Car rental minimum prices suspended: BVPB demands more flexible rules for taxis and rental cars.

The Administrative Court of Munich has provisionally suspended the minimum prices for app-dispatched rental cars introduced by the state capital. The court granted five urgent applications from affected companies. According to its preliminary assessment, the city exceeded its authority when introducing the price guidelines. The Federal Association of Passenger Transport (BVPB) welcomes the decision and calls for a fundamental reconsideration of municipal minimum-price regulations. Instead of additional price guidelines, the association advocates modernizing the passenger transport law.

Court finds the city's jurisdiction exceeded

The Administrative Court's decision primarily concerns the legal jurisdiction of the state capital Munich. According to the BVPB, the decisive factor for the provisional suspension of the minimum prices was the court's assessment that the municipality had exceeded its powers. A final legal assessment of the economic effects of such price regulations is therefore not involved. However, the association uses the decision as an occasion to question the regulation of competition between taxi and rental-car companies in principle.

From the standpoint of the BVPB, additional minimum prices could lead to rides for customers becoming more expensive and demand decreasing. As a result, particularly smaller rental-car companies could come under economic pressure.

Bolt reports 44 percent lower demand

What effects the Munich minimum prices had on ride prices is illustrated by figures from the mobility provider Bolt. According to the company, the price for a ride from Munich Central Station to the airport rose from 39 to 106 euros. On the route between Theresienwiese and Olympiapark, the fare increased from 12.50 to 26.20 euros.

In addition to the price increases, Bolt reported a pronounced decline in demand. In the first month after the introduction of the minimum prices, demand fell by 44 percent, according to the company. Around 40,000 rides did not take place in this period. The figures come from Bolt and refer to the effects of the Munich price regulation as reported by the provider. The statement does not include independent verification or information on demand development on other booking platforms.

Weniger Fahrten können Betriebskosten stärker belasten

The BVPB sees declining demand as an economic risk for rental car companies. With fewer bookings, the number of trips a vehicle can complete within an hour of operation falls. At the same time, essential fixed costs remain. These include, in particular, expenditures for vehicles, insurance and personnel. According to the association, revenues per operating hour can therefore decline despite higher prices for individual trips.

Particularly smaller rental car businesses could be economically burdened by such a development. The BVPB warns that additional minimum price limits could endanger the economic existence of individual companies. The association therefore rejects minimum prices as an instrument to regulate competition between taxi- and rental-car companies.

Verband fordert stärkere Kontrollen statt Preisvorgaben

In the opinion of the BVPB, political measures should focus more on compliance with existing regulations. This includes, in particular, permit requirements as well as labor law provisions. Companies that violate applicable regulations should be consistently monitored according to the association's proposals. In addition, the BVPB calls for transparent offers as well as binding quality and safety standards for passenger transport.

The association, on the other hand, does not consider additional minimum prices suitable to level the different competitive conditions between taxi and rental-car companies.

More leeway in taxi fares demanded

In addition to waiving additional minimum prices for app-dispatched rental-car rides, the BVPB advocates more flexible tariff models in the taxi trade. In particular for pre-booked rides, taxi companies should have more opportunities to respond to different customer needs, according to the association's proposals. The BVPB cites flexible fixed prices and tariff corridors as possible instruments. Such models could offer passengers greater price certainty, according to the association, while also creating additional economic opportunities for taxi companies. The BVPB sees this as an approach to further develop the competitive conditions of both modes of transport without restricting competition through additional price floors.

Reform of the Passenger Transport Act urged

The national association urges the legislature to modernize the Passenger Transport Act. The goal is practicable framework conditions under which taxi and rental-car companies can operate economically. According to the association's proposals, fair competition, transparent offers and binding standards should be at the center.

At the same time, the BVPB appeals to the federal government, states and municipalities to take greater account of the economic consequences of existing and planned minimum-price regulations.

While the Munich court ruling initially concerns the question of municipal jurisdiction, the association furthermore sees a fundamental reform need in the regulation of the taxi and rental-car market. (Source: Federal Association of Passenger Transport)