UBER is not dominant in services offered by radio taxis and yellow taxis in Kolkata

Competition Commission of India (CCI): Extending the limit on relevant product market in Kolkata in comparison to Bengaluru (OLA case), the fair competition regulator CCI closed a case filed against radio-taxi operator UBER. The informant, another radio-taxi operator in Kolkata, alleged that UBER is abusing its dominant position by adopting predatory pricing strategy. The informant alleged that UBER in the relevant market for ‘service offered by radio taxis’ in Kolkata is dominant player owing to its financial capacity, market share and independence from the competitors.

The CCI prima-facie rejected the extent of relevant product market contended by the informant and included yellow taxi service in the relevant product market. Commission observed that commuters in Kolkata rely on the yellow taxis for their day to day travelling/transportation requirements owing to their ease in booking, predictability in terms of availability, low pricing etc. Therefore, according to CCI, Kolkata is a peculiar market in itself. The active presence of yellow taxis and the continuous reliance of commuters on such taxis indicate that yellow taxis provides a viable alternative, in effect posing a significant competitive constraint on the radio taxi operators. Thus, CCI found it appropriate to include yellow taxis within the relevant product market as both types of taxis seem to be posing competitive pressure on each other in Kolkata. Therefore, the Commission viewed that relevant product market in the present case would be the market for ‘services offered by radio taxis and yellow taxis’.

Considering the 41.7 % market share of other competitor OLA cab and competition between the market players and existence of yellow taxis posing a significant constraint on the behaviour of other taxi operators in the city of Kolkata the CCI found that UBER does not seem to enjoy dominant position in relevant market of ‘services offered by radio taxis and yellow taxis in Kolkata’. Since UBER Group is not found to be dominant, there is no need to go into the examination of its conduct in such relevant market. Hence, the case was closed prima-facie. [Meru Travel Solutions Private Limited v. Uber India Systems, decided on 22.12.2015]

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