SUMMARY
Meru argued that Uber employed steep discounting practices during 2014-2017, the initial years of its operation in India, which adversely impacted the ride-hailing industry
The NCLAT issued notices to the CCI and Uber on Meru’s plea and scheduled the next hearing in the matter in January 2024
Meru moved the NCLAT after the CCI dismissed its plea following an investigation which concluded that Uber was not a dominant player due to competition from Ola and other cab services
The National Company Law Appellate Tribunal (NCLAT) has reportedly issued notices to the Competition Commission of India (CCI) and cab aggregator Uber in a plea filed by the latter’s competitor, Meru Cabs.
During the hearing, lawyers representing Meru argued that Uber employed steep discounting practices during 2014-2017, the initial years of its operation in India, which adversely impacted the ride-hailing industry, as per a Moneycontrol report.
The next hearing in the case is scheduled in January 2024.
The Legal Battle
At the heart of the matter is a long-standing dispute between Meru and Uber. In 2015, Mumbai-based Meru approached the CCI, alleging that Uber was engaging in anti-competitive practices.
In its complaint with the CCI, Meru alleged that Uber was charging very low rates for its services. The average market price of radio taxis in Kolkata stood at about INR 20-22 per km before Uber entered the market.
After introducing its services in Kolkata in 2014, Uber first lowered its service rate to about INR 15 per km, which later dropped further to about INR 9 per km along with driver incentives and customer discounting.
However, the CCI rejected Meru’s plea in December 2015, saying it found no prima facie case against Uber. “The Commission is of the view that the OP Group (Uber) does not hold a dominant position in the relevant market,” it said.
In 2016, Meru accused Uber of being a ‘law breaker’ and ‘a company which monetises on price-play’.
Next, Meru took Uber and the CCI to the appellate tribunal, which asked the CCI’s director general (DG) to conduct an investigation into Meru’s allegation.
However, Uber filed an appeal against this order at the Supreme Court. In 2019, the apex court upheld the tribunal’s order, directing the DG to investigate the allegations.
On concluding its investigation, the DG filed its report saying Uber was not a dominant player in the market due to competition from Ola and other cab services.
Following this the CCI dismissed Meru’s plea in 2021. However, Meru approached the NCLAT against this.
Though the NCLAT presented its view that Uber was a new player in the Indian market during the 2014-2017 period and the law allows new companies to offer such discounts to establish the business, Meru’s lawyer argued that several of Uber’s competitors have either gone out of business or are on the verge of shutting down.
It must be noted that Meru also filed a complaint against Ola in 2015 with allegations of predatory pricing, which was also dismissed by the CCI.
Meanwhile, both Ola and Uber continue to face allegations pertaining to unfair trade practices and fare-related issues. Last year, the Central Consumer Protection Authority (CCPA) issued notices to both the cab aggregators for alleged violation of consumer rights and unfair trade practices.
