Berlin Taxi vs Rental Car Tariff Battle: A Rocky Ride
Celebrating a Century and a Half, yet Still in the Red
Cab union commemorates anniversary - Under imposed parking brake operation - Taxi modernization marks its anniversary, halted by the application of the parking brake
The Berlin taxi industry has been at a standstill for some time now. "Bookings are scarce," admits Leszek Nadolski, the First Chairman of the Guild of the Berlin Taxi Trade, who is marking 125 years in the business this coming Friday. Many drivers continue to rely on side hustles — working on Uber and other similar platforms — to make ends meet. Even the introduction of a fixed-price option for taxi rides about a year ago hasn't moved the needle.
Despite the struggle, Nadolski finds the fixed-price option to be beneficial. With the fixed-price option, passengers receive a set price that fluctuates within a price corridor based on the journey's length, eliminating the anxiety caused by a constantly rising in-cab meter. "Customers appreciate the established pricing," stresses Nadolski. In fact, even ride broker Freenow recently commended the fixed pricing model they've used in Berlin for the past year.
The Menace of Minimum Prices: A Catch-22
However, the taxi industry remains under pressure. The fierce competition with ride-sharing platforms like Uber and Bolt persists, with the central issue being the minimum prices controversy. While taxi companies are restricted from offering rides below a certain price floor, this regulation does not apply to ride-sharing services. These companies can adjust their fares according to demand.
This flexibility in pricing gives ride-sharing drivers an advantageous position, as they are only required to return to the company headquarters after each ride unless a new booking comes in. Taxi drivers, on the other hand, are struggling due to what they see as an unfair price war. The taxi industry continues to advocate for minimum price regulations for ride-sharing services. "By leveling the playing field, we can celebrate success based on service quality," explains Nadolski.
Berlin Senate's Uneasy Decision: To Regulate or Not to Regulate?
The Berlin Senate announced in January that it would examine the prospect of implementing minimum prices, but a decision has not yet been reached. As of now, the Senate Administration is mum on the matter's status. However, they did confirm that a verdict would be reached this year. The city of Leipzig already imposed minimum tariffs for ride-sharing services in 2021, eventually facing a lawsuit. The Administrative Court of Leipzig ruled that minimum prices could be imposed but felt the rate set by the city was too high.
The Ugly Side of Approval Processes: Accusations and Loopholes
As the issue of minimum prices lingers, the taxi industry seems to be winning some small battles in other arenas. The Senate Administration recently strengthened its stance against illegal companies operating without permits on platforms. The State Office for Citizens' and Public Order (Labo) inspected the entire vehicle fleet on platforms like Uber, Freenow, and Bolt last year and removed hundreds of unlicensed vehicles.
However, some platforms are now questioning the approval process of the Labo. They claim the process takes too long, and there is a lack of consultation for the car rental providers. Additionally, new reasons for rejection are often unclear. It appears that many car rental companies are registering their fleets in smaller townships surrounding Berlin, making it difficult for local authorities to handle the influx of new vehicles while the Labo is no longer responsible. This may lead to the expansion of an unregulated "shadow economy" in the car rental industry, according to the Brandenburg County Council.
By the end of June, the Brandenburg Ministry of Transport plans to discuss this issue with Berlin and representatives from the counties. In the meantime, the struggle for survival rages on in the heart of Berlin's bustling streets, as the taxi and ride-sharing industries prepare for an uncertain future.
- The Berlin taxi industry, entrenched in a century and a half of service, is advocating for a leveling of the playing field by proposing minimum price regulations for ride-sharing services, such as Uber and Bolt, as they perceive an unfair price war against these competitors who can adjust fares based on demand.
- The finance, transportation, and automotive industries are intertwined in Berlin's ongoing tariff battle, with the industry and taxi policy at the forefront, as the city grapples with the question of whether to regulate minimum prices for ride-sharing services, a decision that could impact the employment policy and economic stability of both the traditional taxi sector and the ride-sharing sector.
