The Central Consumer Protection Authority (CCPA) is investigating advance tipping practices by ride-hailing platforms Ola Cabs and Rapido.

This comes after a similar notice was issued to Uber, as confirmed by Union Consumer Affairs Minister Pralhad Joshi on X, formerly known as Twitter.

Joshi said that notices would be served if Ola and Rapido are found encouraging users to tip drivers upfront.

The CCPA earlier called Uber’s advance tipping feature unethical and an unfair trade practice. The app allows users to tip before booking, suggesting faster service, with fixed tip amounts that can’t be changed after selection.

Joshi emphasized that tipping should be a voluntary gesture after service, not a tool to get better service beforehand.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Ride-hailing tipping evolution reveals dramatic business model shift

Uber’s “advance tipping” feature represents a reversal of the company’s original vision of a cashless, tip-free experience that distinguished it from traditional taxis when it launched.

As recently as 2016, Uber considered tipping contrary to its business model, actively discouraging the practice until a $100 million legal settlement forced it to allow drivers in California and Massachusetts to solicit tips 1.

The company formally introduced in-app tipping in June 2017 as part of a broader initiative to improve driver satisfaction during a period of public scrutiny over working conditions 2.

This shift from “no tipping” to “encouraged tipping” to now “advance tipping” reveals how platform economics have evolved as companies face pressure to improve driver earnings without raising base fares.

Research shows the financial significance of this evolution—nearly 60% of Uber riders never tip, and only about 16% of rides receive tips, averaging just $3.11 per tip (26% of the fare) 3.

2️⃣ Digital platforms are fundamentally altering traditional tipping norms

The “advance tipping” controversy highlights a significant departure from traditional tipping customs, where gratuities historically represented appreciation for service already rendered.

The term “tip” itself may have originated in 17th-century England, suggesting tips were meant to reward good service, not secure it in advance 4.

Recent Ola developments