Ola Fined ₹10 Lakh for Unfair Tip Practices by Consumer Authority

New Delhi, November 13 (Daily Kiran) : The Central Consumer Protection Authority (CCPA) has imposed a fine of ₹10 lakh on ANI Technologies Private Limited, which operates the cab service Ola. This action comes in response to complaints that the platform was soliciting additional payments from passengers in the form of ‘tips’ or ‘add-ons’ before their rides were completed.

In an official statement released on Friday, the Ministry of Consumer Affairs, Food and Public Distribution disclosed that the CCPA has ordered Ola to cease this practice immediately. The authority stated that such tactics mislead consumers and fall under unfair trade practices, categorizing them as “dark patterns.”

An investigation by the CCPA examined a feature in the Ola app that prompted users to make additional payments while the app was searching for a driver. It suggested that paying extra could increase the likelihood of securing a ride more quickly.

This directive was issued under the leadership of CCPA Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra. The investigation revealed that after scrutiny, Ola had renamed the feature from ‘tip’ to ‘add-on.’ However, the CCPA noted that the fundamental method of encouraging consumers to pay extra remained unchanged.

The authority assessed various versions of the Ola app interface, which displayed messages implying that giving a tip would enhance the chances of a quicker ride. Phrases like “Adding a tip may increase the chances of getting a ride quickly” were shown while the app was searching for a driver, alongside predetermined options for additional payments.

According to the CCPA, this messaging could lead consumers to believe that paying extra would expedite their ride booking. Despite using terms like ‘may’ or ‘could,’ the overall impact on consumers did not change.

The CCPA criticized Ola’s contradictory stance, where the company claimed that the add-on did not affect ride allocation, while the app’s messages suggested otherwise. Furthermore, the authority pointed out that consumers were not informed that, according to the company’s data, requests with add-ons had a lower acceptance rate. The basis for the suggested additional payment amounts was also not disclosed to users.

The CCPA emphasized that withholding such critical information constitutes a violation of the Consumer Protection Act, 2019, under Section 2(28)(iv). Typically, a tip is a voluntary payment made by a customer after receiving a service. However, requesting a tip before the ride transforms this voluntary payment into a pre-service charge.

The authority clarified that merely renaming the feature from ‘tip’ to ‘add-on’ does not change the nature of the practice. The CCPA deemed Ola’s approach as a method of inducing consumers to make extra payments, creating the illusion that they would receive quicker rides.

Based on these findings, the CCPA has imposed a fine of ₹10 lakh on Ola and has mandated an immediate halt to this practice.