Ola in Big Trouble: CCPA issues show cause notice to Ola amid rising customer complaints

Amid a surge in consumer complaints, the Central Consumer Protection Authority (CCPA) has reportedly issued a show-cause notice to Ola Electric. Dated October 3, the notice outlines potential violations of the Consumer Protection Act, 2019, with the company given 15 days to respond.

Violations Cited in the Notice

The notice highlights several alleged violations, including:

• Deficiencies in service
• Misleading advertisements
• Unfair trade practices
• Consumer rights violations

According to the CCPA, Ola Electric “appears to be in violation of several provisions” under the act. The National Consumer Helpline (NCH), run by the Department of Consumer Affairs, has received numerous complaints related to the company’s e-scooters.

Complaints Against Ola Electric

Since September 2023, the NCH has logged 10,644 complaints against Ola Electric, with the following issues:

• 3,389 complaints regarding service delays
• 1,899 complaints about delays in vehicle deliveries
• 1,459 complaints concerning unfulfilled service commitments

Further allegations include:

• Sale of vehicles with manufacturing defects
• Reselling of second-hand vehicles as new
• Partial or no refunds for booking cancellations
• Overcharging and inaccurate invoicing
• Recurring vehicle defects, even after servicing
• Battery and component malfunctions

Department of Consumer Affairs Statement

Nidhi Khare, Secretary of the Department of Consumer Affairs, commented, “The CCPA is investigating a large number of complaints about Ola Electric, primarily related to service inefficiencies. We expect the company to address these concerns promptly and resolve the issues faced by consumers.”

Declining Stock and Market Share

Ola Electric has also faced significant market pressure, with its stock price falling to ₹89.71 per share, a 9% drop from the previous session. After debuting at ₹76 and peaking at ₹157.40, the company has seen a 42-43% decline, attributed to:

• Persistent hardware and software issues
• Deteriorating service conditions at its centers

Shrinking Market Share in EV Sector

Ola Electric’s market share in India’s electric vehicle (EV) sector has also been shrinking. In September, the company held 27% of the market, selling 24,665 e-scooters, down from 27,587 in August, according to the government’s Vahan portal.

Competitors have launched new, competitively priced models against Ola’s S1 series, which has been plagued by:

• Faulty hardware
• Glitchy software
• Shortages of spare parts leading to service delays

Escalating Consumer Frustration

Consumer frustration has continued to mount, with a recent incident in Karnataka where a disgruntled customer reportedly set fire to an Ola Electric showroom after repeated complaints about the company’s EVs. Reports indicate that Ola Electric receives around 80,000 complaints monthly, reflecting increasing dissatisfaction among its customers.