Competition watchdog dismisses plans by TfL to uber-regulate Uber

Five minute wait time not fair ... on Uber, says CMA

The UK's Competition and Markets Authority (CMA) today dismissed proposals by Transport for London to introduce new regulation to tighten its grip over private hire companies such as Uber.

Responding to proposals suggested last month by the regional transport body, the spending watchdog said TfL should take care to avoid extending regulatory divergence between taxis and private hire vehicles (PHVs).

"A number of TfL’s proposals will harm competition and, by extension, consumers. This will take the form of harm to competition between PHVs, through regulation," it said.

It questioned a number of the proposals, including the controversial "five minute wait time", which proposes operators must provide booking confirmation details to the passenger at least five minutes prior to the journey commencing.

It said the move would eliminate the advantage otherwise available to those using technology. "For example, TfL will be aware of a statement from Uber that the average wait for one of its drivers in London is 3.6 minutes. There would also be a loss for consumers if they are obliged to wait 5 minutes when they are already physically present at a [private hire vehicle] operator’s premises," it said.

The CMA also dismissed proposals by TfL to introduce a seven-day advance booking system for operators, and a mandatory landline facility.

"Given that technological innovation now allows consumers to book PHVs for near-immediate use, the CMA believes that there would be value in a broader review of whether maintaining two different tiers – including a high level of regulation on taxis – continues to serve consumers in light of recent changes to the market," it said.

However, Tory mayoral candidate Zac Goldsmith has argued there is need for greater clarity in the regulatory system" governing Uber.

In a House of Commons debate in September he argued: "Uber enjoys a significant price advantage by not paying UK corporation tax, because jobs are booked through the Netherlands. Despite Uber being a $50bn (£32bn) company, its drivers earn far less than the London living wage; in some cases, they earn a lot less than the minimum wage."

He also questioned whether the low prices offered by some apps are kept artificially low to drive out competition — a form of predatory pricing. ®

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