Supreme Court rejects plea on cartelisation and anti-competitive practices by Ola and Uber

The Supreme Court has backed the earlier findings of the Competition Commission of India or CCI and rejected the plea alleging cartelisation and anti-competitive practices by cab aggregators Uber and Ola.

Earlier, CCI and NCLAT had found that Ola and Uber do not facilitate cartelisation or anti-competitive practices between drivers, rather they are independent entities which act independently of each other.

"Coming now to the merits, we have already set out the concurrent findings of fact of the CCI and the NCLAT, wherein it has been found that Ola and Uber do not facilitate cartelisation or anti-competitive practices between drivers, who are independent individuals." In this backdrop, the bench said it sees no reason to interfere with these findings. "Resultantly, the appeal is dismissed", said the top court in its order on Dec. 15.

The plea was filed by lawyer Samir Agrawal against CCI and NCLAT’s order. Agrawal in his appeal in 2018 alleged that a trip’s fare is calculated by an algorithm based on many factors and due to algorithmic pricing, neither are riders able to negotiate fares with individual drivers for rides that are booked through the apps, nor are the drivers able to offer any discounts. 

Agrawal sought CCI to initiate inquiry Ola and Uber alleging that they entered into price-fixing agreements in contravention of section 3(1) read with section 3(3)(a) of the Competition Act.

The CCI in its order in November 2018, however, said that the algorithmically determined pricing for each rider and each trip tends to be different owing to the interplay of large data sets.

Agrawal had then filed an appeal before the NCLAT which also favoured the CCI. Thereafter, an appeal was made before the Supreme Court where a bench of Justices R F Nariman, K M Joseph and Krishna Murari dismissed the appeal against NCLAT’s order of May 29, 2020.

Last month, the Union Road Transport and Highway Ministry had issued fresh guidelines to regulate cab aggregators like Ola and Uber. The ministry also set a limit to surge pricing which allows cab aggregators to charge a fare 50% lower than the base fare and a maximum surge pricing of 1.5X of the base fare.