The escalation of this battle to the Supreme Court is interesting. Not that it could have been ruled out because Uber likes scrappy fights. And it likes to go the distance.
The Ken got hold of and pored over the court documents and the submissions made by both parties. This includes Meru’s petition to the Competition Commission of India (CCI), the Competition Appellate Tribunal (COMPAT) order and the petition and submission made by Uber to the Supreme Court. This story is important to get you up to speed on what’s happening in the fight for the aggregator cab market in India. It also has several nuggets of data and information to give you a better understanding of the cab competition landscape, predatory pricing employed by companies to gain market share, Uber’s business model and the corporate structure in India.
The crux of the matter is this. Does Uber have a majority share in the cab market in Delhi, NCR? Has it used its majority position to offer predatory pricing and distorted the competitive level playing field? And as a result, has it kicked Meru in the gut?
If you were to ask Meru; and they have gone to town with their answer, Yes. They even drew a flowchart explaining how.
Uber? No. From its point of view, there isn’t an iota of truth to Meru’s claims.
At the heart of the matter is also a report from TechSci Research, published in October 2015, titled ‘Delhi NCR Radio Taxi Service Market Analysis’. TechSci is a research agency, and its report is based on publicly available information on players. The data compiled from a survey conducted by TechSci was until September 2015. According to this report, at the time, Uber’s market share was as follows:
Fleet size: 44.42%
Active fleet size: 41.38%
Number of trips: 50.1%
Meru’s contention is that the average price of radio taxis in Delhi NCR before Uber was in the range of Rs 23 per km. Uber launched its service in December 2013 at Rs 20 per km and thereafter successively brought down its per kilometre price to Rs 7 per km, Rs 12 per km and Rs 9 per km for different categories of services. Uber, of course, offers incentives to first-time customers and various other discounts. Plus, Uber incentivises its drivers as well, over and above the fare received from passengers. All put together, this results in a per trip net loss of Rs 204 to Uber.
Meru also produced a purported communication from Uber to its drivers in August 2015, explaining how much they would earn per trip. Rs 403 for a trip for which the customer pays Rs 160.
As of September 2015, Uber was doing 33,000 trips per day in Delhi NCR alone with an active fleet of 6,000 vehicles.