CMA responds to Transport for London’s private hire regulations proposals
Published on 2nd Dec 2015
On 2 December 2015 the Competition and Markets Authority (CMA) published its response to Transport for London’s (TfL) proposals for changes to its private hire regulations. In its response, the CMA recognised that private hire vehicle passengers need the protection of appropriate regulation, but said that this need should be balanced with consumers benefitting from effective competition. The CMA highlights that effective competition exerts downward pressure on prices and upward pressure on service quality and standards.
In its consultation response, the CMA expresses the belief that some of the proposals put forward by TfL, if adopted, would lead to the introduction of regulatory measures which would not serve legitimate public interest needs and which would have the effect of unnecessarily weakening competition.
Although the CMA’s response does recognise that TfL has a policy agenda with a scope that extends much wider than competition concerns, it ultimately suggests that the impact of the proposed regulations on competition is disproportionate. The CMA suggests that equally effective regulations could be proposed which do not create such a distortion on competition in the private hire vehicle market.
TfL’s consultation closed on 23 December 2015 and it is planned that the responses will be analysed in early 2016 ahead of any amendments to the regulations being announced and implemented. The outcome of the consultation, and in particular the attention given by TfL to the CMA’s comments, is eagerly awaited as the final decision may have implications for the regulation of disruptive technologies beyond the transport sector.
