Taxi aggregator Uber got a reprieve from Supreme Court on Friday by getting a temporary reprieve on an enquiry by the Director General, Competition Commission to probe whether the attractive discounts and unbelievably low fares on Uber cabs amounted to “anti-competitive” practices.
Challenging an order passed by the Competition Appellate Tribunal (COMPAT) on December 7, 2016, senior advocate Harish Salve appeared for Uber India Systems Private limited and argued that before ordering an enquiry, the Tribunal had to come to a conclusion that the company holds a dominant position in the radio taxi business in Delhi-NCR. Prior to the Tribunal passing an order, the Competition Commission of India (CCI) on February 10, 2016 held that Uber does not hold a dominant position in the market segment of Delhi. Salve sought a stay of COMPAT’s order.
The bench of Justices Dipak Misra and DY Chandrachud told Salve, “We are not inclined to stay the order. But we will issue notice to Competition Commission and the complainant (Meru Travels).” Salve said that the complaint by Meru proceeded on the basis that since Uber is rich, can afford to spend more due to its international roots, had “abused” its dominant position in the market by engaging in predatory pricing and offering heavy discounts. Moreover, Salve submitted that ordering an enquiry required a “prima facie” opinion to be formed which was absent in the judgment.
The COMPAT headed by Justice GS Singhvi quoted from a report on the Market Share of Radio Taxi in Delhi. As per the study conducted, Uber occupied 44 per cent of total fleet share in the Capital (14500) which accounted for 50 per cent of trips per day (about 33,000).
Meru, despite an active fleet share of 111 per cent, accounted for only 11.2 per cent of total trips per day. When Uber launched in 2013, the taxi fare was `23 per kilometer. Within a year, Uber brought it down to `12 per km and by September 2015 to as low as `7 per km. Due to such predatory pricing, Meru lost `107 crores in just two years.
The apex court agreed to hear the matter on February 17. Salve argued for “status quo” as any inquiry would bring disrepute to the company globally.