After Ola Electric, CCPA turns on Ola Cabs; issues order to aggregator on refund options, automatic travel bill

New Delhi: After Ola Electric, the Central Consumer Protection Authority (CCPA) is tightening the screws on Ola Cabs and has ordered India’s largest ride-sharing platform to implement a mechanism that allows consumers to choose their preferred refund method; according to a statement from the Ministry of Consumer Affairs, Food and Public Distribution on Sunday.

This option will help consumers as the current practice of issuing vouchers forces them to use Ola services again even if they do not want to book another trip. The directive was sent to Ola Cabs by the CCPA headed by Chief Commissioner Nidhi Khare after a meeting held with its key officials last week, and seeks to safeguard consumers from coercive business practices, encouraging greater transparency and trust in the economy digital from India.

Ola has also been asked to provide consumers with an invoice for all car trips. The directive was issued after the CCPA found that Ola Cabs was not complying with the Consumer Protection Act, 2019 (CPA) and found the cab aggregator guilty of unethical business practices during hearings, two people aware of the development said. .

“It was observed that failure to issue an invoice or receipt for goods sold or services provided constitutes ‘unfair trade practice’ under the Consumer Protection Act, 2019,” the statement said.

Ola Taxis Directive

While Ola Cabs has been under the CCPA scanner for a while now, and notices were issued earlier; This is the first time that the top government institution for safeguarding consumer rights has issued a directive against Ola Cabs. According to Germany-based data research portal Statista, India’s ride-sharing market will reach $7.53 billion by 2024 and $11.64 billion by 2029.

Between January 1, 2022 and January 31, 2024, Ola customers canceled a total of 40,28,24,709 trips, according to the consumer ministry. Of them, while 356,981,881 cancellations, which represents 88.6%, were free; 45,842,828 trips, or 11.4%, incurred cancellation fees. These cancellation fees have been a major point of contention for customers. The CCPA is also now reviewing complaints regarding the charging of cancellation fees.

Queries emailed on Thursday to spokespersons of Ola Cabs and ANI Technologies Pvt. Ltd remained unanswered till the time of going to press.

“The CCPA observed that whenever the consumer raised any complaint on the Ola app, as part of its no-questions-asked refund policy, Ola only provided a coupon code that could be used for the next ride without providing the consumer with a clear option to Choose between a refund to your bank account or a coupon. “This was observed to violate consumer rights and the no-questions-asked refund policy cannot mean that the company is encouraging people to simply use this facility for another trip,” the statement added.

Complaints against Ola Cabs

The increase in consumer complaints against Ola led the CCPA to intervene. According to the National Consumer Helpline (NCH), 2,061 complaints were registered against Ola from January 1 to October 9, ranging from issues like higher fares charged by consumers, non-refunds, drivers asking for extra money and drivers dropping off at the wrong location and not arriving at the correct pickup location.

“Ola Cabs did not submit any compliance reports or actions taken in response to the notices issued by the CCPA,” said the first person cited above who requested anonymity.

The CCPA’s intervention led to consumer-centric changes in the Ola app, such as prominently displaying the allowed cancellation time and cancellation fee amount, contact details of the grievance officer and nodal officer, and cycles revised payment schedules for drivers to ensure prompt payment, among other changes, according to the statement.

Legal experts underlined the need to protect consumer rights in India’s growing digital economy.

Explaining the importance of the CCPA action against Ola Cabs, Manish K. Shubhay, Partner at The Precept-Law Offices, said: “This action emphasizes the need to protect consumer rights in India’s growing digital market. . “It sends a clear message to all businesses that breaking consumer trust will have serious regulatory consequences, promoting accountability in the industry.”

In many cases, companies use middlemen as a way to protect themselves, shifting responsibility to drivers and consumers, he said. This practice creates accountability gaps, as drivers and consumers must handle issues on their own. Ultimately, it raises concerns about fairness and transparency in the industry, he added.