India’s antitrust watchdog rejects radio taxi Meru’s plea against Uber, says there is an 'ever-expanding pool of drivers' available

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India’s antitrust watchdog rejects radio taxi Meru’s plea against Uber, says there is an 'ever-expanding pool of drivers' available
Business Insider
  • Meru alleged that Uber had adopted certain abusive practices to oust its competitors from the market.
  • CCI has observed that Uber is not in the dominant position as Ola too has a strong presence here.
  • Meru had previously alleged that Ola was the dominant player, which CCI had closed as Uber was a “stronger player”.
India’s antitrust watchdog the Competition Commission of India (CCI) has rejected radio taxi service Meru’s plea alleging that cab hailing app Uber abused its dominant position in the Indian ride hailing market.

Meru had alleged that US-based Uber, owing to its dominant position, had adopted certain abusive practices to oust its competitors from the market. These practices included offering unreasonable discounts to the customers leading to low/predatory prices, employing incentive policies that were not economically justified.

Meru noted that these incentive policies were aimed at exclusively engaging the drivers to its network so as to exclude its competitors from having access to such drivers.

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CCI, in its order dated July 14, 2021, has observed that Uber is not in the dominant position in the Indian ride hailing segment, as Bengaluru-based Ola too exists in the market. Back in 2015, Meru had alleged that Ola was the dominant player in the market, which CCI had closed as Uber was a “stronger player”.

“And in the facts of that case [Meru’s plea against Ola in 2015], the Commission was of the view that despite Ola having the largest network, the network effects were not strong enough to deter entry and rapid expansion of another big competitor ‘Uber’ who was competing fiercely with Ola in the relevant market of ‘radio taxi services in Bengaluru’,” CCI said, in its notice of July 14.

The director general (DG) was looking into Meru’s plea against Uber’s dominance in the Indian market and has given a similar finding (submitted in February 2020). Though Meru has said this finding is contradictory to the earlier order on Ola, but CCI has found no such infirmity.

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The DG has found traces of predatory pricing structure in the case of Uber as evident through its losses between 2014-2018. However, it has also found similar trends in the case of both Ola and Meru.

“This shows that the aggressive pricing strategy adopted by Uber was in order to compete aggressively for the market (just like its closest competitor Ola) and to build its network,” CCI has maintained.

The investigation also revealed that the discounts and incentives have gradually declined over time with a positive per trip margin recorded by Uber since October 2017.

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Business Insider has reached out to both Meru and Uber seeking more details about the CCI’s latest ruling. The article will be updated if and when they respond to our queries.

With respect to Meru’s allegation of Uber’s exclusive agreements with its drivers, the DG investigation has revealed that the drivers face no restriction in terms of getting attached to a competitor’s network.

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