AMCU suspects Uber, Bolt, and Uklon of collusion. Pricing under scrutiny
The Antimonopoly Committee of Ukraine has initiated a check of cab services pricing in Kyiv, as stated by the chairman of the Kyiv territorial branch of the AMCU, Aleksey Khmelnitskyy, on his Facebook page. Officials have suspected ride-hailing services, including Uber, Bolt, and Uklon, of price-fixing and taking advantage of their monopoly position in the market to increase revenues during the quarantine.
April 5 in Kyiv became the first day of another strict lockdown, which the city authorities announced earlier, on March 31. As part of the lockdown, the use of public transport was limited, and the residents of Kyiv had to use minibusses, buses, trolleybuses, and the subway only if they had special pass-tickets issued to critical infrastructure workers. Overall, around 500,000 pass-tickets were issued in the city with a population of almost 3 million people.
“And, of course, Kyiv cab services immediately took advantage of this,” says Khmelnitskyy.
Indeed, in the conditions when the use of public transport was restricted, the residents of Kyiv, who didn’t have a car, were forced to travel around the city by cab. That resulted in incredible demand and, thus, made the prices of popular services skyrocket. In some areas, for an Uber or Bolt ride from the Left Bank to the Right Bank, a tariff over UAH 1,000 (approx. $35) was fixed. Facebook users also actively discussed this phenomenon and were indignant at it.
Taras Potichny, a ride-hailing market expert, told AIN.UA why this had happened. He assured that it was not the greedy cab services that were to blame but the pricing algorithms. He also added that the market would soon stabilize. Indeed, the very next day, when the tide of interest subsided, ride-hailing service prices stabilized and returned to the pre-quarantine ones.
However, officials came in on this situation.
And what about the AMCU?
According to Khmelnitskyy, the AMCU received a lot of complaints from the residents of Kyiv about a sharp spike in prices. They were particularly indignant at Uber, Bolt, and Uklon.
“We cannot ignore so many complaints. Moreover, the situation may indicate possible violations in the actions of ride-hailing services covered by Part 3 of Article 6 of the Law of Ukraine “On the Protection of Economic Competition” (concerted anticompetitive actions of business entities) and/or Part 1 of Article 13 of the Law of Ukraine “On the Protection of Economic Competition” (abuse of a monopoly (dominant) position),” writes the chairman of the Kyiv territorial branch of the AMCU.
In this regard, the Kyiv regional territorial branch of the AMCU launched an investigation as to compliance with the legislation by the participants of the car-hailing market (as well as companies that provide services in these markets).
In the comments to this post, users note that cab prices from the mentioned companies have already returned to normal, and the sharp spike, which the AMCU regarded as a malicious attempt to capitalize on the coronavirus situation, is a completely normal reaction of the market to the phenomenal demand. However, some praised the initiative of the officials and spoke in favor of taxi price regulation by the government.
Why this is interesting: Probably, the AMCU wants to know how the algorithms of international and Ukrainian services work and to study the laws of the market economy when demand exceeds supply exponentially.