CCPA fines Ola Rs 10 lakh over pre-ride tip feature, orders it to discontinue practice

The CCPA has fined Ola operator ANI Technologies Rs 10 lakh for soliciting pre-ride payments through its tip/add-on feature. The authority said the practice misled consumers, concealed material information and amounted to an unfair trade practice involving a dark pattern

New Delhi: The Central Consumer Protection Authority (CCPA) has imposed a penalty of Rs 10 lakh on ANI Technologies Private Limited, which operates the ride-hailing platform Ola, for soliciting additional payments from consumers before completion of their journeys through its pre-ride ‘tip’/‘add-on’ feature.

The Authority has directed Ola to immediately discontinue the practice, holding that it misleads consumers, constitutes an unfair trade practice and employs a dark pattern.

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The order was passed by the CCPA, headed by Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, following an examination of the feature that prompted consumers to make an additional payment while the app was searching for a driver, suggesting that it could improve their chances of securing a ride faster.

Although Ola subsequently renamed the ‘tip’ as an ‘add-on’, the underlying practice remained unchanged.

The CCPA examined the different versions of the Ola app interface and found that messages such as “Adding a tip might help increase the chances of getting a ride faster”, “Tip now to boost the chances of getting a ride sooner” and “Improve your chances of quicker ride confirmation!” suggested that paying extra would help consumers secure a ride faster.

The Authority observed that these messages appeared while the app was searching for a driver and directly above pre-set payment amounts.

This created the impression that an additional payment could speed up the booking process.

The use of qualifying words such as ‘might’ and ‘chance’ did not alter the overall impression conveyed to consumers.

The authority also noted that Ola’s position was contradictory. While the company stated that the add-on did not influence ride allocation, its app suggested that paying extra could improve the chances of getting a ride sooner.

Further, consumers were not informed that the platform’s own data showed lower acceptance rates for requests carrying an add-on or the basis on which the suggested payment amounts were generated.

The CCPA held that these omissions amounted to concealment of material information under Section 2(28)(iv) of the Consumer Protection Act, 2019.

The Authority observed that a tip is ordinarily a voluntary payment made after a service has been provided.

Soliciting it before the journey effectively converts a voluntary gratuity into a pre-service payment. Merely renaming the feature from ‘tip’ to ‘add-on’ did not change the nature of the practice.