The Competition Commission of India (CCI) on Tuesday, November 6, rejected allegations of price fixing against app-based taxi service providers Ola and Uber, stating that drivers acceding to “algorithmically determined prices” by the platforms does not amount to collusion between them.
In a 13-page order, the CCI also dismissed complaints that Ola and Uber are imposing a resale price maintenance system on the drivers as well as alleged price discrimination.
For the model followed by cab aggregators, estimation of fares are done by algorithms on the basis of large data sets. Apart from personalized information, various other factors —such as time of the day and traffic situation,—are taken into account with respect to fares.
“Resultantly, the algorithmically determined pricing for each rider and each trip tends to be different owing to the interplay of large data sets. Such pricing does not appear to be similar to the ‘hub and spoke” arrangement as understood in the traditional competition parlance,” the regulator stated.