Uber not in a dominant position as there is a highly competitive market for radio taxi services in Delhi-NCR: CCI

Case details: Meru Travel Solutions Pvt. Ltd. (Meru) v. Uber India Systems Pvt. Ltd. - [2021] 128 taxmann.com 253 (CCI)[14-07-2021]

Judiciary and Counsel Details

• • Ashok Kumar Gupta | Chairperson
  • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi | Member
  • Sonal Jain, Udyan Jain, Abir Roy, Vivek Pandey, Advs. and Rahul Kalpani for the Informant
  • Amit Sibal, Sr. Adv. Saksham Dhingra, Adv. Ajita Tondon and Rohan Mahendra Arora, for the Respondent.

Facts of the Case

In the rapidly growing radio taxi market of Delhi NCR, Meru had been the market leader. However, Ola replaced Meru and continued as a market leader and thereafter was replaced by Uber. In the intervening period, the fleet size and trip size of these two players, i.e. Uber and Ola, witnessed exponential growth. Ola and Uber displaced each other as market leaders on repeated occasions. As a result, the DG opined that the highly competitive market with fluctuating market shares of Uber and Ola, cannot be construed to be a sign of market power or dominance of Uber.

During the investigation, it has revealed that the drivers face no restriction in terms of getting attached to a competitor’s network, and the driver-partners are typically registered on more than one platform and they routinely multi-home depending on ride availability and short-term incentives schemes on offer. Given the absence of any exclusive agreement between drivers and Uber, the DG has not found any case of contravention of Section 3 against Uber.

Further, the conduct of exclusivity of drivers to the cab aggregator platform through an ‘agreement’ driven by incentives does not meet the legal test of an exclusionary agreement causing an appreciable adverse effect on competition in this particular case. There is an ever-expanding pool of drivers available; and as such ‘locking’ in of drivers through incentives cannot be stated to be a bottleneck facility, which can prohibit entry of new players or the expansion of existing players in the relevant market.

CCI Held

Consequently, it does not establish the dominance of Uber, in the absence of which the question of abuse does not arise within the provisions of Section 4 of the Act. Therefore, the allegations under Section 3(4) read with Section 3(1) are also not found to be established. Hence, the case is hereby closed.