The Central Consumer Protection Authority (CCPA) has instructed ride-hailing service provider Ola Cabs, to ensure a consumer-friendly mechanism that will allow its customers to choose their preferred refund method in case a booked ride is cancelled or the company is refunding an amount to the user. The consumer watchdog has directed the ride-hailing service provider to provide auto-ride receipts to its consumers to bring transparency in the billing procedure.

Interestingly, this directive came immediately after the CCPA ordered an audit of Ola Electric's service centres. The decision was taken after more than 10,000 complaints from Ola Electric customers were received in a year's time with customers pointing to factors such as shoddy parts, delayed delivery, ineffective service and false marketing.

What does the CCPA order to Ola Cabs entail?

As per the directive by the CCPA, Ola Cabs users across India will now have the option to receive refunds either directly to their bank accounts or wallets or via coupons. This will bring a significant change from Ola Cabs' previous refund policy. So far, Ola Cabs used to offer their consumers ride coupons only under its ‘no-questions-asked’ refund policy in case the company was refunding any amount to its users. These coupons can be only used on the Ola Cabs platform, not elsewhere.

This strategy forces the consumers to take Ola Cabs only if they want to take a cab using the refunded amount. However, the CCPA directive will ensure the consumers get back the refund amount to their bank account, wallet or other source of payment, which they can use as per their preference. Also, they can opt for Ola Cabs' ride coupons as well.

CCPA's Chief Commissioner Nidhi Khare has said that this directive is aimed at enhancing consumer rights and service transparency. The directive from the agency came after it observed that the ride-hailing service provider's 'no-questions-asked' refund policy was solely offering coupon codes for future rides without providing a clear choice to consumers. This practice was found to potentially infringe on consumer rights, as it could incentivize consumers to book additional rides rather than offering a direct monetary refund. CCPA has emphasized that a fair refund policy should not unduly push the consumers to utilize services again but should instead empower them with a choice.

Ola Cabs directed to provide auto-ride receipts

The CCPA also took cognisance of Ola Cabs' policy regarding invoices for auto rides. It was found that when customers attempted to access invoices, the ride-hailing app displayed a message stating, “Customer invoice for Auto rides will not be provided due to changes in Ola's auto service T&Cs." The agency deemed this as an unfair trade practice under the Consumer Protection Act 2019, which mandates issuing a bill, receipt, or cash memo for any services rendered.

What prompted CCPA to issue this directive?

The CCPA's directives come amid a significant number of complaints registered on the National Consumer Helpline (NCH). A total of 2,061 complaints were registered against Ola Cabs between 1st January 2024 and 9th October 2024. These complaints covered issues such as higher fares charged by the company than initially displayed at the time of booking, non-refund of amounts to customers, drivers asking for extra cash payments, incorrect drop-off or pickup locations etc., among others.

Ola Cabs claims transparency is key

Following the CCPA's regulatory intervention, Ola Cabs claims it has introduced several consumer-centric changes to the ride-hailing app. One significant change is the display of grievance officer and nodal officer details. The support section of the Ola Cabs website now prominently shows the names, phone numbers, and email addresses of the grievance and nodal officers.

Additionally, the permitted time for a ride cancellation after booking, as per Ola's policy, is now displayed at the time of booking. It also mentions the cancellation fee. Also, additional reasons for cancelling rides have been provided to the consumers. Furthermore, details such as base fare, per-kilometre fare, and pre-wait charges are now displayed prominently.

Besides these consumer-centric changes, the company has introduced some updates for its driver partners as well. The company added a new acceptance screen for drivers showing both the pickup and drop-off locations, which is aimed at avoiding confusion. Ola Cabs has issued communications for its driver partners to accept digital payments and switch on the air conditioning as needed by the consumers.

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