant to be a token of appreciation, not a precondition for service," Joshi DID THE ADVANCE-TIPPING SYSTEM START?Interestingly, this controversial system originated with the Karnataka government-backed app Namma Yatri in adopted it in 2023, and Uber rolled it out in April 2025, after announcing the feature late last has defended the feature, saying it's optional and only appears when no driver accepts a ride within 30 Yatri, interestingly, has tweaked its language from "add a tip" to "add more (voluntary)". It is meant to show that advance-tipping is a customer preference and in the ecosystem where cabs are meant to be booked in real time, advance tipping doesn't remain voluntary. There is always a fear playing out – if I don't, others ARE DARK PATTERNS ON E-PLATFORMS?Advance tipping could also be a case of dark patterns and drip pricing — two deceptive design strategies increasingly criticised in digital services.A dark pattern is a manipulative interface design that tricks or pressures users into making choices they might not otherwise make, typically benefiting the platform at the user's expense. In this case, by subtly nudging users to believe that adding a tip will improve their chances of getting a ride quickly, the apps exploit behavioural psychology to drive higher Indian government has asked e-commerce platforms to conduct internal checks for dark patterns on their Affairs Minister Pralhad Joshi said, "Companies must not wait for CCPA to intervene. They should proactively recognise and remove these deceptive practices before notices are issued. This is not regulatory compliance: it's about building trust with your consumers," according to a press release by the Ministry of Consumer pricing, on the other hand, involves displaying a low initial price while gradually revealing additional costs, like tips, throughout the transaction process. What seems like a straightforward fare can suddenly inflate, with users feeling cornered into paying more just to ensure basic example of that would be base fares advertised by airlines. While booking air tickets, passengers pay for a host of charges, including seats, which makes the final fare much higher than the one displayed.A study by the Advertising Standards Council of India (ASCI) also found that 52 of the top 53 apps have deceptive UI (user interface)/UX (user experience) practices that mislead users into opting for something they originally did not intend to study revealed that these problematic apps have been downloaded 21 billion times and flagged the impact on consumer behaviour because of such deceptive patterns discovered include privacy deception, interface interference, drip pricing, and false urgency, an official statement issued by the advertising industry's self-regulatory body ARE UBER, OLA AND RAPIDO USERS SAYING?Public sentiment has been overwhelmingly negative on advance tipping that most ride-hailing services, including the market-dominating Ola Cabs, Uber and Rapido. Social media platforms are flooded with complaints:"This whole 'advance tip' scam started with Bengaluru autos and was pushed by Namma Yatri. Now it's spread like a virus—Uber and Rapido have picked it up, too. Asking for extra money before the ride in the name of 'better service' is nothing but daylight robbery," wrote one user on X (formerly Twitter)."Some action needs to be taken against Rapido and Uber. They're asking for a tip before the ride is even booked. Booking rides used to be much easier before this feature," wrote user called the practice a scam: "Uber India and rapidobikeapp have created this unfair system. Drivers won't accept rides unless you add a tip–sometimes even waiting until the tip reaches 60% or 80% of the fare (sic)."One comment pointed to the deeper issue: "If you allow unethical pricing like surge charges, the next step is bound to be advance tipping. Thanks PralhadJoshiOfc for calling out Uber India's exploitative practice. This kind of Loot Economics must stop (sic)."advertisementSome have also raised questions about whether the tip truly benefits the drivers:"This was rapidobikeapp urging me to tip just seconds after booking a ride. The wait wasn't even a minute. Do tips go entirely to the drivers, or does the company take a share apart from its aggregator fee?"Others highlighted broader issues. "Uber's upfront pricing is hurting drivers. It doesn't compensate them for pickup mileage, time, or wear and tear. The system isn't sustainable–and now this new tipping model makes it worse."The situation is ironic because users took to the ride-hailing apps to get rid of haggling but are now being forced to do the same with drivers online. That is why Ola Cabs, Uber and Rapido aren't just under the government's scanner over advance tipping, they are facing public backlash too.
Mint
23-05-2025
- Business
- Mint
Tip us first: Why new Uber push faces government ire
The Central Consumer Protection Authority (CCPA) has raised concerns about Uber's 'advance tip' option. But Uber's not alone in this. What exactly is an advance tip? Is it unethical? And why has it drawn regulatory scrutiny? Mint breaks it down. Also Read | Covid cases are rising again. Should we be worried? Why are cabs pushing for advance tips? They ask users to tip drivers before booking a ride in exchange for faster service. Apparently this is to compensate drivers for frequent cancellations by riders. Ride cancellations have been the major pain-point in India's mobility sector for years. To be sure, it works both ways: 84% of app taxi consumers face cancellations when drivers are told the destinations and the preferred digital payment method, according to LocalCircles. It also discovered that the issue has intensified in the last two years. A guaranteed tip upfront might make drivers more likely to accept and complete rides. Also Read | Can Bangladesh afford to mix politics and trade? Is Uber alone in this controversy? No, Uber was actually late in introducing this feature. Bengaluru-based mobility startup Namma Yatri, launched in November 2022, was among the first to introduce advance tipping in India's ride-hailing ecosystem. The feature prompts users during the booking process to add a tip of ₹20, ₹50, ₹75 or ₹100, suggesting that a driver may be more likely to accept the ride if a tip is added. Following Namma Yatri, Rapido incorporated advance tipping into its service by late 2023. Ola also offered an option to add an advance tip, without suggesting a faster ride. Uber introduced this feature only in April 2025. Also Read | Mint Primer: US GDP contracts 0.3% in Q1—why the IMF still sees no recession How does tipping work globally? India is an outlier with this experiment. Globally, Uber's standard practice has been to prompt users to tip drivers after the ride is completed. The introduction of pre-ride tipping in India marks a departure from this norm. Other international cab aggregator companies including Lyft and Bolt, among others also enable tipping—but only after the ride ends. Why has the government stepped in? The CCPA sent a notice to Uber after a directive from food and consumer affairs minister Pralhad Joshi, who called the practice unethical and exploitative, raising concerns about consumer rights. A tip is given as a token of appreciation, not as a matter of right, after the service, he said. The argument is that the pay-to-prioritize model puts pressure on riders to pay extra. Reflecting broader scrutiny, the CCPA also pulled up Ola and Uber this year over charges of differential pricing for iOS and Android users. Are there any rules on trip cancellations? The Motor Vehicle Aggregator Guidelines (2020), introduced a penalty of 10% of the fare capped at ₹100 for cancellations by riders or drivers. But its enforcement has been inconsistent. In a first, Maharashtra on Tuesday came out with a policy providing for a 10% penalty on drivers and 5% on riders for cancellations. Other states, such as Karnataka, have implemented aggregator regulations focusing on licensing and operational guidelines, without specifically addressing cancellation penalties.
Indian Express
22-05-2025
- Business
- Indian Express
From ‘add tip' to ‘add more (voluntary)', ride-hailing apps shift gears as watchdog's advance-tipping scrutiny widens
Ride-hailing apps appeared to be engaging in wordplay a day after the Centre pulled up an aggregator over its advancing tipping feature, where users pay extra charges upfront for faster services, dubbing it 'unethical and unprofessional'. Union Consumer Affairs Minister Pralhad Joshi, who directed the Central Consumer Protection Authority (CCPA) on Wednesday to issue a notice to Uber over its advance tipping feature, announced a day later that the CCPA was also investigating other apps such as Ola and Rapido, which he said would similarly be asked for explanations if found indulging in such practices. Following the Centre's action, Benglauru's SaaS(software as a service)-based mobility app Namma Yatri—also the first one to introduce advanced tipping in India—slightly modified language from 'add a tip' to 'add more (voluntary)' to find a ride. The company also defended its tipping policy by arguing that customers are given the option only after 30 seconds, if no driver accepts the ride request from them. The CCPA has not brought Namma Yatri's advance tipping feature under its scanner. Shan M S, chief operating officer of Namma Yatri, said, 'Mobility should be open, transparent, and community-led. On recent tipping concerns: our 'add more' feature is 100 per cent voluntary, customer-led, and the UI (user interface) now clearly reflects this. Namma Yatri's model is direct-to-driver, no commission, no stake in final fares, no discounts, and no unreasonable surge. The goal is simple: pricing that's fair, sustainable, and empathetic to both drivers and riders.' Shan added, 'We fully support the Union minister's call for platforms to be fair, transparent, and accountable — values that have guided us from day one. At Namma Yatri, we have no financial stake in pricing. We do not take commissions, do not control pricing, and 100 per cent of the fare and any voluntary addition goes directly to the driver. We also avoid discounts and unreasonable surge pricing. The app suggests fares based on government-prescribed rates, considering traffic, distance, and congestion—but the final price is always agreed upon by the driver and customer.' Shan also highlighted that to support community-based pricing, Namma Yatri has a bounded driver addition and an optional 'add more' feature for customers—a voluntary gesture to recognise extra effort by drivers during long waits, distant pickups, peak-hour traffic, or return trip availability. For its part, Rapido said it did not charge any advance tip from customers before the ride begins for autorickshaws and cabs but gives passengers an option to 'add an extra fare' for its bike rides. A spokesperson of Rapido said, 'As of now, Rapido has not received any notices or communication from the Central Consumer Protection Authority or any other regulatory body on this subject matter. We remain committed to adhering to all applicable laws and regulations governing our operations and will promptly address any concerns raised by regulatory authorities, should they arise.' The company stated that it did not charge any commission from drivers for autorickshaw and cab rides facilitated through the platform under the SaaS model. Further, Rapido also clarified that the fare is determined directly by passengers and drivers through mutual agreement on the app, without any involvement from the company. 'For bike rides, Rapido operates under a commission-based model. Here, passengers have an option to add an extra fare, which may be interpreted as a surge price. This additional fare is entirely optional and is applied only if the customer explicitly agrees to it,' the spokesperson said. 'Rapido does not charge any tip from customers before the ride begins. This feature is designed solely as a convenience option for passengers, and customers are free to decline it while still being able to secure a ride if the captain accepts the request,' the spokesperson added. Sanath Prasad is a senior sub-editor and reporter with the Bengaluru bureau of Indian Express. He covers education, transport, infrastructure and trends and issues integral to Bengaluru. He holds more than two years of reporting experience in Karnataka. His major works include the impact of Hijab ban on Muslim girls in Karnataka, tracing the lives of the victims of Kerala cannibalism, exploring the trends in dairy market of Karnataka in the aftermath of Amul-Nandini controversy, and Karnataka State Elections among others. If he is not writing, he keeps himself engaged with badminton, swimming, and loves exploring. ... Read More
Indian Express
21-05-2025
- Business
- Indian Express
‘Unethical and exploitative': Consumer watchdog seeks explanation from Uber on advance tipping feature
The Central Consumer Protection Authority (CCPA) on Wednesday issued a notice to ride-hailing app Uber over its advance tipping feature, which prompts users to pay tips to drivers before booking rides, Union Consumer Affairs Minister Pralhad Joshi announced on X. 'The practice of 'Advance Tip' is deeply concerning. 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. 'Tip is given as a token of appreciation not as a matter of right, after the service. 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 explanation from the platform. Fairness, transparency and accountability must be upheld in all customer interactions.' Forward tipping, also referred to as pre-tipping or upfront tipping, is a feature in ride-hailing apps where passengers are prompted to add a tip for the driver at the time of booking a ride, before the trip is confirmed or completed. Unlike traditional tipping, which occurs after the service based on the quality of the experience, forward tipping is designed to incentivise drivers to accept a ride by offering an additional payment upfront. The action comes based on complaints addressed to the minister by multiple users. Many users flagged the way aggregators are seeking 'tips before trips', which goes unchallenged by transport departments across states. Satya Arikutharam, an urban mobility expert, told 'The consumer is held to ransom and very often is forced to tip just to get a ride. Drivers are also now becoming unprofessional due to this practice and are accepting only trips that offer them tips.' Namma Yatri, the Bengaluru-based auto-hailing app launched in November 2022, was among the first to introduce advance tipping in India's ride-hailing ecosystem. The platform, which operates on a zero-commission model where drivers keep 100 per cent of their base fares, implemented tipping as an additional feature on its app. By late 2023, Rapido had also incorporated tipping into its service. Meanwhile, Uber introduced advance tipping only last month, being the last among the ride-hailing firms to adopt this feature. However, the app introduced post-service tipping globally back in 2017. According to an industry source, offering drivers tips upfront has become an industry norm with different names. 'Some platforms that did not pay 5 per cent GST claimed that they have a SaaS (software as a service) model and got drivers to earn more through tips. To avoid an unfair advantage, all players moved to this model eventually,' the source said. Sanath Prasad is a senior sub-editor and reporter with the Bengaluru bureau of Indian Express. He covers education, transport, infrastructure and trends and issues integral to Bengaluru. He holds more than two years of reporting experience in Karnataka. His major works include the impact of Hijab ban on Muslim girls in Karnataka, tracing the lives of the victims of Kerala cannibalism, exploring the trends in dairy market of Karnataka in the aftermath of Amul-Nandini controversy, and Karnataka State Elections among others. If he is not writing, he keeps himself engaged with badminton, swimming, and loves exploring. ... Read More
Time of India
20-05-2025
- Business
- Time of India
Uber to offer logistics services through ONDC network
Ride-hailing company Uber is set to roll out B2B logistics through the government-backed Open Network for Digital Commerce (ONDC) network, offering on-demand delivery service to businesses. The service will begin with food deliveries and later extend to sectors such as ecommerce, grocery, pharmaceuticals, and healthcare logistics, the company said on Monday. Its rival Ola and hyperlocal ecommerce startup Magicpin are already active in the food and beverage (F&B) segment on ONDC. Magicpin's quick delivery offering, MagicNow, currently accounts for 13% of all food delivery orders on the platform, with plans to increase this share to 20% in the coming months. Ola also provides logistics-as-a-service through the ONDC network . Uber had earlier entered the food delivery business in India with Uber Eats, but it sold its operations to food delivery platform Zomato for around $350 million (Rs 2,485 crore) in 2020. Uber has also partnered with ONDC to offer metro ticket booking through its app, starting with Delhi Metro Rail Corporation (DMRC) tickets. The service will soon be extended to three more cities in India, said Prabhjeet Singh, president of Uber India & South Asia, without disclosing further details. 'ONDC's protocol, which is now live, scaled, tested, and reliable, enables us to use it to go live with DMRC faster, with a far more reliable infrastructure, and make it available at scale much quicker than we could have otherwise,' he said. Enabling metro tickets on the Uber network will also attract new customers to the platform, Singh said. Vibhor Jain, acting chief executive and COO of ONDC, said, 'As a global platform, Uber's initial enablement of metro ticketing and logistics unlocks new possibilities — from seamless multimodal journeys to unifying a fragmented logistics ecosystem.' Jain was appointed as acting CEO of ONDC last week following the resignation of former CEO T Koshy on April 9. DMRC recently partnered with ONDC, enabling commuters to book metro tickets through several consumer apps including Rapido and Namma Yatri. The mobility segment of ONDC has seen steady growth, alongside an increase in the logistics sector. In February, ONDC recorded 8.1 million transactions in the mobility category, marking a 47% rise from 5.5 million orders in October 2024. Uber, which competes with Ola Cabs, Rapido, and others, currently offers ride-hailing services on four-wheelers, autorickshaws, two-wheeler taxis, and buses operated under Uber Shuttle, in addition to hyperlocal deliveries. Earlier this month, it launched Courier XL, a service that expands its logistics product Courier, to enable deliveries of large goods. Earlier, ET had reported that ride-hailing app Rapido is in talks with restaurateurs to introduce food delivery as a service on its platform, with a pilot programme expected to launch soon in Bengaluru. Uber, which operates in more than 125 cities across India, has over 1.4 million monthly active drivers in the country, making it the company's third-largest market. According to Uber's chief technology officer Praveen Neppalli Naga, the platform facilitated over a billion trips across India in 2024. Uber saw its operating revenue in India grow by 41% in the fiscal year ended March 31, 2024, to touch Rs 3,762 crore. The company managed to reduce its losses on the back of an improvement in its ride-hailing services and growth in its support and service operations.
