CCI rejects dominant position charges against Uber

Fair trade watchdog CCI today dismissed charges of alleged abuse of dominant position by taxi aggregator major Uber, as it rejected the allegations levelled by radio taxi operator Meru Cabs in this regard.
The CCI order follows a probe into complaints filed by Meru Travel Solutions Pvt Ltd against Uber India and two of its group firms including Netherlands-based Uber BV, alleging violation of competition laws.
Meru had alleged abuse of dominant position by Uber in the radio taxi services market in Kolkata, including by way of predatory pricing.
It was alleged that though there are various other players in the Kolkata radio taxi services market apart from Uber, such as Ola (including Taxi For Sure), Sure Taxies, Mega Cabs, the market position of Uber surpassed all others enabling it to operate independent of its competitors.

After looking into the matter, the Competition Commission, however, ruled that Uber "does not hold a dominant position in the relevant market.
It was alleged that Uber abused its dominant position in

the radio taxi services market in Kolkata through predatory pricing. It was accused of charging 'unreasonably' low rate for its services.
Meru stated that the average market price of the radio taxis in Kolkata before the launch of Uber was in the range of about Rs 20-22 per km.
Uber entered the Kolkata market in August 2014 and introduced its services at a rate of Rs 15 per km.

Later, it dropped prices to an unreasonably low rate of Rs 9 per km along with aggressive driver incentives and customer discounting, as a result of which Meru's market share started coming down, Meru alleged.
It alleged that the pricing strategy of the Uber is predatory in nature which can't be matched by the competitors except at a loss.
Based on the TechSci report, Meru has claimed that Uber holds a dominant position in the radio taxi services market in Kolkata on the basis of fleet size (52 per cent).
However, Uber said it has 38.54 per cent market share, which is lesser than OLA's 41.7 per cent.

According to CCI, there exists stiff competition between Uber and OLA with regard to the services they offer in the radio taxi industry in Kolkata.
"The OP Group (Uber) does not seem to hold a dominant position owing to an even larger share held by one of its competitors," CCI said in its 14-page order.
"... The Commission finds it difficult to accept the contention of the Informant regarding OP Group's dominance in the relevant market based on the TechSci report," it added.