NEW DELHI — Aiming to wrest control of India’s booming taxi market, two cab-hailing smartphone apps, Uber and Ola Cabs, are promising hundreds of millions of dollars in new investment while also facing off with one another in court.

San Francisco-based Uber reportedly plans to invest $500 million in new funds, apart from the $1 billion already committed over the past nine months, according to Indian newspapers. The company declined to comment on those reports. Meanwhile, Ola promises to add 2,000 cars to the fleet of 26,000 it already commands in New Delhi, chief spokesman Anand Subramanian said.

But it’s the ongoing legal wrangles between the two with each accusing the other of behaving unethically that have drawn the focus to the struggle for India’s $9 billion taxi industry and future growth possibilities in a country with an urban population of 400 million people but few options for safe, convenient public transportation.

In March, Uber filed a lawsuit against Ola, accusing its Bangalore-based rival of hijacking its business by creating fake accounts to make bookings with Uber that it then canceled. Ola denied the allegations, calling them ludicrous and suggesting they were a smoke screen to hide Uber’s own troubles. Ola previously challenged Uber in court over what it said were illegal business practices.

Analysts say the court battles show that competition for market dominance is becoming fierce.

“It’s a tussle to capture the top spot among taxi-hailing apps and the title of No. 1,” said Jaspal Singh, founder of Valoriser Consultants, specializing in the analysis of the transportation industry.

Smartphone taxi apps, introduced in India in 2010, have grown to account for 10 percent of the country’s overall taxi industry, which also includes regular cabs and three-wheeler rickshaws.

Ola has already bought out the upstart TaxiForSure, and both Uber and Ola offer rates below those of traditional taxis. Meanwhile, they are quickly adding new cities and customers, including car drivers that are increasingly fed up with traffic gridlock and difficulty finding parking on India’s overcrowded roads.

So far Ola has been dominating the smartphone app market, with a presence in more than 100 cities and roughly half of the business, analysts say. Uber, which entered the Indian market in 2013, operates in 29 Indian cities and is anxious to expand, while a myriad of small players are clawing their way in.

In the latest legal action between the two, filed in the Delhi High Court, Uber demanded an injunction against Ola and $7.4 million in damages. It accuses Ola, backed by Japan’s SoftBank Group Corp. and hedge fund Tiger Global Management LLC, of creating more than 90,000 fake accounts to book around 400,000 rides and then cancel them in an effort to disrupt Uber’s business.

The allegations are similar to those faced by Uber itself in the U.S. in 2014, where San Francisco-based Lyft accused Uber of booking and canceling thousands of rides. Uber denied the accusations, and no legal action was filed.

The Delhi High Court will hold its next hearing in September on Uber’s lawsuit, which Ola called “frivolous and false.”

Ola said in a statement it was “not beyond our imagination that this is an effort to divert attention from the current realities of the market where Uber has faced major setbacks.”

Specifically, those setbacks include a legal petition filed by Ola in October, accusing Uber of flouting a Supreme Court order demanding app-based taxis in New Delhi to switch from running on diesel to using compressed natural gas. The companies were given until March to comply with the rules, intended to curb extreme air pollution in the capital. Ola’s parent company, ANI Technologies LTD, has alleged that Uber’s lawsuit is retaliation against Ola’s petition.

Uber had earlier troubles in India as well. It was accused of failing to properly screen its drivers in 2014 after one was accused of raping a 26-year-old passenger. Uber’s reputation temporarily took a hit, and the government briefly banned all smartphone app taxi services while new regulations were being drafted.

The current wrangling over ethics and legal threats is not limited to Uber and Ola.

Rickshaw booking app Jugnoo, which operates in the north Indian city of Chandigarh, accused Ola of using “unethical practices to sabotage its business” by making fake bookings, and it warned of legal action if it did not cease.

Jugnoo CEO Samar Singla said his company saw a sudden surge in bookings and cancellations, with about 20,000 cancellations made through 800 accounts over a 10-day period in March.

“We started mapping the areas where the bookings were being made from, and it invariably pointed to places close to Ola’s office,” Singla said in a statement.

Jaspal Singh said Uber and Ola were honing their strategies and boosting services to secure market dominance as the country experiments with transportation limits aimed at curbing air pollution.

On April 15, New Delhi will ban cars with odd- or even-numbered license plates from the roads on alternate days for two weeks. The capital’s first such effort in January helped lessen air pollution and traffic.

Residents say they will be relying on cab companies to travel in the city during those weeks.

“Last time I just ordered a cab from my phone. For me it doesn’t matter if it’s Ola or Uber,” said Rashmi Singh, an advertising executive. “It’s so convenient I could park my car in the garage permanently.”

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.