Uber & anti-trust: will we never learn?

Monday 26 March 2018

Article

Uber exited South East Asia today, "selling its operations in the region to Grab in exchange for a 27.5 per cent stake in its erstwhile local rival". This is a repeat of their strategy in China, creating local ride sharing monopolies.

It is remarkable that the anti-trust authorities don't have a problem with this: Uber and its competitors' valuations are clearly predicated on a dominant local market share, in an industry with very obvious scale benefits. These territory swaps are building towards that position, to the detriment of consumers and drivers. And leaving Uber with more firepower to defeat Lyft in the US market.

I'm sure anti-trust regulators can make their justifications, defining the market Uber plays in as the larger taxi market, or even the total mobility market. But it has close parallels with the regulators being caught asleep at the wheel when Facebook bought Instagram. The UK regulator, the OFT, back then said:

"There are several relatively strong competitors to Instagram in the supply of camera and photo editing apps, and those competitors appear at present to be a stronger constraint on Instagram than Facebook’s new app. The majority of third parties did not believe that photo apps are attractive to advertisers on a stand-alone basis, but that they are complementary to social networks."

Regulators need to sharpen up their act, not just in data, but across platform businesses.

Find out more about Nicholas Farhi, Partner