
NEW DELHI/CHENNAI: Consumer Affairs Minister Pralhad Joshi said on Thursday that the Consumer Protection Authority (CCPA) has issued notices to cab aggregators Ola and Uber for alleged differential pricing for identical rides based on the user's mobile operating system -- Android or iOS.
"As a follow-up to the earlier observation of apparent #DifferentialPricing based on the different models of mobiles (#iPhones/ #Android) being used, Department of Consumer Affairs through the CCPA has issued notices to major cab aggregators #Ola and #Uber, seeking their responses," Joshi said in a social media post.
Last month, Joshi had emphasised "zero tolerance for consumer exploitation" and asked CCPA to conduct a thorough enquiry into these allegations.
He had described this practice as a "prima facie unfair trade practice" and a "blatant disregard" for consumers' right to transparency.
Industry experts however say that differential pricing on Android phones vs. iPhones by passenger aggregators is an interesting phenomenon that can occur under certain circumstances.
While the core pricing model is generally the same across devices, there are some nuances that might cause price differences between Android and iPhone users, they say.
According to an industry executive there are a few potential reasons for differential pricing between these devices.
"Sometimes, aggregators may offer slightly different features or optimisations on Android versus iOS versions of their apps. This could result in small differences in how the apps calculate pricing or even certain promotions being available to only one platform," he said said seeking confidentiality.
For example, the way that the app handles GPS tracking, route suggestions, or in-app promotions might vary slightly between the platforms, leading to small pricing differences, he added.
Aggregators sometimes run platform-specific promotions, offering discounts or special rates to users on a particular operating system. For instance, a company might offer a limited-time discount to Android users or iPhone users as part of a marketing campaign. This could lead to a differential pricing experience between the two groups.
Similarly, some payment systems might be more common on one platform over the other. For example, Apple Pay is more commonly used on iPhones, while Google Pay or other Android-specific services are more prevalent on Android phones. Payment processors can sometimes lead to minor price adjustments, such as transaction fees, that could affect the final price.
It’s also possible that companies segment their users based on the device they’re using. For example, Uber or Lyft may find that iPhone users, on average, have a different spending behavior or are more likely to book higher-tier services (like Uber Black or Lyft Lux), and they might target different pricing strategies accordingly, said another person familiar with the specific technology used by passenger aggregators.
App store fees and device performance can also influence the pricing.
For instance, Apple’s App Store has a 30 percent fee on all in-app transactions, which can influence how companies price their services. To offset these fees, a company might choose to adjust prices slightly for iPhone users, although this would be unusual unless it was a very deliberate strategy.
And, in some cases, device-specific factors such as network performance or app reliability (which can vary slightly between Android and iOS) might influence pricing. However, this would be a less likely explanation unless there was a significant difference in the quality of service.
It’s important to note that while there are some subtle reasons why pricing could vary, the core pricing structures (like surge pricing, distance-based pricing, etc.) should be the same for both Android and iPhone users. Major pricing differences between the two platforms would likely stem from special promotions or marketing strategies rather than fundamental differences in the way the apps calculate fares.