Ola, Uber under the Competition Commission lens over surge pricing

The Competition Commission of India (CCI) has begun a probe into cab aggregators Ola and Uber over surge pricing, according to a report published in Business Standard.

The report said that these operators introduced surge pricing to regulate the prices of trips to match driver supply with rider demand at any given time.

Ministry of Corporate Affairs would carry out a study on surge pricing in the cab aggregator industry, an official from the ministry told the financial daily.

An official privy to the information said the government’s reasoning is that the sector has serious competition issues and these firms might abuse their dominant position.

Other cab aggregators have filed cases with the competition watchdog saying that the two firms in the space are twisting the market.

A four-member panel headed by former bureaucrat BC Khatua formed by Maharashtra government recommended in its report that basic fare between 8.1 km and 12 km be reduced by 15 percent, distance beyond 12 km be reduced by 20 percent. The committee also suggested setting up the floor and ceiling prices.