The Competition Council makes a number of recommendations for alternative transport, such as notifying users of ride-sharing apps of changes in fares and changing the cancellation policy that currently puts passengers at a disadvantage. The antitrust authority recommends banning the practice of differentiated standard fares for certain time slots considered “peak” because it is non-transparent and potentially misleading passenger behaviour.

The recommendations follow the completion of a sectoral inquiry into the booking of travel.

Uber currently operates in 21 cities, while Bolt operates in 25 cities.

Tariff recommendations

The Competition Authority made a number of recommendations aimed at the transparency of tariffs and pricing algorithms. Thus, the Competition Council proposes that all users of the application, be they drivers or passengers, receive notifications through the application and other electronic means about any changes to the standard tariff – price/km.

The Competition Authority also recommends a ban on the practice of differentiated standard fares for certain time slots considered to be ‘peak’, as it is opaque and potentially misleading to passenger behaviour.

Additionally, users should have easy access to a price multiplier that balances supply and demand so they can make informed decisions. As such, the Competition Authority’s proposal does not address how dynamic pricing works, says the Council.

At the same time, the Competition Council offers customers an optional card with dynamic tariff zones, like the one used by drivers.

The Competition Authority is also proposing changes to the policy on driver cancellations. Drivers can now cancel rides for free, but passengers are charged for canceling after the first two minutes, leading to inconvenience for passengers, such as unnecessarily long wait times or not being able to find a ride under certain conditions.

Urban mobility application

Another recommendation aims to implement an urban mobility solution to improve passenger transport services as part of a strategy aimed at sustainable development, a smart city concept and an integrated urban mobility framework. It will also include a mobile application that will integrate other urban transport options in addition to taxi services and alternative transport. The app may also offer payment options for some types of government-run services.

Status of drivers

In the context of the draft Directive proposed by the European Commission, which gives platforms the implicit status of employers, the Antimonopoly Authority proposes a scheme for an alternative solution that does not change the business model specific to alternative transport services and does not inhibit the motivation of platform operators to compete in a real way.

Thus, the Competition Council proposes to start a debate on the status of active drivers in alternative transport, given that the protection of the independence of drivers is important for the proper functioning of the market.

In addition, the law should protect the independence of drivers and introduce significant penalties for platform operators and alternative transport operators for serious violations.

Regulations on taxi services

As for the taxi service segment, in general, the policy of local authorities regarding the number of issued taxi licenses has not changed, although the number of author drivers has increased. At the same time, a large number of taxi drivers have started using integrated apps (such as Free Now or Star Taxi) to offer their services.

As a result, the Competition Council believes that regulations that artificially limit the level of competition between taxi services and alternative transport services, such as public service status of taxi services, limits on the number of permits, regulated fares and the obligation of taxi drivers to cooperate with the dispatcher and pay a fee for this service.

Taxation of transnational companies

An analysis of the business models of the main platforms active on the Romanian market revealed that alternative transport operators are actually located outside the country, have a global presence, and the cost of trips is collected directly from the company outside the country (Netherlands, in the case of Uber, respectively Estonia, in the case of Bolt ), while organizations at the national level have limited powers and rights, collecting the value of some services provided to companies in the group outside the country.

In fact, even at the level of the Organization for Economic Co-operation and Development (OECD), taxation is being discussed with the aim of redistributing some of the taxing rights of multinational companies from their countries of origin to the markets where they do business and generate profits, regardless of whether the companies are physically present there . More specifically, multinational companies with global sales of more than €20 billion and margins above 10% will be covered by the new rules, and 25% of profits above the 10% threshold will be redistributed to the market jurisdictions where they were generated.

Protocol of interaction between tax authorities and platform operators

The Competition Authority believes that the mode of operation of alternative transport operators should be more clearly defined within the framework of legal acts under the conditions of transparency and legality, including from the point of view of compliance with fiscal rules.

In this regard, the Competition Council recommends the conclusion of a protocol on cooperation between tax authorities and platform operators in order to increase the control capabilities of tax authorities and, indirectly, to improve the compliance of drivers on the ground.

Trends observed at the market level

Trip ordering services emerged as an alternative to traditional taxi services, differing from them in certain characteristics: the use of a digital platform, ordering and payment methods, peer-to-peer dynamics, and a dynamic tariff set by algorithms in accordance with the market. terms, viewing system, etc.

The segment of alternative transport services is represented by two important players: Uber and Bolt, Free Now, which will leave the Romanian market from September 2022. At the end of 2021, the two companies were present in eighteen cities in Romania, covering Uber and Bolt. , at that time more than 90% of trips were made and practice close tariff levels.

In recent years, travel services have grown quarter after quarter, with a period of decline in 2020 amid the pandemic. As of 2021, the market has recovered, reaching approximately 11 million trips in the second quarter of last year, compared to 6 million trips in the second quarter of 2019 before market regulation.

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