Uber under Pressure: Study Reveals Price Dumping in Heidelberg
The city of Heidelberg commissioned an independent report from the consulting firm Linne + Krause to assess the economic viability of rental car services on the Uber platform. The reason was Uber's repeated claim that its business model is economically sustainable without regulatory interventions such as minimum prices.
The investigation focused on real data from the largest Uber partner operation in Heidelberg. The business management metrics were disclosed by court order and formed the basis of the analysis.
Decision and formed the basis of the analysis.
Fare revenue is not sufficient for economic operation. The report concludes that operating an Uber rental car cannot be economically sustained by fare revenue alone. The analysis specifically shows that for every euro of revenue, an additional 50 cents in subsidies from Uber are necessary to cover ongoing costs. The examined operation would thus not be financially viable without the platform's support.
Higher Utilization Not a Sufficient Compensation
Another focus of the investigation was on vehicle utilization. Uber regularly argues that higher utilization of vehicles enables lower prices. The experts note that Uber's utilization is indeed above the level of the traditional taxi industry – however, only by two percentage points. This difference is not sufficient economically to justify the significantly lower fares.
Heidelberg Introduces Minimum Prices – Other Cities Consider Measures
As a consequence of the investigation results, the city of Heidelberg has decided to introduce minimum prices for rental cars. The new regulation will come into effect on August 1. Comparable measures are also being discussed in other cities, including Munich. According to the report, the economic facts leave little room: Without minimum prices, an economically viable operation under the current model is not assured.
so Michael Oppermann, Managing Director of the Federal Association of Taxi and Rental Cars."Heidelberg has drawn the consequence from these findings and decided on minimum prices for rental cars. They will come into effect on August 1. Now it's the turn of other cities, with a decision in Munich imminent. Any initial doubts about the introduction of minimum prices have now dissipated there: the facts are too overwhelming, the results of the independent experts too clear: Munich needs minimum prices."
Brief Summary of the Report "Minimum Transport Fees (MBE) according to § 51a PBefG"
Objective of the Report:
- Examination of the necessity and design of minimum transport fees (MBE) in the rental car industry.
- Basis: economic analysis, comparison Taxi/UBER, legal assessment.
Main Findings:
Price Comparison:
- UBER rides in Heidelberg are on average 35–39% cheaper than taxi rides (gross); net even up to 45%.
Economic Viability of UBER Partner Operations:
- Operation cannot be financed from fares.
- For every euro earned, Uber must subsidize about 50 cents.
- Subsidies include bonuses for "marketing services" and direct payments under a partner program.
Utilization:
- UBER vehicles have a slightly higher utilization rate of 37% than taxis (35%), which cannot explain the price difference.
Performance Equality:
- Taxis and UBER rental cars offer largely similar services in urban areas.
- UBER customers tend to be younger and more tech-savvy; taxi customers are often older or have health limitations.
Market Impacts:
- UBER fleet in Heidelberg has increased ninefold since spring 2024.
- Taxi referrals have declined sharply; falling back to Corona crisis levels.
- The functionality of the taxi infrastructure (e.g., taxi centers) is endangered.
Legal Situation:
- VG Leipzig and other legal reports affirm the possibility and necessity of an MBE if the public transport interest is at risk.
- MBE must not be arbitrarily set but must be based on a business analysis.
Illegal Practices & Gray Economy:
- Without subsidies, the business model is not legally viable.
- Documented undeclared work and return duty violations in other cities.
- Heidelberg UBER vehicles frequently start shifts outside the company headquarters.
Recommendation:
- Introduction of an MBE to ensure basic services and prevent ruinous competition in occasional transport.
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