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LVBTM writes an urgent letter to Bavarian politics and calls for support for the industry.
The Bavarian State Association of Taxi and Rental Car Companies (LVBTM) has therefore sent an unusually forceful letter to the Bavarian State Ministry for Housing, Building and Transport as well as to the Ministry of Economic Affairs. In it, the association warns of the economic consequences of rising energy costs and calls for political measures to stabilize the trade.
Global conflicts, local consequences
The starting point of the current development is a geopolitical conflict that at first glance seems distant. The military escalation in the Middle East has set the international energy markets in motion. In particular, the Strait of Hormuz – a strait between Iran and Oman through which a significant portion of the world's oil transport passes – is in focus. Disruptions in this region regularly lead to jitters in the commodity markets.
The consequences are quickly visible in Europe. In Germany, the diesel price surpassed the two-euro-per-liter mark at the beginning of March. According to analyses by various market observers, the average price currently sits between 2.04 and 2.07 euros – with a clearly rising trend. For companies with high fuel consumption, this is more than just a statistic.
Taxi companies belong to these energy-intensive service providers. A vehicle typically covers between 50,000 and 100,000 kilometers per year, in larger cities often in multi-shift operation. Even a price increase of a few cents per liter can raise annual operating costs by several thousand euros.
A Regulated Industry
The economic burden falls on an industry whose revenues cannot be freely shaped. The taxi trade is subject to a number of binding rules under the Passenger Transport Act: tariff obligation, transport obligation, operating obligation and permit obligation. While many other mobility providers can adjust their prices flexibly, taxi tariffs are set by the municipalities. Tariff changes require time, political processes and often extensive calculations. Therefore, short-term cost increases can only be offset to a limited extent.
The association points in its letter to the special role of taxis in the transport system. Unlike many digital platform offerings, it also covers those areas where mobility is economically difficult to organize: night-time transport, rural regions, patient transport or accessible transport.
Economic pressure on businesses
The rising diesel prices are also hitting the trade in a phase of structural change. Digital platform providers and rental-car fleets have intensified competition in recent years. Especially in larger cities, taxi companies report declining revenues. At the same time, costs are rising. Vehicles have become more expensive, insurance premiums have risen, workshop prices as well. The statutory minimum wage also increases the share of personnel costs.
However, revenues remain limited. Fare adjustments do occur regularly, but rarely fully offset cost increases. Many entrepreneurs report that financial reserves had already been exhausted during earlier crises – for example during the pandemic or as a result of energy prices after the war in Ukraine.
Mobility in rural areas
In Bavaria, the problem is worsened by the geographic structure of the state. Besides large metropolitan regions, there are extensive rural areas, tourist areas, and border regions. There, taxis often take on tasks that would otherwise be covered by public transport. Taxis bring passengers to the train station, provide rides for students or patients, or replace bus connections in the evening. If a company goes under, gaps in mobility coverage quickly arise.
The association therefore warns against a creeping thinning of mobility offerings. Insolvencies or business closures could lead to there being hardly any vehicles available in some regions.
Policy demands: 'Diesel tax'
Against this backdrop, the LVBTM proposes several measures. In the short term, the association calls for a partial reimbursement of the energy tax for taxi companies. Such a model already exists in agriculture with the so-called agricultural diesel. The idea behind it: companies with particularly high driving activity could compensate a portion of their fuel costs and thus cushion short-term price spikes.
Moreover, the association proposes a crisis mechanism. Once the diesel price exceeds a certain threshold — for example two euros per liter — temporary relief could come into effect, for instance through subsidies or tax reliefs.
Integration into public transport
In addition to short-term measures, the focus also turns to structural solutions. The association advocates integrating taxi and rental-car companies more strongly into public mobility concepts.
Dial-a-bus systems, on-demand services, or supplementary public-transport taxi services that support bus and rail lines in sparsely populated regions. Such models could create additional revenue streams while ensuring mobility provision.
Fairer competition conditions are also on the agenda. Minimum carriage charges for rental cars, consistent oversight by the licensing authorities, and equal regulatory rules should prevent individual providers from gaining market shares through persistently low prices.
More E-Taxis
Long-term, the association sees another task: reducing dependence on diesel. Subsidy programs for electric taxis, investment subsidies, and the expansion of charging infrastructure could help make the industry less dependent on fossil energy sources. Some municipalities are already taking this path. In Munich, for example, the city supports switching to electric taxis with financial subsidies.
Mobility as a public service
The letter from the Bavarian association is therefore directed not only at transport policy but also at the country's economic policy. The message is: The taxi is not just a market offering, but part of the public mobility structure. When global energy crises threaten local transport options, a sector issue quickly becomes an infrastructural topic. For many regions, it will decide whether mobility remains available beyond bus and train.
The rising diesel prices show how tightly international markets and local services are interconnected. For the Bavarian taxi and rental-car industry, this connection is currently above all one thing: an economic challenge that is likely difficult to overcome without political responses.
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