Ola Cabs under CCI scanner for predatory pricing

May 07, 2015 03:00 am | Updated 03:00 am IST - NEW DELHI:

Fair trade watchdog The Competition Commission of India (CCI) has ordered a probe against app-based radio taxi service operator Ola Cabs for alleged predatory pricing to keep out the rivals.

Fast Track’s Complaint The latest probe follows a complaint filed by rival Chennai-based Fast Track Call Cab Pvt. Ltd. against ANI Technologies Pvt. Ltd., which provides radio taxi services under Ola brand.

For this case, CCI has taken ‘radio taxi services’ as the relevant market.

The Commission said it was of the view that ‘prima facie’ the conduct of Ola amounted to abuse of dominant position. The Commission has directed its investigation arm — Director General (DG) — to probe the matter.

DG would also look into the conduct of officials of Ola, CCI said in its order dated April 24, which was made public on Wednesday.

“It is observed from the material placed on record that the opposite party is spending more money on discounts and incentives (apart from the variable costs it may be incurring) on customers and drivers compared to the revenue it is earning,” the regulator said. Besides, it was observed that Ola was spending more per trip as compared to its average revenue gain.

“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 order said.

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