TMI Blog2017 (7) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... radio taxi apps. The radio taxi apps are offered for free and can be easily downloaded on smartphones and can coexist on the same handset. Thus, availing the services of one aggregator s network does not preclude the use of another. Once these apps are installed on a device, riders can switch from one app to another in no-time. In fact, both drivers and riders can have applications developed by multiple service providers and can multi-home . In most markets, every enterprise will have some degree of market power, by virtue of which they can affect consumers or competitors in its favour to some extent. The narrow interpretation of the concept of dominance offered by the Informant would mean that an entrant armed with a new idea, a superior product or technological solution that challenges the status quo in a market and shifts a large consumer base in its favour would have to be erroneously held dominant. To preclude possibilities of such anomalies in approach in assessing dominance, the Act lays down a holistic framework for assessing dominance and lists out the relevant factors including relative strength of competitors, entry conditions and countervailing power. Thus, the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of OP and Uber is rejected herewith - The in-depth analysis in the preceding paragraphs clearly demonstrates that, during the period under investigation, OP did not have the ability to act independently of its competitors or consumers in the market. In the absence of dominance of OP, examination of abuse or any analysis of pricing strategy by OP is neither warranted nor permitted under the provisions of the Act. The Commission does not fully disagree with the Informants that the low prices of OP are not because of cost efficiency, but because of the funding it has received from the private equity funds. But as discussed above, there is no evidence that the access to such funding was inequitable and that the market for financing was not competitive and had aberrations. Moreover, it was their penetrative pricing strategy that facilitated them to garner high market shares in short span of time as well as develop the networks to a size that could provide sufficient positive externalities to the participants of the network. The Commission is of the view that the evidence on record does not establish the dominance of OP and its consequent abuse within the provisions of Section 4 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s associated with them which amounts to predatory pricing under Section 4(2)(a)(ii) of the Act. This conduct, as per the Informants, has affected other competitors in the market who cannot offer similar discounts/incentives to commuters/drivers. 5. At that stage, the Commission, based on the high market share of OP, was prima facie of the view that OP held a dominant position in the market for Radio Taxi services in the city of Bengaluru and that it was abusing its dominant position. Vide order dated 24th April 2015, the Commission directed the Director General (DG) to conduct detailed investigation into the matter. Thereafter, as stated earlier, another information based on similar facts and allegations, in Case No. 74 of 2015, against OP was received by the Commission. The Commission, vide order dated 30th September 2015, clubbed this information with the earlier case which was being investigated by the DG and directed the DG to submit investigation report covering both the Informants. During the course of investigation, the DG sought information from the parties and other radio cab companies (third parties), including Uber India Pvt. Ltd. ( Uber ), operating in the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, which is primarily engaged in providing internet and mobile technology platform for taxi hiring by commuters and is thus different from radio taxi companies operating under asset-owned model, the DG opined that taxis operating under these different business models are functionally substitutable. 10. OP also submitted, before the DG, that in Bengaluru, the radio taxis running on OP s platform compete with equally other commercial modes of transport and accordingly, the relevant market should be defined broadly to capture all such alternative modes of transport as well as they pose an effective competitive constraint on OP s taxis. The DG, however, found no merit in this contention and observed that the key features of radio taxi, viz. point-to-point pick and drop facility, ease of booking, pre-booking facility, round the clock availability even at obscure places, predictability in terms of expected waiting and journey time, reliability in terms of GPS/GPRS tracking, ease of payment, quality vehicles, professional and well trained drivers, feedback facility etc. makes them, i.e. radio taxi services, different from other modes of transport. Highlighting the distinctions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han 1-2% in 2013-14 which increased to 9-10% in the year 2014-15. However, in the first six months of 2015-16 (till September 2015), the DG noticed that while OP s market share increased from marginally by 2% to 3%, Uber s share increased at a faster rate i.e. by about 20%-22%. 13. Further, based on the monthly data (June 2012- September 2015) for point to point services, the DG observed that whereas till August 2014, Meru (one of the Informants) maintained the lead position, while from September 2014 onwards, OP took the lead position amongst other radio taxi companies. It was further noted that from March 2015 onwards, Uber has maintained the second position. The DG also noted that from January to September 2015, Uber s trip size registered growth of nearly 1200%, while OP s growth has been about 63% during the same period. 14. The DG has opined that for a player to have a dominant position in the relevant market, it should be able to hold its market share for a reasonable period of time. In the present case, OP s market share has started declining as Uber entered the relevant market almost three years after OP s entry. 15. The DG also took into acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd financial support, Uber was able to successfully counter the pricing strategy of OP, and being able to sustain losses, which restrained OP from exercising market power in the relevant market. This was evident from the fact that similar strategy was followed by Uber and as a result, the gap in market share between OP and Uber narrowed down from 69% in January 2015 to 22% by September 2015. 19. The DG also noted that in a scenario where the cab drivers have an option of getting themselves registered onto another platform and customers have an option of booking taxis from another platform, it is difficult for an incumbent to exercise market power. Thus, neither the customers nor the drivers are locked up in any manner. The DG further stated that, in the present case, competitive constraints can also be exerted by the customers/commuters in the form of countervailing buyer power, as they have an option of booking taxis from other platforms like Uber. 20. It was further noted that the potential impact of expansion of the existing competitors or entry of potential competitors is also relevant while assessing the competitive constraints on an enterprise. The DG note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulged in abuse by way of predatory pricing, only if it is found to be dominant in the relevant market. Since OP was not found to be dominant, the DG concluded that OP did not contravene the provisions of Section 4 of the Act. Replies/ objections/ submissions of the Parties to the Investigation Report Replies/ objections/ submissions of the Informants (FastTrack and Meru) 25. The Informants have filed separate responses to the investigation report and were represented by different counsels at the time of oral hearings. However, considering the similarity in their arguments, their responses are jointly summarized hereunder unless specified otherwise. The Informants have stated that though the evidence on record indicate contravention of the provisions of Section 4 of the Act by the OP, the conclusion in the investigation report has been stated otherwise. 26. The Informants have vehemently argued that the finding of the investigation report regarding (non) dominance of OP is solely based on the fact that Uber is present in the relevant market and is engaging in a similar conduct as OP. 27. The Informants have agreed with the delineat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the dip in the market share does not vitiate the fact that OP is dominant in the market. To substantiate its claim, the Informant has placed reliance on various case laws including the General Court s decision in Astra Zeneca v. Commission (Case T-321/05) and British Airways plc v. Commission (Case T-219/99) case, wherein it was noted that decline in the market share cannot be taken as an evidence that the entity is not dominant. 32. Besides OP s high market share, the Informants have also alleged high entry barriers in the relevant market. It is stated that radio taxi market is characterized by network effects which can act as an entry barrier. Since it would take considerable time for a new player to capture a good position and compete against an established player, the network effects result in high entry barriers for potential entrants. The Informants have placed reliance on international case laws where network effects were shown to be posing a significant barrier to entry viz, European Commission decision in Microsoft case (COMP/C-3/37.792) and District Court of New York s decision in MasterCard/Visa case. It is claimed that OP was the first player to build a str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrated that NSE was in a dominant position. Thereafter, zero pricing was held to be an abuse of dominant position by NSE. The Informants have also relied upon the Commission s order in M/s HT Media v. Super Cassettes Industries Limited to substantiate the same. 36. The Informants have submitted data which, as per them, shows that OP has been able to increase its market share only because of its predation strategy backed by multiple rounds of funding. The Informants have also placed reliance on the judgement passed by Competition Appellate Tribunal (COMPAT) in the case of Meru Travel Solutions Private Limited v. Competition Commission of India Others, where the COMPAT overturned the order passed by CCI under Section 26(2) of the Act. It was noted in the said judgement that the size of discounts and incentives show that there are either phenomenal efficiency improvements which are replacing existing business models with the new business models or there could be an anti-competitive stance to it. [....] . 37. With regard to the countervailing buyer power, another relevant factor to be considered under Section 19(4) of the Act, it is submitted that the larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result of any technological innovation or efficiency but the result of a practice to charge substantially below the average variable cost. The Informants have relied upon the observations of the Canadian Competition Tribunal, which noted that both MasterCard and Visa can individually possess market power in the relevant market. It has thus been submitted that a conclusion of simultaneous dominance of OP and Uber is not incompatible with the provisions of the Act. 41. The first Informant, Fast Track, has submitted that OP and Uber, through their below cost pricing, have pushed the Informant to a situation of virtual nonexistence. The second Informant, Meru, on the other hand, has claimed that established players like itself and Mega have lost market shares and are on the verge of elimination. Thus, DG s observation OP is not dominant as hat none of the players are ousted from the market has been challenged by the Informant, stating that elimination is not a necessary condition for ascertaining dominance and abuse. 42. The decision of the European Court of Justice in the case of AKZO Chemie has also been relied upon by the Informants to infer that any price b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and findings of the DG in relation to the nature of services provided by it and its pricing below Average Variable Cost (AVC). 47. OP submitted that it is only a technology software service provider engaged in providing internet and mobile technology platform for taxihailing by the commuters and the finding of the DG that it is a radio taxi service provider is fundamentally flawed and not an accurate representation of the service being provided by it. 48. OP claims to have created a software platform in the form of a mobile application i.e., a portal that can be download by commuters as well as licensed taxi drivers, on their respective mobile phones. Once the portal is downloaded, it allows the commuters to register themselves, along with allowing them a wide range of customisations such as, preferred payment method, preferred type of cab, etc. In the case of licensed drivers, the portal allows them to register themselves, after a thorough screening process involving a valid commercial driver s license, a Know Your Customer ( KYC ) complaint bank account, a car with a taxi permit, a background check on the character of the driver, etc. It is claimed that OP d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the main purpose of OP is not to provide a transport service but an intermediation service connecting drivers with commuters. Further, OP is not directly involved in the physical act of moving persons or goods from one place to another. 52. Drawing strength from the above analysis, OP argued that it is being categorized as radio taxi service provider for various purposes such as, service tax, STAs, etc., merely due to the lacuna of legislation in India for such advanced technologies and such categorization is not a fair representation of the actual services provided by it. 53. OP further submitted that it is functioning in a two-sided market that brings together two different user groups providing network benefits to each other. The peculiarity of a two-sided market is that an intermediary is engaged in the activity of connecting two different and distinct ends of the supply chain, by charging a fee or consideration for such a connection. However, the intermediary is worthless and its utility is nullified if one end of the supply chain stops using the intermediary. Thus, the pricing structure must be balanced in a way to attract both sides of the platfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nct user groups namely the taxi service provider and the commuter. Thus, its revenue is based on a revenue sharing model shared with the taxi service provider in terms of the amount of commission. It is stated that the revenue sharing between the taxi driver and OP varies between 95:5 (%) to 80:20 (%) depending upon inter alia city and car category, with OP earning positive (5% to 20% of the Gross Merchandise Value ( GMV )) revenue per ride. Since the variable cost for OP (i.e. payment to the drivers, 80% to 95%) is lower than the pricing by 20% to 5%, therefore the pricing at all times, is more than the AVC. This argument of OP was based on the proposition that customer discounts, bonus and driver incentives are not variable costs. OP claimed customer discounts, bonus and driver incentive are budgeted fixed costs and that it s low Effective Net Take Rate ( ENTR ) was not due to below cost pricing. As such, OP has not indulged in predatory pricing by pricing its services below AVC. OP also submitted that it has been subject to sufficient competitive constraint from Uber in the relevant market. 58. Based on these submissions, OP prayed that DG s finding of it not being dom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at OP acts as a platform and operates in the radio taxi service market as an aggregator. It is also well acknowledged that it does not own any of the taxis registered on its network and only acts as an intermediary. However, none of these factors supports the argument of OP that it is not part of the same relevant market as that of other players operating under the asset-owned model. By merely adopting a new business model of operation for providing the same goods/services, the incumbent cannot qualify for a distinct relevant product market. 63. While defining the relevant product market under Section 2(t) of the Act, all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use, need to be included in the realm of relevant product market. The purpose of defining the market is to encompass all those products or services which are considered to be the effective substitutes for the product or service in question, by the consumers. It is observed that OP has, undoubtedly, replaced the ownership/asset based model in the radio taxi service business a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , aggregators are included in the same category as that of radio taxi service providers. All the requirements under the said scheme are equally applicable to aggregators such as OP. Although, we are dealing with a different geographic market, it can be safely inferred that app (application) based aggregators are also covered under the category of radio taxi service providers. Similarly, the Government of Karnataka s City Taxi Service Scheme 1998 mandates that each motor cab is required to be connected with radio telephone/GPRS/GPS/company/company operated control room having facility to monitor the movements of the cabs. In view of the existence of regulatory framework in various States in India specifically stipulating the inclusion of aggregators under the category of radio taxis, it can be inferred that services provided by OP are that of radio taxis. Accordingly, the Commission finds no merit in the argument of OP that it is only a technology software service provider and not a radio taxi service provider. 66. Based on these reasons, the Commission is of the view that the relevant product market in the instant case is market for radio taxi services . 67. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 19(4) of the Act. A complete and correct assessment warrants comprehensive examination of the competitive conditions of the market, taking into account the inherent characteristics of the market, the market structure, nature of competition, competitive strategies adopted by the market participants and all such factors that strengthen or weaken the market position of the enterprise under scrutiny. Thus, the assessment of a case would be unique to its own facts and market under consideration. 72. The market in the instant case is that of radio taxi services in Bengaluru. As per the investigation report, radio taxis got introduced in the city of Bengaluru in the year 2008 when Meru launched its services. Subsequently, the market saw the entry of new players like Mega Cabs, Easy Cabs and KSTDC. All these initial players were operating under an asset-owned model, wherein either they owned the vehicles or had third party owned vehicles exclusively attached to them. The mode of booking of taxis was via telephone calls to customer care or online through the respective website of the radio taxi operator. 73. The entry of OP into the relevant market, in the year 2011, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of about 555%. Thus, though the operators under the platform-based model provided the same product/service (taxi services), the technology enabled them to expand the market at both ends (i.e. the consumer and driver base) immensely. It is against this backdrop that the market position of OP need to be evaluated. 75. The Informants, among other things, have delved into the issue of OP s market share in the relevant market and its interpretation in the context of assessment of dominance at great length. The Informants have repeatedly hammered the argument that OP held a high market share in the relevant market throughout the period of investigation and is, thus, dominant. It is also submitted that a market share of more than 50% of an entity creates a presumption of dominance. 76. Market shares have been computed by the DG in terms of fleet size, active fleet size and number of trips, based on yearly and monthly data collected from the players active in the relevant market. The DG has evaluated the yearly market shares for the years 2012-13 to 2015-16 (till September 2015) and the monthly market shares from June 2012 to September 2015. 77. Before delving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant market. However, as observed by the DG, the active fleet size of players may not give a true picture of the market shares of each player owing to the problem of double counting, thereby necessitating the requirement of another parameter for computing market shares for assessing the comparative strength of players in the market. Resultantly, a better measure, based on the data available on record, is the number of trips/rides by a taxi operator in a given period of time. 79. It is observed that in terms of annual number of trips, OP s market share increased from a miniscule 5-6% in 2012-13 to 59-60% in 2014-15 and to 61-62% in 2015-16. In terms of number of monthly trips, OP s share witnessed a rising trend from June 2012 (0-1%) to January 2015 (75- 76%) and, thereafter, a gradual decline. However, the Commission is of the view that market position/strength is a relative concept. Thus, to assess the strength of OP in terms of market share, its competitors market shares in the relevant market must also be examined in order to arrive at a meaningful conclusion. 80. The data collected by the DG indicates that Meru was the market leader in 2012-13 and 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that OP has maintained a healthy lead over its competitors and maintained its market share in spite of the competition posed by Uber. It is also averred that decline in market share is not an indication of absence of dominance. Further, the market share of OP is more than the aggregate of its next two competitors and that the dip in the market share figures would make no difference to the analysis of dominance. To substantiate these arguments, the Informants relied on the judgements of General Courts in the European Commission in cases such as Akzo case, United Brands v. Commission, Wanadoo Interactive, British Airways, Astra Zeneca, Hoffman-la Roche etc., along with orders of the Commission in HT Media v. Super Cassettes and MCX-SX. 84. It is a widely accepted view that high and durable market share can be an important indicator for lack of competitive constraints and accordingly for dominance. However, that does not imply that uniform market share thresholds and a standard time-period to assess durability of market share can be applied in the same manner to all businesses/sectors. The variance across industries in terms of their inherent characteristics, such as natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olving. While Uber s entry, as the Informant has argued, did not dislodge OP during the period of investigation, OP s declining market share post January 2015 reflects the competitive constraint posed by Uber and the fragility of leadership position in a dynamic business environment, as discussed earlier. 86. The Commission has also considered the case-laws relied upon by the Informants. However, in each of those cases relied upon, for instance United Brands v. Commission, British Airways, Michelin etc., the European Commission was more influenced by the lack of competitive constraints in the market. Notably, the competitors market shares in such cases were significantly lower than the alleged dominant entity. Rather, in some of these cases (e.g. Michelin, United Brands etc.), the dominant entities market shares were multiple times those of its competitors. Further, the AstraZeneca s case relied upon by the Informants, the European Commission was faced with the situation where high market share, which was much higher than those of its competitors, was held by AstraZeneca for many years in a row. 87. In this regard, the Commission notes that Section 19(4) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... often for control of the market by way of having a large and strong network. Aggressive competition in the early stages of network creation takes place, until the market settles in favour of a few enterprises. In such markets, market leadership position can be fragile or transient during the initial stage of evolution of the market. 91. A successful network/platform requires that at both sides the platform s network is wide and dense, i.e. larger the number of participants to both sides of the network/platform, greater the possibility of each participant having a substantial number of potential matches on the other side of the market. This allows for positive cross side network externalities that benefit the users on both sides of the market, i.e. the drivers and riders. 92. In the relevant market under scrutiny, there are certain countervailing market forces that reduce the ability of even a very large platform to insulate itself from competition. The Commission agrees with the Informants that in a two/multi-sided market, network effects have a role to play in determining the competition dynamics and relative position of strength held by market players. The tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he incumbent firms, an entrant needed to possess a significant number of cars in order to attract consumers. The new model, i.e. matching demand for and supply of rides via a platform, has obviated this requirement because a large number of individual drivers can be easily reached. Platform-based players hence find it easier to enter the market than traditional entrants given the reduced upfront costs of starting a business. Further, the entry of these enterprises does not necessarily have to split existing demand. Instead, innovative pricing and other business strategies allow them to increase demand and supply in an existing market. 96. Massive amount of capital mobilized by OP has also been pointed out as a key constraint faced by the smaller competitors or potential entrants in the relevant market. The Informant has relied upon certain case laws to argue that requirement of huge finances in this market, for funding discount/incentive schemes, act as a barrier to entry/expansion. In this regard, it is important to note that though a very high capital requirement may have been perceived as an entry barrier traditionally, in new economy sectors, the traditional concept o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have to be erroneously held dominant. To preclude possibilities of such anomalies in approach in assessing dominance, the Act lays down a holistic framework for assessing dominance and lists out the relevant factors including relative strength of competitors, entry conditions and countervailing power. Thus, the Commission is not convinced that conduct of OP, in the absence of other important factors that determine dominance, can be accepted to be indicative of dominance. 98. Besides the aforesaid arguments, the Informants have also contested DG s finding on dominance, being solely based on the entry and presence of Uber in the relevant market. It is argued that there has not been any effective entry in the relevant market post 2013, which shows the state of competitive interactions amongst the players in the market. The Commission finds these arguments are bereft of the correct understanding of basic tenets of competition law. Competition is not an end in itself; it is a means towards a greater end which presumes that competition in or for the market inter alia leads to desirable outcomes for the consumers ensuring wide variety of quality products/services at best po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.21 -79.78 22.19 32.26 Apr-14 7.32 -44.94 13.42 32.44 May-14 3.06 -46.76 26.86 32.14 Jun-14 -2.11 -57.31 18.14 38.56 Jul-14 -9.43 -52.91 14.50 39.23 Aug-14 -19.47 -51.93 12.05 35.76 Sep-14 -35.32 -45.00 14.61 47.65 Oct-14 -36.25 -50.04 19.07 28.01 Nov-14 -4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hly indexed margins has been negative from September 2013 till September 2015. On the other hand, OP was accounting for positive indexed margin from September 2013 to May 2014 followed by negative indexed margin since June 2014. 101. Two key observations can be safely made from this data: first, OP did not initiate the strategy of aggressive pricing strategy and its negative indexed margin since June 2014 seems more to be a reactive strategy to Uber s aggressive pricing. Second, the loss of Uber in the relevant market has remained substantially higher than OP s loss except for a brief period from December 2014 to January 2015. 102. Further, OP s response to the aggressive pricing strategy of Uber in the relevant market since June 2014 is indicative of the competitive constraint put by Uber to OP in the relevant market. Though the Commission has already rejected the Informant s (Fast-Track) objection with regard to the period of investigation being stretched beyond January 2015 earlier in the order, the instant observations show that even during the period up to January 2015, there were sufficient competitive constraints that affected the ability of OP to act ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to infer an interpretation which is contrary to the charging section. In doing so, the Informants have applied the rules of literal interpretation in a very narrow sense to Section 27(b) without realizing that the literal interpretation of statutory provisions have to be dispensed with if they lead to absurd interpretation. Although rule of literal interpretation suggests that words used in a statute have to be construed as per their literal meaning, there are sufficient exceptions if the same leads to absurdity or meaning which is contrary to the other provisions of the Act. In any case the use of words parties or enterprises in Section 27(b) seems to be meant for parties entering into anti-competitive agreements and not for enterprise indulging in unilateral conduct. 108. The Commission observes that there are various provisions in the Act that signify the intent of the legislature that there cannot be more than one dominant enterprise in the relevant market at a particular point of time. 109. Provisions of Section 4 of the Act clearly stipulate that dominant position can be held by only one enterprise or one group. Section 4(2) states that There shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok Sabha. Clause 4 of the said Bill states as follows: In section 4 of the principal Act, in sub-section (1), after the words or group , the words jointly or singly shall be inserted. (emphasis supplied) 115. The aforesaid proposed amendment further reinforces the proposition that there is no scope in the present scheme of the Act, either expressly or by implication, to contemplate the presence of two independent entities as dominant at the same time in the relevant market. Had there been any scope for such interpretation, this amendment would not have been required. 116. Based on the foregoing discussions, it can be concluded that the Act does not allow for more than one dominant player under Section 4. Rather the existence of two strong players in the market is indicative of competition between them, unless they have agreed not to compete, which also can be only be looked into under Section 3 of the Act, not Section 4. Hence, the present argument of the Informant regarding the collective dominance of OP and Uber is rejected herewith. 117. The in-depth analysis in the preceding paragraphs clearly demonstrates that, during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewly introduced model, it was necessary to make it attractively affordable to riders and profitable to drivers. The data on record shows that the taxi industry grew exponentially after the emergence of platform-based model (as much as 1900%) which can be attributed to the strategies adopted by the app based taxi operators. OP and Uber have, in a manner, revolutionized the taxi market by providing radio taxi services at abysmally low prices. 122. The Commission does not fully disagree with the Informants that the low prices of OP are not because of cost efficiency, but because of the funding it has received from the private equity funds. But as discussed above, there is no evidence that the access to such funding was inequitable and that the market for financing was not competitive and had aberrations. Moreover, it was their penetrative pricing strategy that facilitated them to garner high market shares in short span of time as well as develop the networks to a size that could provide sufficient positive externalities to the participants of the network. 123. At this stage, it is difficult to determine with certainty the long-term impact of this pricing strategy a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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