Competition and Markets Authority says proposals from Transport for London would reduce choice and raise prices The competition watchdog has attacked Transport for London's proposed crackdown on Uber, warning that it could result in less choice, higher prices and a worse service.
The proposals would impose regulation that excessively and unnecessarily weakens competition
"We are concerned that some of the proposals on which TfL is consulting... would impose regulation that excessively and unnecessarily weakens competition, to the overall detriment of users of taxi and private hire services in London," the Competition and Markets Authority said.
The CMA laid into a series of regulations put forward by TfL in September, which Uber has warned could run it off the road, and that almost 200,000 people have signed a petition opposing.
The proposals include a mandatory five-minute wait between ordering a journey and it beginning, a requirement to be able to book a ride a week in advance, and an assessment of drivers' knowledge of London.
Although TfL's proposals are for all private-hire vehicle (known as minicab) operators, they are widely seen as an attempt to protect existing operators and the taxi industry from Uber. The American company allows users to order cars with a smartphone app and pay with a credit card, and its cheaper service has been embraced by Londoners since it launched in 2012, while launching widespread protests from the taxi community.
On Wednesday, the CMA attacked TfL's proposals on a point-by-point basis in an eight-page response, saying: "We are concerned that the proposed changes could lead to services of a lower quality and/or higher prices for consumers.
Any measures that restrict the choices available to consumers should be minimised
"The CMA therefore believes that TfL should take care to avoid creating or extending regulatory divergence between taxis and [private-hire vehicles], and between various types of PHV business model, as this is liable to distort competition. Above all, regulation should not favour certain groups or business models over others and any measures that restrict the choices available to consumers should be minimised."
It raised the prospect of a broader review into the current "two-tier" system of regulation of taxis and minicabs that has existed since 2001.
It also said:
TfL had not "set out the evidence base supporting why a 5-minute interval would be appropriate", and that a similar rule the French government tried to introduce had been struck down by the country's constitutional court
Proposals to require approval for operators to change business model would "reduce incentives for innovation"
Requirements to accept bookings a week in advance would "place undue burdens on some providers, leading to increased costs for PHVs and... could raise barriers to entry"
Plans to ban displaying available vehicles in an app had no evidence "that the proposal meets any genuine public interest [and] its main purpose appears to be maintaining the two-tier system"
A test of drivers' geography would be "not appropriate - particularly given that satellite navigation is widely used by PHV drivers"
The CMA concluded: "We do not think that raising the level of regulation on PHVs is likely to benefit consumers. On the contrary, we think it will harm them by reducing innovation and choice and potentially reducing opportunities for prices to be driven down.
"Given that technological innovation now allows consumers to book PHVs for near-immediate use, the CMA believes that there would be value in a broader review of whether maintaining two different tiers – including a high level of regulation on taxis – continues to serve consumers in light of recent changes to the market."
Uber has 1.2 million users in London and more than 20,000 drivers, and says it offers much-cheaper rides than black cabs. This week, it announced that a ridesharing service, UberPool, would launch on Friday, offering a 25pc discount to its current rates.
Garrett Emmerson, TfL’s chief operating officer for surface transport, said: “London has always been at the forefront of innovation and we have clearly seen a dramatic change in technology in recent years.
"We’re fully supportive of new technology and business models that widen choice for Londoners, and it is precisely why we are taking these steps to update regulations that were written in 1998. These are proposals to adapt to a very different context to when these regulations were written, and we are committed to hearing all views on the range of potential changes.”
source:
http://www.telegraph.co.uk/technology/u ... ondon.html
Login
Register
FAQ
