Online Taxi Services Have Significantly Displaced Traditional Taxi Services from the Market: Study

The Competition Protection Commission, considering the public interest in the sector and the proposal from the Ministry of Territorial Administration and Infrastructure, has conducted a study of the electronic platform-based transportation services (online taxi) sector, examining the market for the registration, transfer, and organization of passenger transportation services using light passenger vehicles.

The study revealed that the rapid development of electronic platforms has significantly displaced traditional taxi services from the market. Of the registered 3,162 organizations, 2,787 have not conducted any activities in this sector from 2018 to 2023, while those that remain have seen a substantial drop in the taxes paid. Currently, there are no legally established mechanisms for the control and regulation of electronic platform-based transportation services regarding service quality or platform responsibility. Information regarding the main types of passenger transportation on these platforms is not fully presented. On the other hand, the privacy policies of the platforms allow for the use of user data for a rather broad range of purposes.

Concentration in the observed product market continues to grow, with the market share of the dominant operator increasing from 2021 to 2023. Recommendations include defining the term “electronic platform” also in relation to freight transportation and expanding the regulatory framework for the transportation sector to address the owner’s responsibilities for services provided through the platform, the operational mechanisms of the platform, and the regulation of interactions between drivers and taxi service companies using such platforms. In this context, creating registries for drivers and companies could be effective, helping to verify that service-providing drivers are licensed and significantly improving the quality of passenger transportation services.

Clear rules should also be established regarding both the presentation of information on the platform and the use of the information collected from consumers, which will allow consumers to make informed decisions while effectively protecting against the misuse of the information collected about them.