Central Consumer Protection Authority Issues Notice To Uber After Mumbai Grahak Panchayat Alleges 'Tip' Extortion For Faster Cab Rides

Mumbai: After the Mumbai Grahak Panchayat (MGP) had filed a complaint flagging the unethical practice of private cab aggregators allegedly forcing consumers to pay a “tip” for faster rides, the Central Consumer Protection Authority (CCPA) has taken cognizance and issued notices to major platforms, including Uber, seeking explanations.

The CCPA has termed the practice as a prima facie violation of consumer rights and an unfair trade practice under the Consumer Protection Act. The complaint alleges that users are being manipulated into paying more for quicker access to cabs—under the guise of vehicle unavailability—an act that consumer groups claim amounts to algorithmic exploitation. Uber did not respond to mail from this newspaper.

Speaking to The Free Press Journal, Nidhi Khare, Chief Commissioner of CCPA, confirmed the development. “After the preliminary inquiry, it appears to be a prima facie case of unfair trade practice and violation of consumer rights. We’ve issued a notice to Uber, giving them an opportunity to respond. Investigations into other platforms are also underway. We often take suo motu cognizance or act on complaints we receive through the National Consumer Helpline (1915),” Khare said.

Advocate Shirish Deshpande, Chairman of the Mumbai Grahak Panchayat, which initiated the complaint, alleged that Uber has been systematically manipulating consumer behavior.

“Uber was inducing consumers to pay extra by showing that vehicles are scarce. It’s a case of algorithmic manipulation aimed at exploiting helpless consumers in need. This practice not only distorts the market but is patently exploitative. We’re glad the CCPA acknowledged this and hope it permanently restrains Uber from continuing this tactic,” Deshpande told FPJ.

Consumer rights activist Kamlakar Shenoy likened the practice to an “official bribe.” “This is not just an unfair trade practice—it’s an institutionalised bribe that allows some consumers to jump the queue. It’s a method to fill corporate coffers by draining common people’s pockets. This merits not just regulatory action but also criminal prosecution,” said Shenoy.

The regulatory heat comes in the wake of a disturbing case reported last week, in which an Uber driver allegedly molested a minor girl in Dadar after diverting her to a secluded location. The victim had booked the cab to travel home from school in Prabhadevi.

Commenting on the incident, Shenoy added: “Companies cannot wash their hands of driver conduct. It’s their duty to ensure all safety protocols are in place before a driver hits the road. Cab firms often take customer safety for granted.”

Reema Chawla, who is already fighting a case against Uber before the Consumer Protection Commission, recounted her ordeal. “Uber left me stranded past midnight with a sick pet. Only after I filed a case did they suddenly introduce a pet-friendly option. Now, tipping is hidden as a mandatory fee for timely service. This isn’t innovation—it’s exploitation. Someone needs to be held accountable,” Chawla said.

Another frequent rider, Binesh Balakrishnan, expressed skepticism over where the extra money actually goes. “I doubt if these so-called tips ever reach the drivers. Uber has a knack for inventing new ways to extract more money from users. I’m not surprised at all.”

Ganesh C said that such behavior by Uber drivers has become routine, “When we book a cab, it shows us an estimated fare. But several times, the driver has called me and said that the company underquotes the fare to customers and doesn’t pay the drivers properly. As a result, they end up requesting — or even pleading with — passengers to pay them extra.”

According to CCPA officials, Uber along with other cab aggregators has been given time to show cause. Based on the response, further action could include penalties, directives to cease the practice, or more stringent regulatory measures. Other platforms offering similar pricing manipulations are also under the scanner.