Meru Cabs files antitrust suit against Ola and Uber, alleges abuse of market position
Mumbai-based Cab hailing firm Meru Cabs has filed four complaints against its competitors Ola and Uber with Competition Commission of India (CCI), alleging that Uber and Ola are burning vast sums of investor funds to distort the market and are abusing their dominance in four cities.
According to a report in Reuters, Meru alleges that both companies are abusing their market position and that SoftBank’s planned investments in both the cab aggregators only prove that further.
The complaint has been filed by Nilesh Sangoi, CEO of Meru. “Even before there is any merger or alliance between the two through global investors, there is already a unified monopoly,” Reuters quotes him as saying.
Sangoi claims that Uber and Ola have been altering driver incentives and passenger fares in tandem.
This is Meru’s second attempt at a suit against Ola, having lost the first time. In July, CCI ruled against Meru on its allegations that Ola was abusing its dominance in Bengaluru. It ruled that Uber too, was a significant market player and there was no concept in current law to establish collective dominance of companies.
In the second attempt, lawyers and industry experts tell Reuters that SoftBank’s investment in Uber, while being a major investor in Ola could strengthen Meru’s case.
While Sangoi is of a similar view, SoftBank’s plans aren’t mentioned in the latest complaints.
With a presence in 24 cities, Meru was the major organised player in India until Ola and Uber launched their services, taking over the market. However, with Ola and Uber coming into the market plush with funds, Meru, which has no major backer lost out in the race. Both Ola and Uber now together now command nearly 99% of the cab aggregator market in India.
Ola operates in over 100 cities in India, while Uber is present in 30 cities. Adding t Meru’s woes, Uber is the best-funded startup in the world, while Ola has backing from major investors such as SoftBank and Tencent.