Mint Quick Edit | Uber’s pre-ride tips aren’t tips
India’s Central Consumer Protection Authority has Uber under scrutiny for nudging users to tip drivers before their rides. Consumer affairs minister Pralhad Joshi has made a valid point. Are these something else being masked as tips?
Cab aggregator Uber has fallen into the consumer protection regulator’s crosshairs. India’s Central Consumer Protection Authority (CCPA), which is an arm of the consumer affairs ministry, has issued it a notice for nudging ride hailers to tip drivers in advance of their rides.
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While booking a ride, users are offered the choice of tipping varying displayed amounts to the driver, with the user led to view it as a way to get a quick ride confirmation. This has understandably come under the scanner.
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In a post, consumer affairs minister Pralhad Joshi expressed displeasure at such advance tips, calling them “unethical", “exploitative" and an “unfair trade practice." In his words, “Tip is given as a token of appreciation [and] not as a matter of right, after the service."
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Joshi’s argument is right. If tips are not strictly voluntary, they are a form of premium extraction for priority service. Such payments are seen to work in the market, as cash incentives often do, but the way Uber’s tip-box is presented, pre-ride, it can hardly be distinguished from a surge charge. While business pricing should generally be left to businesses, a fair market demands transparency and not price mark-ups masked as tips.
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