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Competition Law

Analysis - debate - current awareness

04 JUL 2014

Taxi! 

John Cassels

Partner

Taxi! 
In London, the licensed black taxi cabs are permitted to drive in bus lanes whilst minicabs are not, except to pick up or set down pre-booked passengers. In addition, it is only the licensed black taxi cabs that are permitted to use meters in their vehicles to charge customers based on distance and time.

Both of these rights reserved to black taxi cabs are currently the subject of legal disputes.

One of the biggest private cab firms in London, Addison Lee, is pursuing a challenge to the bus lane rules. The case is currently before the UK's Court of Appeal. It has now referred to the EU's highest court the question of whether or not the rules which allow black taxi cabs but not private hire vehicles (i.e. minicabs) to drive in bus lanes, amounts to state aid. State aid, which involves a benefit being conferred on a company via state resources resulting in a distortion of competition, is unlawful under EU law. Addison Lee's position is that using the bus lane is a benefit conferred via state resources which unlawfully distorts competition in favour of the black taxi cabs. Transport for London (which administers the policy and regulates transport on London) argues that black taxi cabs are allowed to drive in bus lanes as a necessary consequence of being permitted to ply for hire in the street, which minicabs are not allowed to do.

As regards the taximeter rule, black taxi cabbies are challenging the right of Uber, the ride-sharing app, to operate in London. Round one of this dispute went in favour of Uber. Transport for London has allowed Uber to continue operating on the basis that smartphones which transmit location information between vehicles and operators have no operational or physical connection with the vehicles. Therefore, the phones were not, in Transport for London's view, taximeters. A final decision will be made in the context of court proceedings brought by the London taxi drivers' union against six Uber drivers. In the meantime, Uber can continue to operate in London. Viva consumer choice!

If you are interested in these issues, please do not hesitate to contact John Cassels at john.cassels@fieldfisher.com.
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