The race in the Indian taxi app business may have entered a second – and more intense – lap.
Uber, headquartered in San Francisco, has sued its main Indian competitor, Ola, for allegedly creating 93,000 fake Uber accounts, hurting Uber’s business. According to the Press Trust of India, Uber is seeking Rs 49.6 crore ($7.4 million) in damages.
Uber claims that Ola employees used bogus accounts to book and cancel more than 400,000 rides with it over the last six months. Due to this, the American taxi aggregator allegedly had to pay high cancellation charges to drivers. Around 20,000 drivers quit the platform in frustration over the fake bookings, the aggrieved company said. Ola has denied the allegation.
Ironically, Uber faced similar accusations in the past from two of its competitors in the US. In 2014, ride-hailing services Lyft and Gett had alleged that Uber employees had made bogus bookings, using up capacity. They also accused Uber of having booked rides in order to obtain the phone numbers of their drivers – and then using the information to make recruiting calls.
At the time, an Uber spokesman confirmed to TechCrunch that its employees had tried to poach Gett drivers. “Local teams can be pretty determined when spreading the word about Uber and how our platform opens up new economic opportunities for drivers,” the spokesman said.
Escalating war
The court has allowed Ola four weeks to submit a written reply with supportive documents. Then Uber will have four weeks to file its response. The case will next be heard on September 14.
Uber and Ola are the two largest ride-hailing apps in India and compete fiercely in the fast growing market.
The companies already are involved in another court case, in which Ola has accused Uber of ignoring rules to stop using diesel cabs in Delhi. Ola has suggested that Uber’s newest allegation may be connected to that dispute.
“We can only speculate that this is a counter” to the proceedings pending in the earlier case, Ola said in a statement to Quartz. “It is not beyond our imagination that this is an effort to divert attention from the current realities of the market where Uber has faced major setbacks including the recent incidents of Uber vehicles being seized by the government authorities.”
This article was first published on Quartz.
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