The Central Consumer Protection Authority (CCPA), New Delhi, has asserted that asking users to pay extra before ride confirmation by suggesting it may improve ride availability or speed amounts to misleading advertisement, unfair trade practice, unfair contract and ‘Confirm Shaming’. The Authority noted that ride requests carrying add-ons actually had lower acceptance rates than rides without add-ons, undermining the platform’s claim that paying extra improved the likelihood of securing a ride.
The Authority found that prompts such as ‘Adding a tip might help increase the chances of getting a ride faster’ and ‘Improve your chances of quicker ride confirmation’ created an impression that paying extra would improve ride confirmation chances, despite the company failing to substantiate that claim with evidence. According to the Authority, the prompts created fear and apprehension that consumers who did not pay extra might face delays or fail to get a ride, thereby impairing consumer choice and autonomy.
The CCPA observed that a tip is ordinarily a voluntary appreciation paid after satisfactory service. Seeking payment before the ride begins turns a voluntary gratuity into a pre-service charge and places unfair pressure on consumers. Accordingly, the CCPA ordered immediate removal of all tip/add-on prompts and imposed a penalty of Rs. 10 lakhs, directing the company to submit a compliance report within 15 days.
Briefly, the Misleading Advertisement by Ola concerns proceedings initiated by the Central Consumer Protection Authority (CCPA) against ANI Technologies Private Limited (Ola) over its pre-ride ‘tip’ and later ‘add-on’ feature displayed on the Ola app. Consumers were shown prompts such as ‘Adding a tip might help increase the chances of getting a ride faster’ and ‘Tip now to boost the chances of getting a ride sooner’ before a driver accepted the ride. The complaint alleged that the feature pressured users to pay extra money to improve ride acceptance chances and amounted to a misleading advertisement, unfair trade practice, unfair contract and use of dark patterns.
During the proceedings, Ola contended that it merely acted as an intermediary between riders and drivers, that the payment was voluntary, that the entire amount went to drivers, and that ride allocation algorithms did not prioritize users who paid tips or add-ons. Ola also revised the feature by replacing the term ‘tip’ with ‘add-on’ and maintained that no consumer was compelled to make the payment.
The matter was referred for investigation. The investigation found that the representations made by Ola suggested that paying an additional amount could improve the chances of securing a ride, but the company’s own data did not substantiate that claim. In fact, ride requests carrying add-ons showed lower acceptance rates than rides without add-ons. The investigation concluded that the feature created psychological pressure on consumers and affected consumer autonomy.
The Coram of Nidhi Khare (Chief Commissioner) and Anupam Mishra (Commissioner) observed that the real issue was not whether Ola guaranteed a faster ride, but the overall impression created in the mind of an ordinary consumer. A consumer seeing prompts such as ‘Improve your chances of quicker ride confirmation’ while waiting for a cab would reasonably believe that paying extra would help secure a ride faster. The Authority held that such representations must be supported by evidence.
The Authority noted that Ola’s own data failed to establish that paying an add-on improved ride acceptance or ride confirmation. Rather, acceptance rates for rides carrying add-ons were consistently lower than acceptance rates for rides without add-ons. Therefore, the advertised benefit was not substantiated by data.
The CCPA further observed that Ola adopted contradictory positions. On one hand, it claimed that ride allocation was unaffected by tipping behaviour and that all consumers received equal access to rides. On the other hand, it argued that the add-on helped consumers improve their chances of getting rides. According to the Authority, both positions could not stand together. If add-ons did not influence ride acceptance, the representation was false, and if they did influence acceptance, consumers who chose not to pay were placed at a disadvantage.
The Authority held that an advance tip is fundamentally different from a traditional tip. A tip is ordinarily a voluntary payment made after satisfactory completion of a service. Seeking such payment before the ride begins converts a voluntary gratuity into a pre-service charge and places additional pressure on consumers.
The CCPA also noted that consumers are shown these prompts at a moment of uncertainty and dependence, when they are waiting for ride confirmation and have no information regarding driver availability, demand-supply conditions or the actual necessity of paying extra. This information remains exclusively with the platform. The Authority found that consumers are therefore unable to make a fully informed decision.
The Authority further observed that the suggested add-on amounts kept increasing over time, from Rs. 10 – Rs. 40 initially to amounts as high as Rs. 140, while the platform allowed payments up to Rs. 499. The basis for generating such varying amounts was neither disclosed to consumers nor substantiated before the CCPA.
