Uber and Ola are not acting as a cartel, says India’s Supreme Court

• The Supreme Court on Tuesday ruled in favour of Uber and Ola in a case regarding their fare practices.
• Advocate Samir Agarwal had challenged the ride-hailing apps, saying their algorithm gives no freedom to drivers or riders in deciding the fare of the ride.
• Earlier, India’s competition commission and the National Company Law Tribunal too had dismissed the case.

India’s Supreme Court was faced with an appeal that asked whether Uber and Ola can fix the cab fare without the consent of the driver or the rider. The country’s top most court ruled in favour of the cab aggregators.

This is the latest victory for the ride hailing giants, both of whom are backed by Softbank, after both the antitrust regulator, Competition Commission of India, and the appellate body gave similar verdicts.

Uber and Ola, both who have often come under the scanner for their pricing and driver rules, had been challenged by advocate Samir Agarwal. Agarwal had said that by deciding the fare for the ride, the ride-hailing apps don’t leave any leeway for the driver or the rider to discuss the price and come at a fair value.

Agarwal had sought the inquiry under Section 26(2) of the Competition Act.

In his appeal to the CCI in November 2018, Agarwal had said that Uber and Ola “prevents drivers from competing on fares akin to a trade association that facilitates a cartel”. However, the top court struck it down and said that the companies “do not facilitate cartelization or anti-competitive practices between drivers” and that the drivers act as “independent individuals”.

The CCI too had dismissed the allegation and said that “the Commission finds no substance in the first allegation raised by the Informant”. The matter had met with the same fate even after it moved to the NCLAT.

However, this isn’t the first time Uber or Ola have been subject to a legal case for their pricing. Both the platforms use algorithms to deduce the “surge pricing” and final fare of a ride, which has been challenged by many through antitrust cases around the world, including India.

Recently, the Indian government’s new guidelines for motor vehicle aggregators had capped the surge pricing at 1.5 times the base fare, while adding that the driver should receive 80% of the fare applicable on each ride, while 20% will go to the aggregator.

SEE ALSO:
Uber, Ola hit a speed bump as Indian government caps surge pricing and issues new guidelines