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Signal effect for cities: Leipzig ruling strengthens minimum prices in the ride-hailing sector
The decision is expected to have a signaling effect, as Berlin and Munich, among others, are currently preparing to introduce minimum prices for ride services.
"The court's ruling could not have been clearer. The court makes it clear: Minimum prices are permissible and the protection of the taxi industry as part of the public transportation system is a legitimate protective purpose of such a measure. This ruling encourages all cities that are currently working specifically on the introduction of such regulations: They are on the right path," comments Herwig Kollar, President of the Federal Association of Taxi and Rental Cars.
The court describes the existence and functionality of taxi services as an "exceptionally important communal asset worthy of protection" and makes it clear that ride services like Uber cannot assume this role. According to the ruling from Leipzig, it is also not necessary to first make taxi fares more flexible; instead, cities can directly introduce minimum prices for rental cars to protect the function of taxis as a part of the public transport system.
Cities need to take action
The Federal Association of Taxi and Rental Cars sees its view confirmed by the court ruling that cities need to take action. The competition between taxis and rental cars must not be distorted by dumping prices, which the legislator had also made clear with the amendment. Many press releases about the rental car platforms have clearly shown that the fares set by the platforms are not cost-covering for the affiliated companies. In Berlin, it was determined by the authorities that large parts of the rental car traffic belong to the realm of organized crime.
In Frankfurt, numerous Uber operators are on strike and are demanding fair compensation from the platform so that they can meet legal obligations (e.g., minimum wage and social contributions).
"The court expressly established that cities – like Leipzig – can act preventively," said Kollar. "They do not have to wait until there is no functioning taxi industry but can take precautions now. With the judgment in their favor, there is nothing holding them back. We urge all cities where taxi-like services such as Uber & Co are active to act quickly and decisively."
Minimum price in Leipzig deemed too high
The basis for introducing the minimum prices for rental cars is the amendment to the Passenger Transport Act in 2021. Leipzig was the first major city to make use of this option. The minimum prices were set such that a ride in the ride service costs three times the price of a public transport ticket plus two euros per kilometer. This resulted in the minimum price being in some cases significantly above the taxi tariff, especially for short distances. The court criticized this level in its ruling. Accordingly, the city should have oriented itself on the taxi tariff.
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