The Uber Case in Portugal. European Seminar on Competition Law Valeria Bianco Autoridade da Concorrência 20 November 2015

Transcription

1 The Uber Case in Portugal European Seminar on Competition Law Valeria Bianco Autoridade da Concorrência 20 November 2015

2 Contents I. Uber in Portugal II. The April 2015 Court Injunction and the June 2015 Final Decision III. What Next? 1

3 Uber in Portugal Uber Portugal Lda. was created on 25 February 2013, having as shareholders Uber B.V. and Uber International Holding B.V., both with headquarters in The Netherlands. In Portugal, Uber foresees two types of service: Uber Black (since July 2014) and UberX (since December 2014). UberPop (ride-sharing platform) is not available in Portugal. Uber is mainly present in Lisbon and Porto. o o Uber Black operates in the luxury car segment (e.g., Audi A6, BMW series 5 or Mercedes Benz Class E), and was the first Uber service to operate in Portugal. The base tariff: 2, followed by a 0,30 tariff per min and 1,10 per km. A trip will cost a minimum of 8 (which is also the tariff paid in case of a cancellation). This service do not compete with regular taxi services (different relevant markets). UberX is the low-cost service (e.g., Volkswagen Golf, Opel Astra or Seat Leon). Base tariff: 1; + 0,10 per min; + 0,65 per km. A trip will cost a minimum of 2,50 (which is also the tariff paid in case of a cancellation). 2

4 The Court Injunction of April 2015 (1) Earlier this year ANTRAL (Associação Nacional dos Transportadores Rodoviários em Automóveis Ligeiros) filed a complaint with a Court in Lisbon for an injunction against Uber Technologies, Inc. On 24 April, the Court ordered the immediate prohibition of Uber s activities in Portugal. The Court stated that the market for taxi-like services already suffers from an excess supply and that Uber s activity jeopardizes the economic survival of the licensed taxi companies, the Court decided the following: Uber Technologies, Inc. (with HQ in S. Francisco, CA) is notified to immediately close down its webpage in Portugal, to cease its activity of passenger transport via web applications, to cease the recruitment of drivers with vehicles to carry out such transport and the execution of contracts for passenger transport, under the name Uber or any other; All telecom operators in Portugal, all banking institutions operating in Portugal as well as all acquirers (basically Unicre) are notified to cease all operations (registrations, payments) enabling Uber to conduct its business; The Telecoms Regulator, the Central Bank and the Transport Regulator are asked to ensure the fulfillment of the above Court s instructions. 3

5 The Court Injunction of April 2015 (2) In its Decision, the Lisbon Court put forward as proven the following facts: Uber conducts an illegal (economic) activity; Its services are advertised in a misleading way; and It constitutes a risk to the (end) customer. Also, serious doubts were raised over the fulfilment by Uber and the drivers used by Uber of their fiscal obligations. The Court concluded that Uber s economic activities in Portugal Damage the commercial interests of ANTRAL s associates as a result of unfair competition and Damage the public interest which, according to the Constitution, is to be protected by the Portuguese State. 4

6 Uber s Response to the Court Injunction Following the Court s Decision, Uber filed an appeal and stated it would also file a complaint with the European Commission. Uber commissioned an academic study on the public s perceptions about the services offered by Uber in Portugal. Among other results, Uber users were shown to rank its services above the service provided by regular taxis. Uber s defense in Court before the final Decision was based on the following arguments: Uber Technologies, Inc. (the entity notified by the Court) is not the entity offering Uber services or the so-called Uber platform in Portugal (which allows for the app download, etc.); that entity is Uber B.V., incorporated and with HQs in the Netherlands; Neither Uber Technologies, Inc. nor Uber B.V. sell/supply transport services; they supply a platform that brings together customers and transport service providers. Neither Uber Technologies, Inc. nor Uber B.V. employ drivers and pay them fees or commissions. 5

7 Final Decision by the Court In its 25 June Decision, the Court considered the arguments laid down by Uber Technologies Inc., as not valid and ordered Uber to cease its activity in Portugal. The Court put forward several facts as suitably proven: Uber registers the vehicles and their drivers that provide Uber mediated services ; fixes and collects the fare; pays the drivers and always receives a commission; Uber defines the fares with no intervention of any kind by the regulator (IMT); Neither Uber nor the vehicles and drivers registered with Uber hold the required licenses to exercise their activity; and vehicles lack suitable identification as well as taximeter; There is already an excess supply in the market for taxi-type of services and the competition exerted by vehicles registered with the Uber platform endangers the economic survival of the licensed taxi companies; Both the regulator (IMT) and the police have declared their inability to act (supposedly to put a stop to Uber s activities in Portugal). 6

8 Despite the Court Decision Uber continues to operate in Portugal: How? Some telcos blocked Uber s internet site, but apparently not all of them; Telcos pointed out that only Google, Apple and Microsoft have the means to block the download of Uber app, and they have not been notified by the Lisbon Court; Since the notified party was Uber Technologies, Inc., and not Uber B.V., at least for some time, payments involving Uber B.V. kept being processed; Apparently, if a customer holds a credit card issued by a bank which is not part of the Portuguese Banking System, then payments are processed without problem. 7

9 What Next? (1) Uber controversy strengthened awareness as to the need to revisit the regulatory framework for taxi services, namely regarding: Entry restrictions: Limit to number of operating licenses. Geographic/Territorial restrictions: Licenses valid only within municipal boundaries, or impose a return trip empty of passengers (inefficient allocation of resources); Legally fixed tariffs: Lack of adjustment between supply and demand via price mechanism Market can be thin at certain times/trips Fixed tariffs allow cross-subsidizing: dense markets/low-density markets, peak traffic service/off-peak service. Apps for several competitors easier search, greater role for price mechanism, higher probability of a match. 8

10 What Next? (2) When revisiting the existing regulatory framework: Should we go for fully liberalized taxi services? Partial liberalization : how far should it go? E.g., should geographic restrictions be lifted? If some form of market liberalization goes ahead, will there be room for compensation to be paid to taxi companies that acquired operating licenses in a previous regulatory framework? How to find a level playing field? Regulation should be proportional. Other issues beyond competition: Do drivers registered with Uber work as independent contractors or as Uber employees? 9

11 What Next? (3) Competition Authority s role can entail: Advocacy for a level playing field and for efficient outcomes Recommendations to the appropriate entities, public or private, including the sector regulator, the government and the Parliament Follow up of the regulatory revision process 10

12 What next? (4) Specific competition law issues could arise from business models such as Uber: Risk of price coordination through the Uber platform Surge price as abuse of dominance? Exclusivity issues 11

13 Thank you! 12

14