Domestic online cab aggregators have taken the battle against multinational rival Uber to the Centre, asking it to seek WTO intervention to stop the ‘dumping of capital’ by the US-based company. Uber, they claim, is guilty of unfair trade practices.
Home-grown Ola, the current market leader, is learnt to have informed the Centre that the dumping of capital by Uber from profits earned in foreign markets is illegal, and could wipe out the domestic industry.
“…the government understands and appreciates the (domestic) industry which is a good thing and the aspect of dumping where the market is being built or the market share is being captured by dumping money on profits from abroad,” Pranay Jivrajka, the Chief Operating Officer of Ola Cabs, told BusinessLine .
This practice, he said, is against WTO norms. “We have never seen businesses sustaining that way. It has to come to an end and none of the businesses are built this way,” he said.
Uber was yet to respond to a query by this paper on the move by domestic cab aggregators at the time of going to press.
Domestic players argue that by dumping capital, Uber had been indulging in predatory pricing. “They eventually dump capital (given the economy, given the state of affairs that we have in India) to lure drivers and attract customers at a price point which is not sustainable and are detrimental for the industry,” a former top official with Taxiforsure, which was later acquired by Ola, said.
Jivarjka said the only way out was to bring in more efficiencies into the system and sweat assets more.
However, dragging Uber to the WTO will be an uphill task as it will have to be proved beyond reasonable doubt that profits from other markets were indeed being pumped into India. It will also need sustained efforts from the agencies to petition the WTO and make a case against Uber.