Uber's Indian rival Ola being probed for 'predatory pricing'

Ola is being probed by antitrust body Competition Commission of India

Ola, India's largest ride-hailing service, is being probed by the Competition Commission of India for 'predatory pricing,' including for allegedly spending more than its revenue per trip by offering incentives to customers and drivers.

The probe reflects the fierce competition in the Indian ride-hailing market, with a number of well-funded companies investing large sums to get a quick lead in the market.

The CCI has initiated the investigation following a complaint by rival Fast Track Call Cab that ANI Technologies, which runs Ola, is using funds raised, including from Japan's SoftBank, to wipe out equally efficient competitors who cannot indulge in such predatory pricing in the radio taxi services market. Fast Track has also charged Ola with creating barriers for new entrants.

The CCI has clubbed together taxi services that offer booking by phone or computer or through an app as "radio taxi services," which it considers different from traditional yellow-black colored taxis that have been in operation in the country for years. It has also arrived at the preliminary conclusion that Ola holds a dominant position in the radio taxi services market of Bangalore, which was the city named in the complaint.

Fast Track has also alleged that Ola restricts its driver fleet operators from using any other competing platform for providing their services. Ola is also said to have "incentivized" its drivers unrealistically by using the money raised from foreign investors, which cannot be matched by existing radio cab operators or local enterprises planning to start similar operations in the country.

Based on the material placed on record, the CCI observed that Ola spends per trip around 574 rupees (US$9), while earning an average revenue of 344 rupees, leading to a direct loss of 230 rupees per trip.

"While the propriety of these figures is a subject matter of investigation, prima facie, the Commission is of the view that, they indicate predatory pricing aimed to oust other players from the relevant market," the agency said.

ANI acquired in March a smaller rival TaxiForSure, run by Serendipity Infolabs, for $200 million.

The potential of the Indian market has become evident with Uber Technologies making a pitch for it. But the U.S. company ran into a controversy in December with local authorities after its driver in Delhi allegedly raped a woman passenger. Uber was banned in the city after the incident. Other app-based taxi companies have also come under scrutiny following the rape. Delhi's transport department framed new rules, called the Radio Taxi Scheme, which puts tighter controls on taxi operators.

ANI did not immediately comment on the CCI probe.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetInternet-based applications and servicesANI TechnologiesFast Track Call Cab

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Logitech Ultimate Ears Wonderboom Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?