Lyft and Uber are ruling the ridesharing market and the duopoly has reached to such an extent, they have started to follow the illegal method such as price-fixing to increase the revenues. Price fixing is basically an agreement in written or verbal form competitors that raises, lowers or stabilizes price with pre-planning. The Federal Trade Commission has declared such practices as illegal activities and Lyfy-Uber are accused of the same.
Uber & Lyft get a lot of money out of me
— Lil 🅱️ (@LilB_BarryFarms) December 17, 2019
The ridesharing market is evolving and with it, Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) are trying to collude it with price fixing. At the end of all this, customers who opt for their services are duped and the companies are making big profits. Lyft and Uber are getting close to the line of illegal price fixing and the anti-trust laws can intervene soon to stop the malpractice.
Lyft and Uber could be in Trouble Soon
Lyft CEO Logan Green in a recent interview talked about a wide range of topics surrounding the ridesharing industry and his words are a clear hint that they are getting close to illegal practices and fixing the prices in co-ordination with their competitors. The regulators can raise objections on the language used by Green as he concludes to something which is a breach of market rationalization.
Green basically said that market competition is healthy right now, and both sides are matching each other in terms of price, coupons and discounts. Uber and Lyft have kind of a duopoly in the US ride-sharing market and the two companies are playing well with each other, raising prices in a controlled manner.
Price Fixing by Promotions and Discounts
Federal Trade Commission (FTC) has made it clear that price-fixing can come in many forms and it is not just limited to the current fares. It could include coupons, discounts, promotions, incentives, subsidies for the drivers and passengers of Uber and Lyft.
@SenSanders @PeteButtigieg @AndrewYang The reason Uber and Lyft are able to drag down the rates of a rideshare is a violation of Antitrust, by way of price fixing ! It is not sustainable to pay drivers . 60 cents per mile while the cost is .85 cents per mile and market is 2.50 ! pic.twitter.com/YMNfH3rgxN
— Oscar Monroy (@oscarmonroy27) August 6, 2019
The anti-trust regulators are currently scrutinizing every tech company to check if the ridesharing companies are breaking any legal thresholds. Uber and Lyft don’t have to hold secret meetings in dark rooms, as it could be evident from an organized price increase as opposed to supply and demand imbalance.