Cab driver Arun Matashankar Tiwari (38) was arrested late last night.
The alleged incident took place yesterday afternoon when the victim booked an Ola cab in suburban Marol to go to Parel in central Mumbai, senior police inspector Gangadhar Sonawane told PTI.
While the victim sat next to the driver, another woman, sharing the ride, sat in the rear seat. After the other woman got down, Tiwari slowed down the cab and struck conversation with the victim.
Moments later, he unzipped his pants and engaged in an obscene act, the victim told police.
She immediately asked him to stop and got down, and went to the Shivaji Park police station.
A case under section 354 (outraging woman's modesty) and 354 (A) (sexual harassment) was registered against the driver. To nab him, police booked his cab through the Ola app and arrested him when he arrived to pick up the passenger.
An Ola spokesperson said the company has "zero-tolerance" for such behaviour, and it blacklisted the driver as soon as the incident was reported.
"We have extended full support to the customer and relevant authorities for further investigation," the spokesperson said.