Communication

The aim of the protection of market competition is primarily to create benefits for consumers and equal conditions for all entrepreneurs on the market, who, acting in accordance with the existing rules and competing on the market with the quality, price and innovation of their products and services, contribute to the overall development of the economy.

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Decision of the Town of Split on the provision of taxi services hampers competition

The Croatian Competition Agency (CCA) issued its opinion on the basis of the complaint it received from the co-owner of the joint trade K.N.B. Mobile from Split, stating that the Town of Split adopted a new Decision on the provision of taxi services on the basis of which it restricts the number of taxi licences (permits) that may be issued to one taxi driver to one-vehicle-one-permit principle. The previous Decision allowed then permits per one taxi driver and the complainant finds that the new Decision distorts competition.

The CCA asked the Town of Split to communicate reasons for such a Decision. The Town of Split explained in its writing that it acted upon the initiative of the association of taxi drivers of the Town of Split that wanted to engage more drivers in the provision of taxi services. In addition, the association of taxi drivers wanted to protect traders claiming that companies can provide taxi services with larger taxi fleets, which in their opinion, limits the provision of the same service for taxi drivers who are registered as traders.

Notwithstanding the powers of the Town of Split as a local self-government unit to decide on the basis of separate laws on the criteria for the provision of taxi services in the territory falling under its jurisdiction, the CCA pointed out in its opinion that the provisions concerned should not protect a certain category of undertakings – taxi drivers based on their legal status. Instead, the provisions should ensure equal access and participation in the market for all undertakings and encourage competition on this market that is based on quality and price of the service.

At the same time the CCA indicated that the reduction in the number of taxi licences (permits) that may be issued to one taxi driver from ten to one permit per vehicle definitely decreases competition.

On the basis of the above findings the CCA proposed to the Town of Split to reconsider the provisions concerned as to increase the number of permits that may be issued to one undertaking for the provision of taxi services, to the benefit of the consumers in the form of lower prices, wider choice and better quality.