By Aditya Kalra and Paresh Dave
NEW DELHI/SAN FRANCISCO, Oct 11 (Reuters) - An Indian taxi company has stepped up its legal challenge against local competitor Ola and U.S. rival Uber, alleging the firms are abusing their market position, and believes that planned investments in both by Japan's SoftBank underscore its view.
The head of India's Meru Cabs said the company has filed four new complaints with the country's antitrust watchdog, claiming that Uber and Ola are abusing their dominance in four different cities by burning vast sums of investor funds to distort the market.
"Even before there is any merger or alliance between the two through global investors, there is already a unified monopoly," Meru's CEO Nilesh Sangoi said.
Though Meru lost an earlier antitrust suit versus Ola, lawyers and industry sources said that moves by SoftBank - already a major investor in Ola - to pour some $10 billion into Uber along with other investors could strengthen the local cab service's case.
Sangoi told Reuters that Uber and Ola have been altering driver incentives and passenger fares in tandem.
"Our existing cases get strengthened" with the SoftBank investment, he said, but added the Japanese firm's plans weren't cited in the latest complaints.
Ola, Uber and SoftBank declined to comment for this article. The new Meru complaints have not previously been reported.
Ola on Wednesday said it has raised $1.1 billion from investors led by China's Tencent Holdings and SoftBank.
Ola operates in over 100 Indian cities and Uber in about 30, and both firms have burnt millions of dollars to lure riders and drivers in a bid to outdo each other.
DOMINANCE TEST
Meru was the only major organized player until a few years ago and currently operates in 24 cities. But it has no direct backing of large foreign investors and it has previously filed anti-competitive cases against Uber and Ola.
In July, the CCI ruled against Meru on its allegations that Ola was abusing its dominance in Bengaluru city's taxi market. It ruled Uber too was a significant market player and there was no concept in current law to establish collective dominance of companies.
A Meru source said a SoftBank investment in both Uber and Ola may change that scenario.
Not everyone agrees, however.
Mohit Saraf, a senior partner at Indian law firm Luthra & Luthra, said while SoftBank's Uber investment would spark antitrust issues in India, the CCI would need to assess whether Uber and Ola dominate the overall taxi market which is replete with local operators of yellow-and-black coloured cabs.