New Delhi: After Ola Electric, the Central Consumer Protection Authority (CCPA) is turning the screws on Ola Cabs and has ordered India’s largest ride-hailing platform to implement a mechanism for consumers to choose their method preferred reimbursement; according to a press release published on Sunday by the Ministry of Consumer Affairs, Food and Public Distribution.

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

Ola has also been asked to provide consumers with a bill for all car journeys. 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 , said two people familiar with the developments.

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

Ola Cabs Guideline

While Ola Cabs has been under the CCPA scanner for quite some time, with notices having been issued earlier; this is for the first time that the apex government institution responsible for protecting consumer rights has issued a directive against Ola Cabs. According to Germany-based data research portal Statista, the Indian ride-hailing services market will reach $7.53 billion in 2024 and $11.64 billion by 2029.

Between January 1, 2022 and January 31, 2024, a total of 40,28,24,709 rides were canceled by Ola customers, according to the Ministry of Consumer Affairs. Of these, 356,981,881 cancellations, or 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 now also reviews complaints related to 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 publication.

“CCPA observed that whenever the consumer raised a complaint on the Ola app, under its no questions asked refund policy, Ola only provided a coupon code which could be used for the next ride without offering the consumer a clear choice. choose between a refund on bank account or a coupon. It has been observed that this violates consumer rights and the no-questions-asked refund policy cannot mean that the company is inducing people to just use this facility to take another ride,” the statement added.

Complaints against Ola Cabs

The increase in the number of consumer complaints against Ola has prompted 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 to the consumer, non-refunds, drivers demanding money extra and drivers dropping off at the wrong location and not reaching the correct pick-up location.

“Ola Cabs has not submitted any compliance reports or actions taken in response to the notices issued by the CCPA,” said the first person cited above, requesting anonymity.

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

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

While explaining the significance of CCPA’s action against Ola Cabs, Manish K. Shubhay, Partner at The Precept-Law Offices, said, “This decision highlights the need to protect consumer rights in the rapidly growing digital marketplace. growth of India. This sends a clear message to all businesses that breaking consumer trust will result in serious regulatory consequences, thereby promoting accountability in the sector.

In many cases, companies use intermediaries to protect themselves, shifting responsibility to drivers and consumers, he said. This practice creates accountability gaps, as drivers and consumers are left to resolve problems on their own. Ultimately, this raises concerns about the fairness and transparency of the sector, he added.