Amendment to Passenger Transport Act in Germany
On 26 March 2021, the German Bundestag passed the controversial amendment to the Passenger Transport Act. The amendment for the first time provides an explicit legal framework that allows digital passenger transport service providers, such as Uber or Free Now, to operate in cities and rural areas. The amendment is intended to make rural areas more mobile while not to impede the competitiveness of the market for taxis or local public transport.
Under this amendment, the digital passenger transport services are subject to various restrictions. For example, digital service providers are not allowed to pick up spontaneous passengers on the road like traditional taxis, but only can accept orders that have been previously placed by phone or app. Meanwhile, the controversial obligation to return to the company headquarters for rental cars remains. Drivers working for ride hailing platforms are not allowed to stand on the side of the road and wait for customers, but must return to the company headquarters after every trip even with an empty car. The remained obligation disappoints digital transport service providers, but is welcomed by taxi associations and drivers, which had demonstrated against the abolition of the obligation several times across Germany.
The Federal Transport Minister and Taxi and Car Rental Association Germany (TMV) have welcomed the amendment as an innovation friendly legal framework that accommodates technology development. Instead, the Free Democratic Party (FDP) and platforms, such as Free Now and Uber, criticised the regulation, especially on the obligation to return to headquarters, complaining that the numerous new regulations and restrictions are in favour of the taxi section and can prevent innovation and fair competitions in this sector.
- Free Now, Uber
- platform characteristics and business model, Sector aspects, competition, lobbying