Minimum prices for rental cars in Munich – for Alexander Mönch of FreeNow by Lyft, an 'important step against distortion of competition'

The trigger is a market that has noticeably shifted in recent years. Platform-based providers such as Uber or Bolt were able to expand their market shares, mainly through price. Fares were often well below the taxi tariff. This is precisely where the city is now stepping in. Going forward, prices in the rental-car sector should be aligned with the base price and the per-kilometer price of the taxi tariff. The introduction of the minimum price for platform-based rental cars is expected to take place soon after the Munich City Council's vote, which is now only a formality.

„Dass München im zweiten Anlauf bereit ist, Mindestpreise einzuführen, ist ein wichtiges Signal für einen fairen Wettbewerb im Gelegenheitsverkehr“, erklärt Alexander Mönch. „Nachdem das Vorhaben im vergangenen Jahr noch kurzfristig gescheitert war, zeigt sich jetzt: Der Handlungsdruck ist enorm. Am Ende geht es darum, dass ein auskömmliches und legales Geschäftsmodell auf Basis eines fairen Wettbewerbs möglich ist – das ist ganz sicher auch im Interesse der Fahrgäste.“

Konkret bedeutet das: ein reduzierter, aber klar definierter Mindestpreis – etwa 5,13 Euro Grundpreis und gestaffelte Kilometerpreise. Eine Differenz zum Taxi bleibt, der Abstand wird aber deutlich begrenzt.

Another attempt – and more pressure

That Munich is taking this step is not a knee-jerk reaction. The city is making another attempt to introduce a minimum transport fare. Previously, similar approaches had been politically shelved or legally deemed uncertain. This time the pressure seems greater. The taxi commission agreed, the city council followed suit. The taxi associations speak of a "decisive step toward fair competitive conditions".

"Extreme low prices may seem attractive in the short term, but in the long term they lead to pressure on wages and working conditions," Mönch continued. "The decision in Munich shows that more and more cities must respond to these problems: Persistent dumping prices distort competition and come at the expense of the drivers. Minimum transport fares are a necessary step to counteract this and restore more balance to the market."

The argument is well known: While taxis are bound by fare schedules and operating obligations, rental car prices have so far been flexible — and often aggressive — in how they are set. Minimum prices are intended to partially offset this asymmetry.

Between Market and Law

Other cities will watch closely how Munich proceeds. Because the legal situation is complex. Municipalities may regulate prices in the rental-car sector, but they operate within a tight framework. A look to North Rhine-Westphalia shows the pitfalls: In Essen, minimum prices were provisionally suspended after a court decision – due to unclear regulations and questions of jurisdiction. In Cologne, by contrast, the minimum prices are set as of June 1.

„Cities like Munich can urgently set important impulses, but it is also clear: In the medium term we need modern and enforceable framework conditions at the federal level,” explains Mönch. “We need reliable and up-to-date rules so that fair competitive conditions do not have to be implemented differently from city to city.”

Munich is trying to learn from this. The pricing structure is closely aligned with the existing taxi tariff, but stops short of its full transfer. It is an attempt to regulate in a legally sound manner. At the same time, there remains a certain skepticism. Minimum prices alone do not solve all structural problems. Demand behavior, platform dominance and cost developments persist. There is also discussion within the industry about whether accompanying measures are necessary – for example more flexible taxi tariffs or stronger integration into public transport.