The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea seeking a probe into algorithm-based fare determination system of cab aggregators Ola and Uber. The bench comprised of Acting Chairperson Justice B L Bhat and Justices Venugopal M and Shreesha Merla.
The case first started when Samir Agarwal, an independent lawyer, in 2018 filed a plea asking Competition Commission of India (CCI) to investigate algorithms based fare determination systems of Ola and Uber. On 6th November 2018, CCI dismissed Agarwal’s plea and closed the matter.
Agrawal in his plea claimed that the two ride providing platforms used their respective algorithms to facilitate price-fixing among drivers. He alleged that the companies’ apps used an algorithm to fix prices which the drivers were bound to accept.
When CCI rejected his plea, he further went to the NCLAT, which is an appellate authority above the fair trade regulator. He said that “CCI’s observations that the app determined pricing on many occasions goes lower than what an independent driver would have charged does not legitimise the price-fixing”
A three-member NCLAT bench upheld the order passed by CCI by pointing out that “the petitioner has no locus standi to file a complaint as he has failed to show that he suffered any loss through Ola and Uber.” NCLAT said that these allegations against these companies had no substance.
“The opinion of the Commission in regard to the non-existence of a prima facie case warranting closure of the information cannot be faulted on any ground. We find no legal infirmity in the impugned order. There is no merit in this appeal, it is accordingly dismissed,” it added.
To defend itself, Ola said that ‘it merely acts as an intermediary which connects two ends of the supply chain – a taxi driver and the commuter. “There are numerous variables such as distance, time, availability of cab, weather etc. based on which the Ola App algorithm sets the fare of the trip which makes it impossible for anyone to fix prices” it added. On the other hand, Uber said that “the driver-partners are free to charge any amount which is lower than the one recommended by the App. They are also free to pick up passengers not using the Uber App,”
