Disruptive innovations and their effect on competition law

Abstract

The metered taxi industry has over the years been regulated and controlled by various transport legislation and transport authorities, however because of the nature of the Uber business model, competition laws have been unable to regulate fair competition between Uber, taxi app’s such as Uber (like Taxify) and the traditional metered taxi industry. This dissertation focuses on Uber as a disruptive innovation in the public passenger transport industry. It explores the Uber business model of the online app and explains whether, if at all, Uber does qualify as a disruptive innovation and if so, to what extent does it pose a threat to its competitors in respect of competition issues such as price fixing, predatory pricing, vertical and horizontal agreements and abuse of dominance. In this dissertation I note the importance that regulators and the competition authorities play in venturing out of their comfort zones and re-examine their assumptions underpinning existing competition regulations in respect of new entrants in the market. The dissertation explores whether Uber has in fact operated outside of the competition regulations and whether its existence should be regulated. Moreover, this dissertation explores whether Uber as a disruptive innovation is potentially limiting on competing brands, such as the metered taxi industry and whether the existence of Uber and operation outside of normal competition legislation may cause the foreclosure and exclusion of competitors and therefore substantially limiting or lessening competition in the public passenger transport market. Lastly the dissertation explores how other jurisdictions have regulated any of Uber’s potential competition law infringements. The focus is based on the European Union and the United States of America jurisdictions.