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Competition Board, new rules for Bolt and Uber, passenger services, but also taxis. What is the institution proposing?

The Competition Council is proposing to impose standards and regulations to protect consumers from potential problems that may arise in the context of the use of alternative transportation services mediated by digital platforms (“horse rides”), according to a statement from the organization.

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“Tariff transparency, pricing algorithms, urban mobility solutions, and launching a framework for debate on driver autonomy are key issues that the Competition Council has analyzed in a sectoral investigation into alternative passenger transportation.

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Since the final race fare consists of two components, the standard fare and the dynamic component (a multiplier determined by several factors), the Competition Council recommends that all users of the App (both drivers and passengers) are notified via the App and other electronic means regarding any change in the (standard) fare – the price / how much.

Also, the practice of differentiated standard fares at certain time periods that are considered “peak” may be opaque and may be misleading passenger behaviour. As a result, the competition authority recommends prohibiting this type of behavior, since the tariff multiplier (which reflects the dynamic nature of tariffs) effectively and transparently reflects the tariff variance in accordance with the existing conditions at a particular time.

Regarding the way the fare is displayed in the app, passengers should be able to access some basic information, which will allow them to make informed decisions (such as the level of the fare multiplier),” the statement read.

At the same time, the Competition Council proposes to provide customers with an interface (main or optional) with marking of dynamic tariff zones, such as those offered to drivers.

Another recommendation refers to a policy change regarding the cancellation of races by drivers, at the moment there is an inconsistency in the treatment of platform operators towards drivers, respectively. Thus, drivers can cancel trips for free, compared to passengers sentenced to cancel. This can lead to uncomfortable situations for passengers (eg unjustified increase in waiting time, inability to find a flight under certain conditions, etc.), says the organization.

In order to improve passenger transportation services, the Competition Authority recommends the implementation of an urban mobility solution (including a mobile application), which, in addition to taxi transportation and alternative transportation services, integrates other urban transportation options. The application can also provide payment options for some types of services managed directly / indirectly by the authorities (eg surface public transport, underground transport and even rail transport – at the national level). Implementation of such an application requires a standardized approach at the national level,” says the Competition Council.

“In the context of the trend of more and more European countries to regulate the status of drivers as employees, the competition authority is proposing to choose a solution that does not change the business model of alternative transport services and does not prevent platform operators from being motivated to truly compete.

Thus, the Competition Council proposes to launch a framework for discussion on the status of active drivers in alternative transport, given that protecting the autonomy of drivers is essential for the proper functioning of the market”, says the Foundation.

Restrictions on taxi drivers’ licenses should be lifted

With regard to the taxi services sector, in general, the policy of local authorities on the number of issued taxi licenses has not changed, despite the increase in the number of taxi drivers. At the same time, a large number of taxi drivers began to use integrative applications (such as Free Now or Star Taxi) to provide their services.

As a result, the Competition Board recommends a reassessment of maintaining regulations that artificially limit the level of competition between taxis and alternative transportation services, such as the state of the public service for taxi services, limiting the number of permits, regulated tariffs and the obligation of taxi drivers to cooperate with the dispatcher and pay a fee This service.

From the analysis of the business models of the main active platforms in the Romanian market, it was found that all alternative transport operators are located, in fact, outside the country, with a global presence. In the case of Uber and Bolt, the value of travel is collected directly by companies outside the country (Netherlands, in the case of Uber, respectively Estonia, in the case of Bolt), while national entities have limited powers and rights, collecting the value of services (for example for services Marketing) provided to a group of companies outside the country.

As a result, the competition authority considers that the mode of operation of alternative transport operators needs to be better defined in the regulations, in terms of transparency and legality (including compliance with tax rules).

The alternative transport sector covers three major players: Uber, Bolt and FreeNow, in eighteen cities in Romania, and Uber and Bolt cover more than 90% of trips and train at comparable price levels.

In recent years, passenger services have risen from quarter to quarter, with a period of decline in 2020 amid the pandemic. Starting in 2021, the market has recovered, reaching nearly 11 million races conducted in the second quarter of last year, compared to 6 million races in the second quarter of 2019, prior to market regulation.

Source: Economica.net

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