Ola, a tough competitor to other giants

That’s not all. There’s more data to contend with. 6Wresearch, another research agency, published a study of the market share in Delhi NCR as of March 2015. This report indicated that Ola Cabs had the leading market share in Delhi as of March 2015. Incidentally, 6Wresearch has a history with the CCI. Its research report was used by the Commission to decide another matter when Mega Cabs accused Ola of predatory pricing and distorting a level playing field. Uber’s contention is that the 6Wresearch report should have been considered.

A quick diversion. Bear in mind that when Meru had first approached the CCI in 2015, the body had passed an order on 10 February 2016 closing the case. It held that prima facie there was no case of dominance by Uber. To quote from it:

The fluctuating market share figures of the various players show that the competitive landscape in the relevant market is quite vibrant and dynamic.” Meru filed an appeal against this order in the COMPAT and fast forward, it got a favourable ruling that its case has merit and must be investigated by the Director General.

Now, back to TechSci and data. In a sworn affidavit, Karan Chechi, research director of TechSci, explained its findings and said that the agency files a report every quarter on the radio taxi industry by conducting market surveys. Uber’s contention is, if the data is published quarterly, how did Meru get hold of two monthly TechSci reports; one published in August 2015 and another in October. How did this happen? Uber also contends that Meru only subscribed to the TechSci reports, just so it could use the information to file the case against Uber.

The submission

Put all of this together, and Uber’s submission is that COMPAT didn’t do a good job. That the body didn’t have enough information to decide if Uber had the largest market share in Delhi NCR. That COMPAT didn’t have the authority to pass an order asking the Director General to investigate the matter because that power only rests with the CCI. That COMPAT overstepped its jurisdiction because its only power is to affirm, modify or set aside an order of the Commission. It ought not to have substituted its view in place of the order passed by the Commission.

Legal mud wrestling aside, it is fascinating to note some of the claims from Uber’s petition before the Supreme Court. Take for instance Uber’s submission that the company cannot affect its competitors, customers or the relevant market in its favour by providing discounts and incentives. To quote from its petition:

“If any service provider attempts to provide discounts or incentives, it is soon countered by other competitors with similar offers. The Appellant (Uber) are not, and has never been in a position where it could act independently.”

Incentives are a tricky issue. More so now, with Uber drivers protesting across the company stopping incentives across India. It will be fair to say that Uber’s deep pockets played a key role in doling out incentives to corner market share.

Let’s end with this dissent note from CCI member Augustine Peter dated 3 August 2015.

The opposite party is engaged in predatory pricing in the relevant market. […] There is an imminent danger of the Informant and even other players in the relevant market getting totally eliminated from the relevant market within a short span of time and there is an urgent need to stop the Opposite party in its tracks. This is coupled with the real danger of competition in the relevant market getting considerably reduced, verging on monopolisation.

Once the Informant and other competitors are eliminated from the market, re-entry for those players is not at all easy given the nature of the market which is network based and is highly dominated by the Opposite party who continues to have access to substantial financial resources which it is diverting for pricing below ‘average variable cost’, irreconcilable with rational business behaviour.”

Did you realise Peter was referring to market domination and monopolisation by Ola? (this was for a case filed against Ola by radio taxi operator FastTrack).

Today, the very same Ola is accusing Uber of doing the same, through ‘capital dumping’. What a difference 1.5 years can make.

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