The Finnish Competition and Consumer Authority (FCCA) has made an initiative to the Ministry of Transport and Communications for reform in taxi legislation. To increase competition and consumer choice, the setting of maximum numbers for taxi licences through means testing should be scrapped.
At present, the number and availability of taxis are currently regulated in many different ways. The FCAA proposes that legislation concerning taxi transport should be reformed in such a way that healthy and functioning competition might gain strength in the field.
Primarily the regulation of the maximum number of taxi licences based on means testing should be given up. However, getting into the business would still be subject to a licence. The professional competence of taxi drivers and the quality of taxi services would continue to be monitored in the future.
Principles of consumer prices for taxi services should also be re-evaluated. For instance, reforms to taxi services in Sweden have been criticised because discretionary pricing has led to a situation in which the final fare of a taxi ride ends up being unexpectedly high in some cases. From the point of view of consumer protection it is important that customers know the basis of the fare before the taxi ride begins, and that pricing should be reasonable throughout the country and in different conditions.
The FCCA also proposes changing the Taxi Transport Act in such a way that a vehicle based in any community would be allowed to stay at a taxi rank of any community to wait for a fare. Taxi entrepreneurs should also be allowed to offer their vehicles for use in competitive bidding in nearby municipalities, which would lead to greater efficiency in public acquisitions.
According to the FCCA, easing regulation of the taxi business would improve the availability of taxis, create incentives for the development of new forms of service based on entrepreneurship, and reduce prices. Through reform of regulation it would also be possible to reduce the state and municipal contribution to taxi services, which currently amounts to €400 million.
Factors behind the initiative include previous studies by the FCCA in whose connection the Authority has evaluated the impact of regulation on the operations of the taxi market. As the ways of competition in the taxi business are regulated in many ways, the Authority does not have the possibility to significantly advance healthy and functioning economic competition with the means at its disposal.
Read the initiative (in Finnish)
Competition Affairs Counsellor Seppo Reimavuo, tel. +358 29 505 3602
Director General Juhani Jokinen, tel +358 29 505 3389