The taxi industry was quite relieved about the recent prohibition of the promotional discounts granted on taxi fares. Representatives of large taxi radio circuits and taxi associations agreed this was the right decision, which protects the customer above all.
The service agency “mytaxi” is not permitted to initiate any campaigns anymore discounting the taxi fare to customers. The prohibition pronounced by the District Court Frankfurt (decision of 19 January 2016, ref. no. 3-06 O 72/15) is valid throughout Germany. Taxi Deutschland, a federation of various radio circuits in Germany, had initiated the law suit. The operators of the European app “taxi.eu” supported the proceedings financially.
The court took it as a given fact that the discounts violated both the German Passenger Transportation Act (PBefG) and the Act against Unfair Competition (UWG). The fares fixed for a taxi ride must neither be undercut nor exceeded. This also applies to mytaxi, even if they only operate as an agency. According to the court’s reasons given for the decision, preventing a cutthroat price competition in the taxi trade is the reason behind the controlled pricing. Were the regulation to be interpreted restrictively in such a manner that only the taxi companies were to be bound by the controlled price [and not the radio circuits], this purpose could virtually not be fulfilled. This would only cause the price competition to shift to the level of taxi agencies. The court gives the following reasons for the violation of the Passenger Transportation Act: “A price competition between agencies would have a direct impact on associated taxi companies, at least in the form of increased commissions and/or member contributions, […] as the taxi companies are the ones financing the agencies; the agency service itself is free of charge for the end customer. The companies would therefore be forced to finance the price competition, but would not be able to pass on the increased costs to the end customer due to the fixed taxi fare.” The consequence in accordance with the court’s opinion would be a “cutthroat, destructive competition”, which is exactly what German laws intend to prevent.
Dieter Schlenker, CEO of Taxi Deutschland eG was relieved by the court decision. “This decision is good news for consumers and for the medium-sized taxi companies and radio circuits, as mytaxi campaigns only pretend that taxi rides could be cheaper. The discount is actually subsidised by the financially sound global company Daimler. mytaxi and Daimler simply wait to skim extra profits until the medium-sized hail taxi businesses are squeezed out of the market with their thousands and thousands of jobs. Once the competition is out of business and the controlled price policy is softened, the customer can’t do anything against higher prices and lesser service.“
The Federal Taxi Association, which filed its own lawsuit last year and lost in a Hamburg court, emphasised the significance of the protection of taxi customers in its statement. “Agencies like mytaxi do not have their own vehicles; they merely make the connection between the taxi and the passenger via an app. Radio circuits, on the other hand, offer agency services via all communication channels and also ensure transport in case of special needs, such as requests for a large vehicle, patient and wheelchair transports for instance. Had mytaxi succeeded in squeezing the radio circuits out of the market by employing illegal violations of the controlled pricing policy, the customers with special needs would be first to fall by the wayside.“
Hermann Waldner dubbed the Frankfurt court decision „a good day for the German taxi industry“. That way, market participants have a level playing field. Plus, it is not quite as easy for the big investors to just buy as many customers as they wish.” Waldner, who in addition to his radio circuits in Berlin also operates the Europe-wide taxi app taxi.eu with 6,000 associated taxis, financially supported Taxi Deutschland in the lawsuit – as was the case in the successful action against UberPOP in 2015. jh
