India orders cab platforms to ban pre-booking tipping options

The government has instructed cab aggregators to discontinue advance tipping options presented to passengers before they complete ride bookings, Consumer Affairs Secretary Nidhi Khare announced Wednesday. The measure addresses what regulators have determined to be misleading and unfair business practices that disadvantage consumers.

Khare's statement follows the Central Consumer Protection Authority's imposition of a Rs 10 lakh penalty on Rapido for engaging in various unfair practices, including soliciting advance tips from users. The regulatory authority is currently scrutinising the operational practices of major platforms Uber and Ola.

Consumer grievances regarding ride-hailing services have mounted significantly, with the National Consumer Helpline recording numerous complaints against aggregators. Khare highlighted that consumers reported being pressured to pay tips upfront as a condition for ride confirmation. "Consumers were alleging that even before taking the ride, there was a concept of advance tipping, and they were being cajoled that unless they pay the tip, they will not get the ride," she said.

Authorities have classified the practice as both deceptive and an unfair trade practice, prompting the sector-wide directive. The move reflects intensifying scrutiny of cab aggregator business models in India's ride-hailing sector.