ITF report: Make consumers the priority when regulating Uber-style transport and taxis

A new report by the International Transport Forum (ITF), an OECD intergovernmental organisation, has unveiled policy suggestions for governments in regulating popular ride-hailing apps. Could this pave the road for sustainable urban mobility?

uber taxi ad
Uber taxi ad. The International Transport Forum sees lesser distinction between regulations for traditional taxis and Uber-style providers. Image: Alper Çuğun , CC BY-NC-ND 2.0

App-based transport services benefit consumers more, said a report by the International Transport Forum (ITF), although it agreed with calls for such services to be regulated.

And while governments around the world debate and work out how to regulate these new apps, they should keep in mind that consumers’ needs should come first, added the ITF, an intergovernmental organisation with 57 member nations.

In the report titled “App-Based Ride and Taxi Services: Principles for Regulation” the Paris-based OECD-linked body said that traditional taxi companies will still be important, but they should also learn how to innovate to meet consumers’ needs better.

“Policy should enable innovations that contribute to policy objectives such as equitable access, safety, consumer welfare and sustainability. This will likely entail lightening market entry controls and fares regulation for dispatched taxi services,” the ITF said in the report.

These key points put forward by the ITF report come at at time when many regulatory bodies from countries around the world are facing mounting pressure from traditional taxi operators to either block the new market entrants such as Uber, Grab, Lyft and Zipcar, or at least make them play by the same rules.

Taxi companies are up in arms as they are losing more passengers to app-based providers. What irks these companies even more is that while they have to pay taxes and hefty franchise fees to operate legally, app-based providers do not. 

The ITF report said that these app-based services offer a more consistent, universally available and easier way for consumers to get around.

They also provide people with a way to earn extra income as well as help to reduce the environmental impact of cars as previously underused assets get shared.

However, any new regulation should be simple and uniform and regulators should avoid creaitng different categories of providers, the ITF said, even as it points out that more taxi operators are offering app-based services, so that regulatory distinction between app-based and taxi services is becoming increasingly irrelevant.

These key findings resulted from workshop discussions of the ITF’s Corporate Partnership Board in October last year, that brought together representatives of ride-hailing platforms, the taxi industry, regulators and academics.

The discussions highlighted that app-based mobility services provide more transparency, certainty and accountability than traditional street-hailing or radio-dispatched service.Transport apps also provide better consumer value than traditional taxi services.

The discussions also found that these transport apps improved the allocation of available vehice capacity – which benefits consumers, operators, cities and the environment.

London-based transport sharing and sustainable urban mobility platform Carplus had earlier voiced the same observation in its annual survey released last month.

Carplus reported that car clubs and car-sharing services removed over 25,000 privately-owned vehicles from the road in London last year, contributing to improving air quality and urban mobility in the city.

Ahead of the ITF report being released, Singapore’s Ministry of Transport had decided last month that it would regulate app-based services to protect consumers and to help the industry grow.

Under the new measures, Singapore’s Uber and GrabCar drivers, numbering between 8,000 and 10,000,  will have to obtain a vocational licence, go for medical tests and background screenings, and comply with a demerit point system by the first half of next year.

Cars used for these services must be registered with the Land Transport Authority (LTA), and display a decal for easy identification.

Noting the disruption these new market entrants have caused, Transport Minister Khaw Boon Wan said that the ministry will amend existing measures to help the taxi industry cope.

Such measures include reducing the time requirements for the Taxi Driver Vocational Licence course from 60 hours to 25 hours using a brand new syllabus. Active taxi drivers with no demerit points will also be exempt from refresher courses, allowing them more time on the road.

Such policy changes align with ITF’s focal message for policy regulators worldwide: embrace innovation, and protect the consumers’ welfare first.

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