Team-BHP - "Advance Tip For Booking Cabs Unethical": Pralhad Joshi Sends Notice To Uber

The Central Consumer Protection Authority (CCPA) has issued a notice to major cab aggregator Uber for nudging users to pay an advance tip to avail quicker services.

Union Minister of Consumer Affairs Pralhad Joshi said that the practice of "Advance Tip" was worrisome and termed it "unethical" and "exploitative".

Joshi wrote on X:

Quote:

"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. Tip is given as a token of appreciation not as a matter of right, after the service."

Quote:

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.

"Advance Tip For Booking Cabs Unethical": Pralhad Joshi Sends Notice To Uber-grd2e2bgaas9z_.jpg

Quote:

While trying to book a ride on the Uber app, the user is given a choice to pay a tip of either Rs 50, Rs 75 or Rs 100 for a faster confirmation and pick-up.

"Add a tip for faster pickup. A driver may be more likely to accept this ride if you add a top," the message by the cab aggregator shows.

It also says that the driver receives 100% of the tip. "If you add a tip now, you can't change it later."

Source: NDTV, @JoshiPralhad

I guess most ride-hailing apps have a similar feature? Namma Yaatri has the same for autos.

But true, this could end up as the default option eventually with drivers waiting till prices go up before accepting? Not sure how it works on the driver side of the app.

On the other hand, as a user, at least I can see the costs up front and I can choose whether to book or not. I still prefer that over haggling with rude Bangalore auto drivers. And frankly, whatever Namma Yaatri shows, even with these 'tips' is still less than what these auto guys quote when you make the mistake of asking them directly!

I think the minister is correct this time. Tip is a non obligatory gratitude that can be given after the service is rendered. I saw other ride hailing apps have made the auto rides as 'bargain fare' between rider and driver.

Uber half heartedly wanted to go that way with 'advance tip' mode. I think they just have copy this feature of 'bargain price' above base price shown in app soon.

Also, since the apps now just become a platform, they need to declare the 'platform fee' for each ride from the rider (same like from driver) and charge GST on their commission only.

This is not just Uber now. All apps have added it. I think Namma Yatri started this. It is now just like bargaining digitally with a set of unknown drivers instead of doing it directly.

Couple of days back, I was trying for a ride. No luck in the first try, then it said 'add a tip and try' , still no luck, then it says 'increase the top for a better chance of getting a ride' and it goes on. Currently the top amount ranges from 10-50, assume it will soon keep going up. Uber also has some premium mode now, which is 20-30% more expensive.

I assume the drivers know that this is happening and hence will avoid accepting a ride in the first couple of rounds- knowing it will increase. Customers in the desparation to get a ride will continue to add that 20-30Rs.

The other theory is that the aggregator does not show the ride to the drivers at all in the first couple of rounds. Creating an artificial scarcity. Unethical, but definitely possible with some of these aggregators.

Quote:

Originally Posted by Rajeevraj (Post 5974617)

The other theory is that the aggregator does not show the ride to the drivers at all in the first couple of rounds. Creating an artificial scarcity. Unethical, but definitely possible with some of these aggregators.

If this is the case, then it is definitely worrisome and borders on the line of cheating.

But upfront, negotiated tip should ideally be a non issue. I am sure, a major bunch of commuters would not mind paying a 15%-20% premium over an above the existing prices for a sureshot ride (especially during peak / peril times). It is so much nicer to get the negotiation done on an app rather than deal with the unnecessary, artificial language barriers / shouting matches in the middle of the road / outright rejection without even listening to the destination.

Case in point, I needed to get home from the Bangalore Cantt (~14kms) station just after a couple of days after the huge downpour which drowned the city. Since it was early morning, I made the mistake of asking the autowallahs in the stand and was quoted amounts ranging from Rs 600-800 with excuses of excessive rains and no rides for the past of couple of days along with the usual insults that come with rejecting their proposal :disappointed. Promptly booked an uber for ~350 and rushed out of there:D.

I am not sure what their modus operandi is, but these fools are just destroying their own livelihood. They seem to be caught in a viscous cycle of demanding huge fares, then getting no rides and then demanding even bigger fares to cover up for the lost rides and so on.

Quote:

Originally Posted by Rajeevraj (Post 5974617)

...

The other theory is that the aggregator does not show the ride to the drivers at all in the first couple of rounds. Creating an artificial scarcity. Unethical, but definitely possible with some of these aggregators.

Quite possibly what's happening, and also possible they don't show the added tip to the driver either. If they're willing to be unethical, why should we take their word for where the tip goes?

I've faced delays finding cabs at spots in town where there can't possibly be a scarcity (MG Road and Indiranagar metro stations, to name just two). Just tried as an experiment last week when I had some time to kill, was going to take the metro home anyway.

Aggregators are trying every trick they can think of to squeeze revenue and I don't believe for a second they're doing right by their own 'independent contractors' either.

Just curious. Does CCPA review the dynamic pricing that's practiced by Indian Railways and RTCs. The prices sometimes are exorbitant. I don't understand how fair that is and how it's unfair if private players try to charge premium when there's demand and customers willing to play.
The tip part implemented by ride hailing apps is not exactly tip. It's a way of bargaining if raid hailing companies really transferring the amount to driver.

Exactly - the minister must have not used a ride hailing app in years.

I hate it when ministers punish the biggest player for copying a feature already used by the challengers for well over an year - Rapido and Namma Yatri have had it for the longest.

Thanks to this pricing feature, Rapido had killed Uber in the night time in most markets like Delhi and Mumbai - I have seen lots of 4.9+ rated drivers with acceptance ratios of <20% on Uber

Quote:

Originally Posted by am1m (Post 5974336)

Along similar lines, I wish the CCPA would look into packaging charges levied by restaurants. Those are cheeky at best and underhanded at worst. Especially now that it’s become normalised and so many restaurants think nothing of adding a packaging charge that far exceeds the cost of packaging. Same goes for the platform fee levied by food delivery aggregators