CCPA slaps Uber with notice on its advance tip feature

In a post on X, Pralhad Joshi, Minister of Consumer Affairs, Food and Public Distribution, said forcing or nudging users to pay a top in advance for faster services is unethical and exploitative.

May 22, 2025 - 01:00

CCPA slaps Uber with notice on its advance tip feature

The Central Consumer Protection Agency (CCPA) has sent ride-hailing platform Uber a notice on its advance tip feature that allows users to add a tip to encourage drivers to accept a ride.

In a post on X, Pralhad Joshi, Minister of Consumer Affairs, Food, and Public Distribution, said that the practice of tipping a driver in advance 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,” he added in the post.

Uber did not respond to YourStory’s request for comment on the matter.

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According to an industry source with knowledge of the matter, the model was introduced after some ride-hailing platforms did not pay the 5% GST levied after claiming to have a software-as-a-service (SaaS) model, which helped their drivers earn more through tips. “To avoid an unfair advantage, eventually all players moved to this method,” they added.

The union government had levied a 5% GST on passenger transport services including ride-hailing companies.

Uber shifted to a SaaS model for their auto rides in February this year, following an industry-wide shift towards a subscription-based model for their drivers.

Rival platform Namma Yatri, which pioneered the SaaS model, also allows users to add a tip for the ride. “Adding a tip helps you find a ride faster”, the app shows.

Similarly, Rapido allows users to decrease or increase the requested fare for the ride with a disclaimer, “Higher the price, higher the chance of getting a ride.”

Ola Consumer also introduced a similar option telling users to “tip now to boost the chances of getting a ride sooner.”

Edited by Kanishk Singh