EEC suspects aggregators of violating competition

EEC suspects aggregators of violating competition

The Department for Antimonopoly Regulation of the Eurasian Economic Commission (EEC) sent letters to specialized organizations of the taxi market in Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan to inform them of the forthcoming meeting on taxi market pricing. Vedomosti newspaper has got acquainted with two of the letters, their authenticity has been confirmed by EEC representative. The meeting will be held in Moscow on April 13. All the taxi aggregators will be invited as well.

The core claim is that the aggregators throughout the EAEU today set the tariffs for passenger transportation by themselves. Meanwhile, the drivers and taxi parks, though they are independent entities in the market, are deprived of the opportunity to participate in the pricing. They either agree to work at the rates of digital platforms, or refuse to connect to them.

According to the commission, this infringes the interests of both drivers and passengers. In addition, the EAEU aggregators use similar pricing algorithms, the commission continues its reasoning.

"This can be proved by the similar prices. During the rush hours, the prices of all the aggregators increase simultaneously by 3.5 times," read the materials for the meeting. In other words, aggregators do not actually compete with each other. "It seems to us that the largest taxi aggregators today are implementing a pricing model that maximizes the income of the aggregator, not the drivers. This model today is imposed on passengers and cab drivers and is non-alternative", explained Alexey Sushkevich, Director of Antimonopoly Regulation Department of EEC to Vedomosti newspaper.

According to the poll of the aggregators, they set their own prices using algorithms that take into account the current situation in the local market (for eg. the city district, current demand, number of available cars, weather conditions, etc.). This is a market mechanism, which allowed to increase the capacity of the market and secure travel, says a representative of Yandex.Taxi. "The prices are formed according to market mechanisms, which just contributes to the development of competition. Journeys have become affordable and transparent for passengers. Due to the dynamics of demand, the capacity of the cab market has increased, and this, in turn, has led to the appearance of new jobs for the drivers", - agrees the representative of Vezet that operates only in Russia.

Maxim service has reminded that the carrier always has the ability to refuse to fulfill an order if he does not agree with the proposed cost of the trip.

In addition, according to Maxim, the services are competing with each other within a certain area: "The mechanism of our apps provides the passenger with the ability to increase the cost of the trip, to request a price directly from the drivers. In this case, the price is actually formed by the passenger and the carrier by agreement". 

Gett service said that they plan to move away from the “taxi aggregator” model to "aggregator of aggregators". Thus they don’t have to interact directly with taxi fleets. This model will be implemented through a partnership with Citymobil, whose drivers will fulfill part of Gett's orders.

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