Indian government accuses Ola, Uber and other aggregators of inflating cab prices for older customers

• The Indian government has warned cab aggregators over rising consumer complaints.
• The government is expected to issue guidelines to remove unfair trade practices.
• The government has also asked aggregators to reveal their algorithm and policies for determining price and cancellation charges.

The government has come down heavily on cab aggregators like Uber and Ola amid increasing consumer complaints over “unfair trade practices” such as surge pricing, ride cancellation, drivers refusing to turn on the air conditioner and more.

According to a report, the consumer affairs ministry held a meeting with companies such as Uber, Ola, Rapido, Meru Cabs and Jugnoo and warned the companies of strict action.

The main issues under discussion included the surge pricing, frequent cancellation of rides by drivers over trivial issues such as the destination and payment mode, refusal to turn on air conditioners in cabs, different pricing for different users and more.

Cab aggregators have announced price hikes in several cities across the country. One of the reasons announced for the price hike was the increasing cost of petrol and diesel in the country. Some cab drivers have also been refusing to turn on the air conditioner, asking riders to pay an additional amount.

Govt warns about strict action

“We told them (cab aggregators) about the rising consumer complaints against their platforms. We gave them the statistics also. We have asked them to improve their system and redress the consumer complaints otherwise the competent authority will take strict action,” Rohit Kumar Singh, consumer affairs secretary said after the meeting.

"The authority is likely to issue an advisory to ensure that unfair trade practices by cab aggregators are not carried on in violation of consumers' rights," said Nidhi Khare, chief commissioner, Central Consumer Protection Authority (CCPA).

"The number of complaints is very high and therefore we have called the cab aggregators for an explanation of their policies," Khare said.

“We are engaged with the Department of Consumer Affairs and deeply appreciate the feedback provided by them and will continue to provide our inputs. 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," Nitish Bhushan, Head of Central Operations, Uber India and South Asia said in a statement to Business Insider India

"We are committed to continually raising the bar – for ourselves, our industry, and most importantly for the people who use our services," Bhushan added.

Inflated price for old customers

Another issue that has come under the government’s scanner is surge pricing and differential pricing for old and new customers. "It appears that cab aggregators are using algorithms to lure new customers, putting old customers at a disadvantage. This is an unfair practice," Khare added.

As per the regulator, cab aggregators are charging a premium to their existing customers and offering discounts to lure new customers. Differential pricing for the same location has been termed as an “unfair practice” by the regulator.

Khare has added that aggregators will be called upon to reveal their algorithms and policies that are used to determine prices, cancellation charges and surge prices.

The aggregators have also been asked to reveal the steps taken by them to safeguard customer’s personal data on their platforms.

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