India’s consumer affairs ministry has taken action against ride-hailing giant Uber, issuing a formal notice over its controversial “advance tip” feature. The ministry deemed the practice unethical, citing concerns about potential manipulation and pressure on consumers. The notice signals a growing scrutiny of business practices within the gig economy, particularly regarding transparency and consumer protection.

The feature in question allows users to pre-select a tip amount before their ride even begins. While seemingly innocuous, the ministry argues this pre-emptive tipping system could influence riders into adding tips they might not otherwise choose, potentially inflating Uber’s revenue at the expense of fair pricing. The notice demands Uber explain its rationale for the feature and justify its ethical implications.

This move follows increasing public pressure and growing concerns about the lack of transparency in ride-sharing pricing. Critics argue that pre-selected tips obscure the true cost of the ride, making it difficult for consumers to compare prices and choose the most economical option. The ministry’s intervention suggests a broader investigation into potential deceptive pricing strategies within the app-based transportation sector.

The outcome of the notice remains to be seen, but it sends a strong message about the government’s commitment to protecting consumer rights in the digital age. The incident highlights the ongoing debate about the ethical implications of algorithmic pricing and the need for greater regulation in the fast-evolving gig economy. Whether this action will lead to the removal of the advance tip feature or broader regulatory changes, the case underscores the importance of fair and transparent practices in the tech industry.