Ola pulling out of New Zealand: What does it mean for passenger fares and will Uber raise prices?

As Ola pulls the plug on its New Zealand operation, unions are concerned Kiwi ride-share users could end up paying more because of Uber’s “monopolistic” position in the market.

First Union claims Uber now has the power to manipulate prices and has more leverage globally including in the UK, Australia, and New Zealand. Uber maintains the market is still competitive but declined to answer specific questions relating to its market power.

The union’s strategic project coordinator Anita Rosentreter said Uber will now hold a “monopolistic position”.

“It will concentrate its market power even further which is not good either for consumers or for the drivers.”

First Union strategic coordinator Anita Rosentreter. Photo / Supplied

Rosentreter said it would have been more beneficial for the drivers to have more options as they are in a vulnerable position and it’s concerning.

Uber’s spokesperson responded, saying: “New Zealand’s point-to-point industry remains competitive, offering Kiwi passengers a range of options when it comes to getting around town.

“Uber’s focus remains on helping Uber riders get from A to B in a safe, affordable and reliable manner while providing flexible earnings opportunities to thousands of Kiwi drivers.”

In 2022, First Union helped Uber drivers win an Employment Court case that they were employees rather than contractors.

Uber is appealing that decision.

However, lawyer and competition specialist Michael Wigley disagrees with the idea of Uber having a monopoly hold in the market.

“Market for taxi-type services is not only by Uber but also by other taxi companies so they are serving the same consumers, and there are a lot of competitors.”

Wigley said Uber is in a strong position and they are well-placed with the competition in terms of size.

“This does not mean there is a monopoly going on even though Ola is pulling out of business.

“Just because one ride-share company goes doesn’t mean that the pricing is going to go up from Uber because they still feel constraint from the taxis who are competitors.”

He said consumers did not need to worry when it comes to price hikes and the regulations needed by any authority.

Uber still faces competition in its New Zealand food delivery business from the likes of DoorDash and DeliverEasy.

Paridhi Bakshi is one of 12 cadets in the Te Rito journalism programme, which has a focus on training more culturally diverse reporters to ensure newsrooms reflect Aotearoa’s multicultural society. Paridhi has a special interest in community and hard-hitting stories.