Govt reads out the riot act to cab aggregators amid rise in complaints

Takes tough stand on ride cancellation and surge pricing

With complaints mounting, the government has warned cab aggregators like Ola and Uber to comply with surge pricing and driver cancellation mandates as laid down under the Motor Vehicle Aggregator Guidelines within a month, or else face penal provisions, sources said.

Moreover, the Central Consumer Protection Authority (CCPA) is soon expected to come up with a draft advisory for online cab aggregators.

The warning, sources said, came at a meeting held Tuesday between the consumer affairs ministry and representatives of ride-hailing platforms such as Ola, Uber, Meru, Rapido, and Jugnu, among others.

According to an official statement, the cab aggregators have been also directed to become convergence partners in the National Consumer Helpline (NCH) which will enable better grievance redressal for consumers and also ensure compliance with Consumer Protection Act, 2019 and E-commerce Rules, 2020.

There has been a raft of complaints against cab aggregators on allegedly unfair trade practices. These include their ride cancellation policy, as drivers often force customers to cancel trips after accepting bookings, which results in the latter paying cancellation charges. As per the NCH data, 56 per cent of the complaints against the aggregators between April 1, 2021 and May 1, 2022 was for 'deficiency in services'

“We told them about the rising consumer complaints against their platforms. We gave them the statistics too. We have asked them to improve their system and redress the consumer complaints. Otherwise, the competent authority will take strict action,” news agency PTI quoted Consumer Affairs Secretary Rohit Kumar Singh as saying after the meeting.

The Motor Vehicle Aggregator Guidelines has capped surge pricing at 1.5 times higher than the base fare, and also introduced a cancellation penalty for drivers at 10 per cent of the fare, which is capped at Rs 100. However, so far, very few states have made the guidelines operational.

A survey carried out by Local Circles, an online platform dealing with community interests and local governance, revealed that 71 per cent of ride-hailing app users faced cancellation issues while 45 per cent said they were charged more than 1.5 times when it came to surge pricing.

The survey was conducted last month among more than 65,000 app users in 324 districts.

Sachin Taparia, chairman and CEO of Local Circles, said based on the complaints received from users, they have approached the ministry of road transport and highways as well as the CCPA to resolve the issue.

“The government brought out the Motor Vehicle Aggregator Guidelines in November 2020, but its implementation by states has not happened, which in turn has led to consumers being taken for a ride,” Taparia told Business Standard.

Meanwhile, cab aggregators have assured the government that they will comply with all its directives.

“We are engaged with the Department of Consumer Affairs and deeply appreciate the feedback provided by them and will continue to provide our inputs,” said Nitish Bhushan, head of central operations, Uber India and South Asia.

“We strive to be the platform of choice for riders and drivers alike and continue to invest in technology and customer support to deliver an excellent experience for them. We are committed to continually raising the bar – for ourselves, our industry, and most importantly for the people who use our services,” Bhushan, added.

Ola did not respond to queries.