Commission puts Uber under microscope
SA’s Competition Commission still has to decide if ride-hailing service Uber has contravened the Competition Act.
|||Johannesburg - The Competition Commission still has to decide if Uber, the technology company that connects passengers with professional drivers, has contravened the Competition Act.
This follows the SA Meter Taxi Association lodging a complaint with the commission on November 27, alleging Uber was engaged in predatory pricing and other anti-competitive practices. Predatory pricing involves setting prices below cost in an attempt to eliminate competition.
Itumeleng Lesofe, a spokesman for the commission, confirmed on Friday that the complaint was still under investigation and the commission was still determining whether or not there had been a contravention of the Competition Act, as alleged. “At this stage, we cannot determine when this investigation will be completed,” he said.
Attempts to obtain comment from Uber were unsuccessful. However, Uber was previously reported as stressing that it did not own any vehicles, but licensed technology to transport operators who could then connect with people wanting a ride.
There have been clashes between Uber drivers and taxi operators from the metered taxi industry, who claim Uber is crippling the industry.
Uber in April cut the fares for UberX, its lowest cost option for rides, by up to 20 percent in Johannesburg, Pretoria, Cape Town and Durban in an attempt to boost demand during the quieter winter period. However, Uber last week did a U-turn and raised its South African fares back to their old rates.
Dikeledi Magadzi, the chairwoman of the Parliamentary portfolio committee on transport, last week voiced her concern on the conflicts involving Uber-affiliated drivers and that the conflicts needed to be resolved before lives were lost.
In a reference to claims that Uber was receiving preferential treatment and was engaging in anti-competitive practices, Magadzi said the law enforcement authorities should enforce the law consistently without preference.
Allegations
TGR Attorneys’ associate in competition law Maphanga Maseko and candidate attorney Crystal Davids said last week that the allegations made against Uber might prove to be more complex than anticipated by the complainants.
Maseko said that for the allegation of predatory pricing to be sustained, the complainants had to provide evidence of actual harm to consumer welfare or prove the exclusionary act was substantial or significant in terms of foreclosing the market to its rivals.
Davids said proving the allegation against Uber was likely to be a tall order for the complainants because they first had to identify the geographic and product market in which the alleged contravention took place and prove that Uber was the dominant firm in the relevant market identified before even engaging the merits of the predatory pricing argument.
Maseko said if the complainants were not successful in identifying the geographic and product market concerned, this should be the end of the matter when one regards case law. “Even if the commission refers the matter to the Competition Tribunal for adjudication, by their nature pricing abuses such as predatory pricing are difficult to prove and may take a long time to conclude, before a determination is made by the tribunal,” he said.
“It is early days in the matter but we hope the commission expedites the investigation before there is more violence between the Uber drivers and the complainants and the law enforcement authorities will ensure that the rule of law is maintained, regardless of the findings of the commission and/or tribunal,” he said.
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