Show-cause notice issued to Ola Electric after barrage of customer complaints

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A show-cause notice has been issued to Ola Electric by the Central Consumer Protection Authority (CCPA) after nearly 10,000 consumer complaints were received against the electric two-wheeler maker on the National Consumer Helpline in a year starting from September 1 of 2023.

As per the CCPA, the range of complaints against Ola Electric go from faulty vehicles, poor service quality, unfair trade practices and misleading advertisements to ineffective customer service. All of these point to violations of the Consumer Protection Act, 2019.

What are the complaints against Ola Electric?

A majority of the 9,948 consumer complaints received by the CCPA are related to poor service quality or delays in service schedules. As many as 3364 such complaints have been received in a year's period till August 30 of 2024. Then there are 1899 complaints pertaining to delay in delivery of booked units.

The remaining complaints accuse Ola Electric of being unable to fix problems with the electric scooters it sells and providing ineffective customer service. There are also complaints made against incorrect or exaggerated performance and feature-related claims made by the company to sell its e-scooters.

Ola Electric has been given 15 days to respond to the CCPA show-cause notice and says it remains committed to providing comprehensive service experience to its customers.

Has the downfall of Ola Electric begun?

Established in 2017, Ola Electric brought out its first-ever electric scooter in 2021. The S1 was a success because of its features and performance but also because of a low booking amount of ₹500 at the time. Since, however, complaints against the company have only increased with many of those with a reservtion complaining about delayed deliveries due to the company's ‘Direct-to-Customer’ sales model.

Many who eventually managed to ride home in an Ola Electric scooter have also complained about faulty parts and unresponsive customer care.

Recently, Ola Electric CEO Bhavish Aggarwal got into an acidic altercation with Kunal Kamra on X when the standup comedian pointed to the complaints of Ola Electric customers. While Aggarwal insisted that Ola Electric is ramping up its sales and service network, Kamra urged the company to issue refund to disgruntled customers.

The show-cause notice itself could not have come at a worse time for Ola Electric because the company had gone public in August. Share prices tanked on Monday, a day after the Aggarwal vs Kamra feud on the social-media platform. At the time of publishing this report on Tuesday morning, the share price was at ₹87.53, significantly down from a high of ₹146.38 on August 19.

Ola Electric currently offers three versions of its electric scooter - S1X, S1 Air and S1 Pro. It has also rolled out huge discounts in a bid to lure potential customers. But while Ola Electric still has the largest chunk of the electric two-wheeler market in India, its market share fell to 27 per cent by end of September with rivals like Bajaj Auto and TVS catching up.