Competition complaint ‘unlikely’ to stop Uber

TIME’S UP: Uber taxis were attacked across Johannesburg last month. The cars were damaged and drivers and passengers intimidated amid dissatisfaction by metered taxi operators METERED taxi operators are likely to fail with their complaint to the Competition Commission against digital taxi hailing platform Uber.

And the global tech company — which owns no vehicles but has contracts with drivers — is forging ahead into other services that will only increase the controversy over its operating model.

Eight regional taxi companies and members of the South African Meter Taxi Association have lodged a complaint with the commission against Uber, accusing it of predatory pricing and other anticompetitive behaviour.

Maphanga Maseko, associate in competition law at TGR Attorneys, said he was aware of only one complaint based on competition law — in India — and the case was dismissed. The complaint in India was almost identical to the one brought in South Africa.

“In order for competition authorities to decide that a player has abused its position of dominance, you need to demonstrate that the player is dominant, which Indian taxi operators were unable to do.”

In South African competition law, a player needs to have 45% of the market or more to be in a “position of dominance”.

To prove a case of predatory pricing, complainants would also have to show that the dominant player had undercut competitors for a sustained period, and then raised prices once competitors had been forced out of the market.

According to Maseko, the Indian complaint was dismissed before such a complicated and lengthy economic exercise was carried out.

“Complaining parties also need to first decide in what sector to run their case — is it for a digital platform or a taxi operator?”

Instead, Maseko said, taxi operators in some European countries have tried to defend themselves by imploring regulators to make Uber subject to the same licensing requirements as existing taxi operators.

“Uber was banned in some European countries, but the company complained against the bans to the European Commission and we expect a decision later this year or early next year,” said Maseko.

Baboo Bux, chairman of the KwaZulu-Natal division of the South African Meter Taxi Association, said local operators had done the same, delivering a memorandum to the Department of Transport on May 23. It is still awaiting a reply.

“Uber is running an illegal operation,” Bux said. “We have to comply with all sorts of bylaws, such as motor operating licences and carrier permits, vehicle tests every six months, requirements to have comprehensive insurance for a minimum of R1-million per car and driver. Uber drivers just get a car and operate.” He admitted to being outmanoeuvred by the “sophisticated” Uber taxi hailing app, and his fear now is that the department will simply “make illegal operators legal”.

“Look how many metered taxis pick up fares at the airport versus Uber drivers now,” Bux said. “Our drivers are battling to do three trips a day.

“We’re feeling the pinch, business is not like it used to be. We’re going nowhere slowly without a response from the authorities.”

Gauteng MEC for roads and transport Ismail Vadi has tried to negotiate the difficult line between protecting domestic operators and the free market.

He has said the growth of ehailing services since Uber’s arrival in South Africa in 2013 has provided customers with choice — and that until Uber appeared, the need for realtime on-demand services had not been catered for.

The department acknowledges that some people have come to rely on Uber’s services.

Vadi said South Africa was not the only country that was facing the “regulatory vacuum issues” surrounding Uber.

Gauteng has begun regulating Uber-type e-hailing services “just like other public transport providers” on advice from the national department, he said.

But there is more trouble ahead: Uber recently announced its plans to roll out its Uber Everything bouquet in Africa, which will see the app being used for any retail delivery-type trips from fast food to courier services.

These new services will allow e-commerce retailers and Uber itself to extend services without actually owning a fleet of vehicles: in developing markets this may prove to be a masterstroke in making use of vehicle owners who can deliver quickly within their local area.

Uber Everything would no doubt compete directly with South African courier companies and services such as Mr Delivery.

Uber did not respond to requests for comment.

Uber was banned in some European countries, but complained to the European Commission

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