| December 29, 2019 , | |
| The Competition Protection Agency and the Prevention of Monopolistic Practices has issued a decision regarding a deal by Uber Technologies Inc. (Uber) to acquire Car-yem Inc. (Car-Yem), committing the two companies to a set of “obligations and controls” that the parties undertook before themselves to conclude the deal. These obligations and controls come in light of the competence of the agency mentioned in Article (5) of the Law on Competition Protection, and in accordance with the controls stipulated in Article (6) of the same law, and the Authority’s decision No. 26 of 2018 regarding taking temporary measures regarding the acquisition. In a manner that guarantees the availability of a competitive environment, preserving the rights of consumers, passengers and drivers, and owners of small and medium-sized companies, and enhances the opportunities for expansion for current and potential investors. The agency studied the deal and evaluated its effects on the Egyptian market, and concluded that the market concerned is the transportation market through electronic applications using special vehicles and that the obstacles to entering this market are: the absence of short-term profitability from the market, the difficulty of obtaining financing, the difficulty of attracting drivers and passengers to build Strong network, brand Loyalty loyalty, and the difficulty in obtaining the data necessary to operate in the market, which enhances the obstacles and obstacles to investment in this market. The agency found that in the absence of obligations and controls to correct the situation, completing the deal would lead to the creation of the following damages: increased prices, low service levels, few options available to the consumer, absence of innovation, and the possibility of damage extending to the relevant markets (especially the market). Transport by electronic applications using buses), and investment in general declined in this important sector. Accordingly, the parties presented a set of “obligations and controls”, and the device studied them and put them under market testing. Based on this study, the agency decided to commit the parties to the following: Regulations relating to the protection of passengers: Establishing a ceiling for the increase in the total wage (so that the rate of increase is less than in previous years) – Establishing a ceiling for the surge factor during peak times, as the rate will not exceed 2.5 times the flight price, and the trips to which this factor applies will not represent more than 30% of the total trips, while preserving the device’s right to reduce that percentage. To ensure that prices do not increase, Uber is committed to maintaining the driver’s utilization rate, to within 60-80%. Commitment to innovation and quality of service by applying the latest innovations in safety and passenger protection. Controls related to driver protection: Set a maximum service fee as it will not exceed the current fee of 22.5% for UberX services and an average 25.5% for the Car-Yemgo service. • Controls to protect the right to enter the market and encourage investment in it: – Modifying the brand of Karim in Egypt to clarify that Uber and Karim are two subsidiary entities, and this will increase transparency, and eliminate the illusion of the consumer that they are two separate companies, which increases the possibility of entering new competitors, and reduces the marketing budget of each competitor. – Enabling competitors to obtain the necessary data to work in the participatory transport market using private cars and buses through electronic applications according to objective criteria determined by Uber. These data will include: map data, flight data, information about passengers and drivers, after their approval (access to data). – Providing customers with the ability to transfer their personal data from the Uber platform to other platforms in order to improve their experience and enable the competing application to provide a high-quality service suitable for the consumer (data portability). • Market related obligations: Uber is obligated not to exclude the Uber and Kar-Yam services together. Uber is also committed to not pricing the Uber Bus and Car-Yam Bus product at a price lower than the predatory pricing, which will ensure the market growth and the survival of the existing competitors. • The supervisory mechanism for implementation – To ensure the parties’ commitment, an independent “watchdog” will be appointed to monitor Uber’s compliance with the controls and obligations (Monitoring Trustees); and any violation of these obligations and controls will enter this agreement within the scope of the ban, which will cancel the exemption gained under this decision. These obligations and controls apply for a period of two years in accordance with Article (17) of the list, which will be renewed automatically for a total period of five years or until an effective entry into the market. This will be done in cooperation with Monitoring Trustees. This comes based on the Authority’s decision No. 26 of 2018 to take temporary measures in the face of the two companies that obliges them to notify the agency before completing the acquisition |
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