Mint Primer | Tip us first: Why new Uber push faces government ire
CCPA sent a notice to Uber after a directive from food and consumer affairs minister Pralhad Joshi, who called the practice unethical and exploitative, raising concerns about consumer rights.
The Central Consumer Protection Authority (CCPA) has raised concerns about Uber’s ‘advance tip’ option. But Uber’s not alone in this. What exactly is an advance tip? Is it unethical? And why has it drawn regulatory scrutiny? Mint breaks it down.
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Why are cabs pushing for advance tips?
They ask users to tip drivers before booking a ride in exchange for faster service. Apparently this is to compensate drivers for frequent cancellations by riders. Ride cancellations have been the major pain-point in India’s mobility sector for years. To be sure, it works both ways: 84% of app taxi consumers face cancellations when drivers are told the destinations and the preferred digital payment method, according to LocalCircles. It also discovered that the issue has intensified in the last two years. A guaranteed tip upfront might make drivers more likely to accept and complete rides.
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Is Uber alone in this controversy?
No, Uber was actually late in introducing this feature. Bengaluru-based mobility startup Namma Yatri, launched in November 2022, was among the first to introduce advance tipping in India’s ride-hailing ecosystem. The feature prompts users during the booking process to add a tip of ₹20, ₹50, ₹75 or ₹100, suggesting that a driver may be more likely to accept the ride if a tip is added. Following Namma Yatri, Rapido incorporated advance tipping into its service by late 2023. Ola also offered an option to add an advance tip, without suggesting a faster ride. Uber introduced this feature only in April 2025.
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How does tipping work globally?
India is an outlier with this experiment. Globally, Uber’s standard practice has been to prompt users to tip drivers after the ride is completed. The introduction of pre-ride tipping in India marks a departure from this norm. Other international cab aggregator companies including Lyft and Bolt, among others also enable tipping—but only after the ride ends.
Why has the government stepped in?
The CCPA sent a notice to Uber after a directive from food and consumer affairs minister Pralhad Joshi, who called the practice unethical and exploitative, raising concerns about consumer rights. A tip is given as a token of appreciation, not as a matter of right, after the service, he said. The argument is that the pay-to-prioritize model puts pressure on riders to pay extra. Reflecting broader scrutiny, the CCPA also pulled up Ola and Uber this year over charges of differential pricing for iOS and Android users.
Are there any rules on trip cancellations?
The Motor Vehicle Aggregator Guidelines (2020), introduced a penalty of 10% of the fare capped at ₹100 for cancellations by riders or drivers. But its enforcement has been inconsistent. In a first, Maharashtra on Tuesday came out with a policy providing for a 10% penalty on drivers and 5% on riders for cancellations. Other states, such as Karnataka, have implemented aggregator regulations focusing on licensing and operational guidelines, without specifically addressing cancellation penalties.
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