In a significant development, the central government has intervened to address the mounting consumer complaints against e-scooter manufacturer Ola Electric. The Central Consumer Protection Authority (CCPA) has issued a showcause notice to the company, signaling a serious concern over alleged service deficiencies.
The Scale of Complaints
A Staggering Number
The National Consumer Helpline, operated by the Department of Consumer Affairs, has received a whopping 10,644 complaints related to Ola e-scooters between September 2023 and August 2024. This alarming figure has prompted swift action from the authorities.
Breaking Down the Issues
- 3,389 complaints about service delays
- 1,899 complaints regarding delayed vehicle deliveries
- 1,459 complaints about promised services not being provided
Alleged Violations
The showcause notice highlights potential violations of the Consumer Protection Act, 2019. These include:
- Deficiencies in services
- Misleading advertisements
- Unfair trade practices
- Violations of consumer rights
Specific allegations range from manufacturing defects and selling second-hand vehicles as new, to partial or no refunds on booking cancellations and recurring defects despite servicing.
Government’s Stance
Nidhi Khare, Secretary of the Department of Consumer Affairs, confirmed that the CCPA is investigating the large number of complaints, primarily related to service inefficiencies. The government expects Ola Electric to address these concerns promptly.
Ola Electric’s Response
Ola Electric has acknowledged receiving the showcause notice and plans to file a formal response. The company asserts that the notice doesn’t currently affect its financial or operational activities.
Market Impact
The news has had a significant impact on Ola Electric’s stock, which fell nearly 9% to an intra-day low of Rs 90.26. This decline is part of a larger trend, with the stock plunging 74% from its peak of Rs 157.40 since its market debut on August 9.
Financial Performance
Despite the controversy, Ola Electric reported a 32.3% year-on-year growth in revenue from operations, reaching Rs 1,644 crore for Q1 FY25. However, the company’s consolidated net loss increased to Rs 347 crore, up from Rs 267 crore in the same period last year.
Looking Ahead
As Ola Electric prepares its response to the CCPA, all eyes will be on how the company addresses these serious allegations and works to regain consumer trust in the competitive e-scooter market.
