Bike, auto and cab ride hailing platform Rapido has been asked to pay Rs 10 lakh in fine for its “misleading advertisements” by the Central Consumer Protection Authority (CCPA). The consumer body said that Rapido ran misleading advertisements about assured services and cashback benefits, and hence is bound to issue refund to consumers impacted by its campaigns.
“In light of the nature of the violations detailed in the foregoing paragraphs, it is necessary that the opposite party is directed to Pay a penalty of 10,00,000 for publishing misleading advertisement and unfair trade practice,” the CCPA said in its 52-page order.
It added that Rapido must ensure that “any consumer who availed the “AUTO IN 5 MIN OR GET ₹50″ offer and did not receive the promised ₹50 compensation shall be reimbursed the said amount in full without any further delay or condition.”
The regulator has also directed the company to submit a compliance report within 15 days.
What campaign did Rapido run?
The CCPA order mentions that Rapido ran a campaign “Auto in 5 min or get Rs 50”, misleading customers by promising them guaranteed services. The penalty comes after the CCPA took suo moto cognizance of the advertisements that promised riders an auto in five minutes, others they would be given Rs 50.
However, the said Rs 50 compensation was not paid in cash but given as “Rapido coins”, which could only be used for bike rides, and had an expiry of just seven days. Moreover, it was restricted to limit their value. The CCPA said that this effectively forced repeat usage of the service under unfair terms.
The authority said the advertisements were not only misleading but were also run for a long period (1.5 years), which must have had huge impact. It said the data showed the ads were broadcast for 548 days, in several languages across more than 120 cities.
The CCPA noted from April 23 to May 24, a total of 575 consumer complaints were filed on National Consumer Helpline (NCH), relating to deficiency in services, non-refund of paid amounts, overcharging, failure to provide promised services, and non-return of money.
In its order, the CCPA said that Rapido had engaged in “a practice calculated to mislead consumers by both commission and omission.”
Apart from the fine, the regulatory body directed Rapido to withdraw the misleading advertisements immediately.