THE MARKET OF TAXI AGGREGATORS IS IN THE FOCUS OF THE INTERESTS OF INTERNATIONAL COMMUNITY

The market in Russia grows by more than 100% a year. It is expected that the growth will maintain through use of smartphones by consumers and the penetration level of cellular communications services in the UMTS and LTE standards

OECD Competition Committee and its Working Groups were in session on 4 - 8 June 2018 in Paris (France). Russia was represented by Deputy Head of FAS Andrey Tsyganov and Head of FAS Department for Regulating Communications and Information Technologies, Elena Zaeva.

On 4 June 2018 No. 2 Working Group on Competition and Regulation organized a Round Table regarding “Services of taxi and intermediaries in taxi transportation sector (aggregators)”.

The Round Table discussed the main challenges facing competition authorities regulating taxi and taxi aggregators’ services, including protectionist regulations that prevent market entry of innovative players to many local markets. Competition authorities succeeded to a different extent countering those restrictions through advocacy. Now debates focus on antimonopoly regulation of the new firms, reforms of normative requirements to traditional taxi (so they can compete with new players) and future business-models that can challenge the incumbents.

Elena Zaeva pointed out that investigating the Yandex.Taxi and Uber merger, FAS established that the market of taxi aggregators in Russia is quite young and is experiencing considerable changes and modernization. Elena Zaeva emphasized that analyzing the market, FAS defined aggregators not as taxi carriers but as dispatch services that use platforms to offer additional quality to consumers – geographic positioning, optimal routing and shortened waiting time.

“The market is at the stage of explosive growth – more than 100% per year, market entry barriers are low, consumers easily switch to parallel services gaining significant benefits”, added Elena Zaeva.

She specially underlined that FAS endeavors to maintain competitive conditions further and considers it necessary to issue an order to the parties to the merger. The order conditions were devised in view of the market specifics to maintain switching options for passengers and drivers, so the companies were required to ban any restrictions on both group of users for selecting and using the services of third-party aggregators.

“Issuing an order designed to maintain conditions for developing competition on the market, FAS believed that it will be perceived by all market players and become the “conduct rules” for all of them. Now, however, we see actions of particular entities that restrict a choice of the services of third-party aggregators for carriers, which, in our opinion, has signs of beaching the competition protection law”, reported Elena Zaeva.

Head of the Russian delegation, Deputy Head of FAS Andrey Tsyganov emphasized: “The Round Table discussion showed that in its actions and decisions FAS sticks to the most reasonable approaches in terms of protecting competition and finding the balance of interests between all market participants. Defining aggregators as a separate market, an in-depth analysis and entry barriers and switching prices, orientation towards non-discriminatory regulation and freedom of market entry – all this constitutes the developing “best practices” in this field”.

An Uber representative took an example of the US to illustrate the consequences for the modern transportation market in the conditions of local regulation.

Representatives of 25 countries, including Russia, Italy, Costa-Rica, Turkey, Finland, Estonia, Canada, the USA, Mexico and Bulgaria took part in the Round Table. The Working Group heard submissions from Uber, a licensing body – New York Taxi and Limousine Commission, and renowned international experts – Profs. D. Girardin and M. Huffman.

Reference:

At the June session of OECD Competition Committee and its Working Groups FAS submitted reports on Russian experience of regulating taxi and taxi aggregator services, leniency issues, the impact of e-commerce on competition policy and non-price consequences of mergers.

OECD is also discussing monitoring of applying the Recommendation on the issues of countering hard-core cartels, market concentration in the digital economy, drafting and testing injunctions by the antimonopoly bodies aimed to satisfy consumer needs.