Uber-Ola battle might usher in transparency

Uber has been accused of gaming its rivals in the US by booking bogus cab rides to make it difficult for genuine users to hail taxis. In India, the Silicon Valley taxi-hailing app has sued its local rival Ola for doing the same.

Uber’s rivals such as Lyft and Gett had in 2014 complained against the giant aggregator of making false bookings and also using the generated driver information to recruit them for its own service.

On Tuesday, Uber accused Ola of making over 400,000 bogus bookings on its platform, forcing over 20,000 drivers to quit its ecosystem. It has sought damages of nearly Rs 50 crore from the Softbank-backed company.

Ola has disputed the claim. But this is not the first time the Bengaluru-based taxi-hailing app has been accused of foul play. In December, Jugnoo, an auto-rickshaw aggregator funded by Paytm, had accused Ola of poaching employees and lifting its employee and driver database in Chandigarh. This was just ahead of its launch of a similar auto service in the city. Ola had declined to comment on the issue.

At heart of this fight is the heated rivalry between Uber and Ola, which have been massively funded by global venture capital firms. Eyeing the lack of adequate public transport in Indian cities, both companies have pledged to invest a combined $2.25 billion, or Rs 15,000 crore, hoping to add millions of cabs on Indian roads.

Both Ola and Uber model follow a business model that has space for a sole winner in order to make money. In the US, Uber is miles ahead of its rivals such as Alibaba-backed Lyft and Gett. Sidecar, a smaller rival, shut shop last year saying it could not compete with the brute spending power that Uber brought to the table.

Neither firm is transparent on user base, the number of rides or revenue. They have so far tried to win over the Indian market by throwing cash, engaging in a battle of words and now have resorted to fighting in court. Maybe the court battle will force the rivals to disclose the true size of their businesses in India.

Uber is the world’s most valuable privately-held company at an estimated $ 62.5 billion. Ola, on the other hand, is valued at $ 5 billion. Uber recently claimed that it would be ahead of Ola by April, whereas Ola countered saying its newest category Micro in three weeks of operations had scaled to 50 per cent of Uber’s business in India. Ola says it has over 350,000 drivers across 102 cities on its platform, while Uber claims 250,000 drivers on its service.