The Occasional Traffic Act (GelverkG), which includes provisions on the requirement to hold a licence, including the scope and granting of said licence in relation to the combined trade of “Passenger transport trade with cars (taxi)”, appears to be up for another amendment.
On 18 November 2020, the Austrian Cabinet decided to amend the Act in relation to material provisions concerning mandatory use of a taximeter and a possible mandatory fare regulation. The revision is intended to remove the constraints imposed by a fare regulation that could impede the provision of innovative, digital passenger transport services under framework conditions that ensure fairness in competition.
Proposed amendments create greater flexibility with fare regulation
The draft amendment stipulates that journeys concluded by way of a communications service do not fall under the obligation to use taximeters.
Such journeys are also not to be subject to any mandatory fares prescribed by regulation. However, provincial governments are to be given the discretion to determine both minimum and maximum fares including surcharges for this type of trip. Where the provinces do not regulate such fares and charges, a statutory minimum fee of five euro is prescribed. The fare is to be agreed at the time of the order being placed, and may not be exceeded afterwards.
Fares can be split
In addition, it will be possible in future to share trips with other passengers at a reduced rate if those journeys are ordered through a communications service. Specific provisions on the minimum fare apply in this case too. The fare that is ultimately paid must be lower than that for separate trips.
“The new amendments proposed in the Federal Government’s bill appear to enable continued price and innovation competition, as long as they are appropriately phrased in the respective province’s regulations. New technology-based business models will be given the possibility of continuing to operate in the market, and consumers will continue to have several offers to choose from. We therefore welcome the proposals,” explains Theodor Thanner, Director General at AFCA.
Since the exemption from the fixed fares will apply to all journeys where passengers were not collected from the taxi rank or where they did not hail the taxi on the street, the amendments may encourage traditional taxi companies to start competing with online intermediation services.
AFCA sector inquiry into the taxi and private hire car market
In September, the Austrian Federal Competition Authority (AFCA) published the final report on its sector inquiry into the taxi and private hire car market.
The results of the inquiry showed that the planned amendment to the GelverkG would have impacted negatively on both competition and market participants:
- Innovation in the market would have been severely restricted.
- Fixed fares might have driven new business models from the market.
- Consumers would have been left with fewer options to choose from.
- Competition based on quality and price would have been eliminated as a consequence, and jobs for drivers lost.
The new amendments proposed by the Federal Government might help to maintain the advantages of both trades, and increase both the taxi and private hire car market’s potential for development.
See also: AFCA sector inquiry into the taxi and private hire car market