CCI gives clean chit to Ola, Uber over price-fixing allegation

Ola

The Competition Commission of India has rejected the allegation against cab aggregators Ola and Uber over deliberate price fixing. The competition watchdog said that it is algorithmically determined prices and both are not practicing any price discrimination claimed by customers.

The complaint was filed against ANI Technologies, Uber India Systems, the Netherlands-based Uber B V and US-based Uber Technologies, the holding company of Uber group.

CCI also explained that the estimation of fares is based on algorithms that factors personalised information, time and nature of traffic.

The regulator also added that the pricing structure is totally different from the traditional ‘hub and spoke’ model. It is an agreement between all drivers to set prices through the platform.

App-based cab hailing platforms don’t follow fixed floor price for drivers, confirmed the regulator. CCI also mentioned that fare offered by Ola and Uber is dynamic in nature and unlike, traditional taxi-hailing solutions, their algo offers price that are typically lower than traditional.

Of late, customers across metros have been facing the hike in fare deployed by Ola and Uber. According to research & advisory firm RedSeer, the average cost per ride on these app-based taxi-hailing service has increased by 15 per cent to Rs 220 in 2018 from Rs 190 in 2017.

In the previous year, customers witnessed an increase of 10 per cent in the average fare.

Simultaneously, incentives for driver partners also went down by over 30 per cent in the last one year. Over supply and the continuous rise in fuel price is one of the reasons behind low income and incentives.

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