Costly Ride? A Consumer Perspective on the Anti-Competitive Practices of App-Based Cab ‘Aggregators’ in India
| Date | 01 September 2016 |
| DOI | 10.1177/2277401720160103 |
| Published date | 01 September 2016 |
| Subject Matter | Article |
COSTLY RIDE? A CONSUMER PERSPECTIVE ON THE
ANTI-COMPETITIVE PRACTICES OF APP-BASED
CAB ‘AGGREGATORS’ IN INDIA
Lovely Dasgupta*
I. Introduction
“Uber Driver: Fare Rs. 1200/-
Taxi Passenger: What! Why!
Uber Driver: Surge Pricing Sir!
Taxi Passenger: What! Why!”
This is a conversation between a confused consumer and an Uber taxi driver,
on a trip from Dum Dum to Jadavpur, in Kolkata. The standard fare for this route,
on a ride by the ordinary yellow cab is anywhere between Rs. 350/- to Rs. 400/-.
These yellow cabs are quickly appearing to be a thing of the past, to be reminisced
about by the old. For the Gen X, Gen Y, and every other generation, the in-thing is
the app based cab aggregators. In Kolkata, and in many other cities of India, the
most popular ones are Uber and Ola. Essentially, the technology that facilitates the
transaction is smartphone based. Anyone wanting to avail the services of Uber or Ola
or any other app based cab service, downloads the relevant app. The app enables the
customer to open the map and locate the available taxi. On the other end, the driver
concerned has her app open for taking the bookings. The service provider acts as a
media and the app facilitates the available driver to get connected to the consumer.
The booking is conrmed, with the customer getting to view the estimated price as
well as the disclaimer relating to price variation. The customer also gets to see the
driver ratings, the cab number and the estimated time of arrival of the cab. There
are other details too, pertaining to the driver’s contact number and the route map
* Ph.D, Assistant Professor at West Bengal National University of Juridical Sciences, Kolkata.
62 Journal of National Law University Delhi VOL 4(1)
as well the expected time to be taken to reach the destination. The technology, on
the face appears to be consumer friendly and transparent. However, the working of
these app-based cab aggregators is confusing and lacks clarity. From essentially a
consumer perspective, the concerns range from surge pricing to predatory pricing to
criminal and civil liability of the companies for the fault of the drivers. The present
paper looks into the competition law concerns that are integral to the operational
strategy of these app based cab aggregators.
II. Regulatory Dilemma for the App-Based cab aggregators
In India, the foremost challenge at the moment is to identify a regulatory
framework for the app based cab aggregators. The legal categorisation itself is
debatable in the sense that there is no clarity as to whether these app based cab
aggregators are to be equated with ordinary taxis or should they be regarded as
transportation technology aggregators.1 The legislation relied on for issuing licenses
to all the app based cab aggregators is the Motor Vehicle Act 1988 (MV Act).2
1 Katherine E O’Connor, ‘Along For The Ride: Regulating Transportation Network Companies’
(2016) 51 Tulsa L Rev 579, 582-83.
2 Motor Vehicles Act 1988, s 93.
93. Agent or canvasser to obtain license.—
(1) No person shall engage himself—
(i) as an agent or a canvasser, in the sale of tickets for travel by public service vehicles or in
otherwise soliciting customers for such vehicles, or tc” (i) as an agent or a canvasser,
in the sale of tickets for travel by public service vehicles or in otherwise soliciting
customers for such vehicles, or”
(ii) as an agent in the business of collecting, forwarding or distributing goods carried by goods
carriages, tc” (ii) as an agent in the business of collecting, forwarding or distributing
goods carried by goods carriages,” unless he has obtained a licence from such authority
and subject to such conditions as may be prescribed by the State Government.
(2) The conditions referred to in sub-section (1) may include all or any of the following
matters, namely:—
(a) the period for which a licence may be granted or renewed; tc” (a) the period for which a
licence may be granted or renewed;”
(b) the fee payable for the issue or renewal of the licence; tc” (b) the fee payable for the issue
or renewal of the licence;”
(c) the deposit of security— tc” (c) the deposit of security—”
(i) of a sum not exceeding rupees fty thousand in the case of an agent in the business of
collecting, forwarding or distributing goods carried by goods carriages, tc” (i) of a sum
not exceeding rupees fty thousand in the case of an agent in the business of collecting,
forwarding or distributing goods carried by goods carriages,”
(ii) of a sum not exceeding rupees ve thousand in the case of any other agent or canvasser,
tc” (ii) of a sum not exceeding rupees ve thousand in the case of any other agent or
canvasser,” and the circumstances under which the security may be forfeited;
(d) the provision by the agent of insurance of goods in transit; tc” (d) the provision by the
agent of insurance of goods in transit;”
(e) the authority by which and the circumstances under which the licence may be suspended
or revoked; tc” (e) the authority by which and the circumstances under which the
licence may be suspended or revoked;”
(f) such other conditions as may be prescribed by the State Government. tc” (f) such other
conditions as may be prescribed by the State Government.”
(3) It shall be a condition of every licence that no agent or canvasser to whom the licence is granted
shall advertise in any newspaper, book, list, classied directory or other publication unless there
is contained in such advertisement appearing in such newspaper, book, list, classied directory or
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