Kuluttajaliitto: Taxi Act reforms cause 40 percent price increases, worse service

Kuluttajaliitto: Taxi Act reforms cause 40 percent price increases, worse service

More and more people have complained to Kuluttajaliitto about taxi issues after the sector’s legal reforms began to affect major changes in their introduction in 2018, says the non-governmental organization.

Consumers have reached out with complaints about the availability of transport, pricing arrangements and the safety of taxi service providers across the country.

According to the general secretary of the union Juha Beurling-Pomoellreforms in the sector put consumers in an unbalanced position.

Younger consumers in urban areas who know how to navigate smartphone applications have the opportunity to compare, for example, price offers.

However, elderly people living in remote rural areas are at a particular disadvantage and generally find it difficult to get a ride when needed. According to the union, this is partly due to reforms that effectively remove previous requirements for the availability of taxi services in such locations.

According to the Consumers’ Association, taxi availability problems must be addressed, especially in areas where there is no public transport.

The changes in the law also brought liberalized pricing to the industry, whereby taxi companies decide how much to charge customers. But since the reforms were introduced in early 2018, prices have risen significantly faster than the country’s inflation.

According to Statistics Finland’s estimate in June, taxi prices have risen by an average of 30 percent nationwide since 2015, i.e. three years before the reform came into force. But in the more remote areas of the north, price increases have approached 40 percent since then.

File photo of the taxi station.Silja Viitala / General

CEO of the Finnish Taxi Owners’ Association, Timo Koskinentold news service STT that the industry’s current pricing strategy is primarily based on market logic and added that "consumer choices matter."

"We provide services that people want," he said, adding that if the demand for cheaper taxis increases, such services will become available. On the other hand, he said, if customers are increasingly looking for better quality taxi services, more of them will be offered, adding that there are many opinions on whether prices have really gone up.

The union represents a large part of the country’s taxi sector operators.

Koskinen questioned estimates that taxi prices had risen by up to 40 percent, and stated that the total cost of taxi trips subsidized by Kela has actually decreased since 2018.

He also said that the prices from Helsinki-Vantaa Airport to the central area of ​​the capital cost between 35-45 euros in the summer of 2018, while today the fixed prices for the same trip vary between 35-39 euros.

Koskinen added that in the summer of 2018, a 10-minute 10-km trip cost 22 euros, and now it costs around 24 euros.

Kuluttajaliitto agreed that taxi prices are usually not unreasonable when the market is working as it should.

However, according to Beurling-Pomoelli, the head of the trade union, market logic only works correctly for certain groups and pointed out that weakened consumers are not always ready to look for the cheapest prices.

"If we are talking about elderly people with reduced hearing and cognitive abilities, how can they start bidding [cheaper] taxis very efficiently?" he asked.

Source: The Nordic Page

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