Competition Law Limits on Ride Sharing Enterprises - Taking into Account the Experience in India

Abstract

New economy competition policy is on the forefront of enforcers' minds across the globe, with numerous competition agencies engaged in competition advocacy efforts regarding the sharing economy generally or ride sharing specifically. In a sharing economy firm, extra-firm contracting may be as efficient as that occurring intra-firm. By reducing search and transaction costs, the sharing economy enables transactions that could not occur in a pre-internet economy. The sharing economy grew strongly in developed economies, all of which were burdened with legacy permitting systems such as taxicab medallions or zoning regulations and other oversight limiting public lodging. The promise in economies with substantial development ahead of them is much greater. However, with highly diffuse suppliers and consumers contracting through enterprises with substantial market presence, areas of competition policy concern include conspiracies, exercises of bargaining power, and productive agreements that may nonetheless limit competition and thereby require careful analysis of overall competitive effects. Finally, there is the possibility of an agreement creating both efficiencies and threatening competitive consequences, which must be evaluated holistically to appreciate its overall impacts. No clear competition law violation will exist in all cases. However, continual attention to areas of concern will be warranted for the foreseeable future.