Taxi reform prepared in broad and open cooperation

This is the reply of the Ministry of Transport and Communications to the press release published by the Finnish Taxi Association on 9 April 2019. The taxi reform is part of the Act on Transport Services, which aims at providing clients with diverse services that correspond to their needs. The Act gives room for development of the entire transport market by reforming the public steering of transport and obligating service providers to make their data public for service development.

The Act aims at ensuring the availability of transport services, promoting competition on the passenger transport market and improving the competitiveness of service providers in the transport sector both in Finland and on the international level. The Act also contributes to the efficiency of transport services, thereby helping to achieve environmental and climate goals.

The Act creates preconditions for digitalisation, new business models and new kinds of services in transport. The Act requires, for example, that mobility service providers make the essential data related to their services public for service development. The purpose is to provide clients with seamless multimodal travel chains. In the taxi sector, in particular, there have been positive examples of the impact of the opening of data interfaces.

Reform facilitates availability of taxis and drivers

The objective of the reform is to increase the supply of taxi services since prior to the reform, the number of taxi operators had decreased year after year.

As the restrictions to the number of taxi licences were abolished, it is now easier to enter the sector and provide services on a part-time basis alongside other employment, for example, or combine the provision of taxi services with another business. This also opens up new opportunities for organising transport services in sparsely populated areas.

Following the Act's entry into force, new operators have entered the field. The Finnish Transport and Communications Agency has awarded more than 3 900 new taxi transport licences and nearly 5 000 new taxi driver licences.

One solution to the lack of drivers was to abolish the part of the taxi driver's test concerning the driver's local knowledge. This was discussed at Parliament, which considered the abolition to be a good solution. The Ministry took up the issue promptly after the Finnish Taxi Association, for example, and many other operators in the taxi sector had proposed the abolition of the test at a follow-up meeting on the Act on Transport Services in autumn 2018.

Drivers still need to have sufficient interaction and language skills as well as local knowledge of their principal operating area. Unlike before, the transport licence holder is responsible for ensuring that the requirements are met.

The taxi driver's test remained otherwise unchanged. The test measures essential skills required from taxi drivers, including whether the driver is capable of ensuring the passengers' safety and accommodating their disabilities.

The quality assurance measures of taxi companies and dispatch centres are essential elements in ensuring and improving the drivers' competence.

Statutory services ordered by the Social Insurance Institution of Finland and municipalities for the elderly, disabled persons and health care clients constitute a significant proportion of taxi transport. What is essential is the selection of a suitable method for organising transport services and adequately effective procurement contracts. Ensuring smooth operation of services also requires close cooperation between different authorities. For this reason, the Ministry of Transport and Communications has requested the Finnish Transport and Communications Agency to investigate the matter together with competent authorities.

Impacts assessed together with relevant actors

Abandoning licence regulation and maximum fares in the taxi sector has allowed for the supply and prices to vary according to the market situation.

A well-functioning market needs to be supported by effective monitoring. Any activities contrary to competition law on the market may influence service prices and availability. Monitoring ensures that all operators play by the common rules.

The Ministry monitors the effects of the amendments to the Act on Transport Services and the taxi legislation contained in it and assesses them together with the Finnish Transport and Communications Agency, for example. The Ministry has also appointed a transport market forum for the monitoring. Both authorities and representatives of the sector may participate in its work. When monitoring the effects of the Act, the Ministry will also take account of citizens' feedback as well as of drawbacks brought up in the media. 

In the case of an extensive reform, actors need time to adjust to the new situation. It is not possible to draw more comprehensive conclusions on the Act's effects until at a later stage.

The Act on Transport Services was prepared in a transparent manner and in a broad cooperation with the relevant association, actors and stakeholders. The citizens were also given the opportunity to influence legislation during the preparation process. Preparatory discussions on the Act on Transport Services were available as live webcasts and later as recorded webcasts. As usual, the Act was also available for public consultation in the consultation service maintained by the Ministry of Justice.

The Act on Transport Services project was launched in November 2015. Due to its wide-ranging content, the project was carried out in three stages. The Act mainly entered into force on 1 July 2018 and the final third stage mainly entered into force on 1 April 2019.

Inquiries:

Director Elina Thorström, tel. +358 295 34 2393

Press release of 24 May 2017: Good and flexible transport services through a new act
News article of 5 July 2018: Transport Services Act entered into force on 1 July
Press release of 19 December 2018: The first impacts of the Act on Transport Services meet expectations
Press release of 28 March 2019: Act on Transport Services will facilitate and ensure availability of services
Finlex: Act on Transport Services (24 May 2017/320)
Finnish Competition and Consumer Authority, press release of 5 March 2019: FCCA suspects several taxi dispatch centres of illegal restrictions on competition