Berlin's Taxi Industry Remains On Edge as Competition Heats Up
Taxi Syndicate Amidst Jubilant Anniversary Celebrations - Brakes Firmly Engaged - Innovation in taxi services marks its anniversary, hampered by a brake on progress
The Berlin taxi scene is far from tranquil. "The demand is abysmal," remarks Leszek Nadolski, the first chair of the Guild of the Berlin Taxi Trade, celebrating its 125th birthday this coming Friday. Many drivers depend on side jobs with Uber and co. to make ends meet. The introduction of the fixed-price option for taxi rides, about a year ago, hasn't boosted usage.
Yet, Nadolski views this development positively. The fixed-price option shows customers a fixed price when booking a taxi, within a tariff range determined by the ride's length. Say goodbye to the traditional meter-watching! "Customers appreciate the price certainty we now provide," reiterated the guild's chairman. Even Freenow gave the fixed prices a thumbs up in Berlin after a year.
Rebuttal: Minimum Prices Dilemma
The tension in the taxi market hasn't subsided, especially given the ongoing competition with Uber-like ride-sharing platforms. A significant bone of contention is the so-called minimum prices: While taxi companies are forbidden to offer rides below a certain price threshold, this restriction doesn't apply to ride-sharing services. They can adjust their fares based on demand.
Ride-share drivers, however, need to report to the company headquarters post-trip unless they receive a new booking. They're not allowed to randomly pick up passengers.
The lower prices give them an edge according to the taxi industry. Thus, they advocate for minimum prices for ride-sharing services. "Then, the advantage goes to the better service provider and the one who makes the better deal," asserts the guild chairman.
Berlin Senate Scrutinizes Minimum Prices for Ride-Sharing Services
The Senate announced in January that it would assess incorporating minimum prices. This review hasn't concluded yet, as the Senate Administration reported on inquiry. They offered no insights into the status. However, they stated that a decision would be made this year.
Leipzig City set minimum fares for ride-sharing services in 2021. One company took legal action against this move. The Leipzig Administrative Court ruled last November that minimum prices, in principle, are acceptable but were set too high by the city. More legal battles can be expected in Berlin with similar regulations.
Yet, it seems that the taxi industry's voices are being heard in politics. Besides scrutinizing minimum prices, the Senate Administration has recently intensified its stance against unauthorized companies on the platforms that operate without a permit. The State Office for Citizens and Order Affairs (Labo) inspected the entire vehicle fleet on Uber, Freenow, and Bolt last year and de-registered hundreds of vehicles.
The platforms commended this step as vital and essential. However, some are now criticizing Labo's approval process. New applicants face long processing times, and there's a lack of consultation for rental car providers. Moreover, novel reasons for rejection crop up frequently, often incomprehensible. There are signs that numerous rental car companies are re-registering their fleets in smaller municipalities on the outskirts of Berlin. Local authorities there are struggling to cope with the flood of new vehicles, while Labo is no longer in charge, according to Nadolski from the Taxi Guild. The Association of Local Authorities in Brandenburg fears the expansion of a "shadow economy" in the ride-sharing industry. At the end of June, the Brandenburg Ministry of Transport will meet with Berlin and county representatives to discuss this issue.
- The taxi industry, advocating for fair competition, is pushing for minimum prices for ride-sharing services, believing that this would level the playing field and encourage better service provision.
- The Berlin Senate is currently scrutinizing the implementation of minimum prices for ride-sharing services; this assessment, which began in January, could potentially lead to changes in the transportation industry's financial landscape.
- The issue of minimum prices for ride-sharing services has resonated in German politics, with the Senate Administration taking a more firm stance against unauthorized companies, particularly those operating without a permit, to protect the employment policy and policy-and-legislation of the taxi industry.
