What does Uberisation mean for the market? Widespread internet access, the popularity of smartphones and ubiquitous mobile apps all affect the market. The example of the US platform Uber, providing passenger transport services almost worldwide, has highlighted changes in business and law that deserve discussion.
The sharing economy as a foundation
Any account of Uber’s business strategy must address a currently fashionable concept: the sharing economy. It describes a new model of exchanging goods and services made possible by rapid, widespread information exchange and the spread of internet access. In essence, consumers themselves make goods and services available to other market participants. This introduces another term, ‘prosumer’: a consumer who shares spare resources with others to maximise their use, or the utility of an asset or exchangeable service.
Beyond the definition?
Terminology cannot fully capture the issue because markets are not static: they constantly change and innovate. A typical sharing-economy example is making one’s home available to others for a modest income or to meet people and gain reciprocal accommodation opportunities. Another is carpooling, particularly popular in the United States and used in Poland by services such as BlaBlaCar. It involves sharing transport with other, previously unknown people, for example to split journey costs by contributing to fuel.
Intermediation in passenger transport?
The absence of rules under which transport businesses such as Uber or Bolt could be classified created a need for appropriate legislation. In Poland, taxi passenger transport is primarily governed by the Road Transport Act of 6 September 2001 (consolidated text: Journal of Laws 2019, item 58, as amended). Locally, municipal councils may adopt additional rules, such as limits on licences or conditions for licensing examinations in municipalities with more than 100,000 residents.
Outside the law?
Uber’s operating model simply does not fit the existing legal framework, causing widespread controversy. Supporters welcome low prices and availability. Other businesses complain of unfair competition, while bodies such as the Road Transport Inspectorate and tax authorities act against unlawful operators. Taxi drivers call for their legal position to be brought into line with that of other carriers, including those working for Uber.
Lex Uber
In response to carriers’ dissatisfaction and inconsistencies in the law, the Sejm passed an amendment to the Road Transport Act on 26 April 2019. On 9 May 2019, the Senate adopted minor amendments, including rules on the validity of existing licences and marking vehicles with the licence number. The main change is a definition of passenger transport intermediation: ‘business activity consisting in forwarding orders for passenger transport by passenger car, a motor vehicle designed to carry more than seven and no more than nine persons including the driver, or taxi’. Licensing is also to be simplified by reducing fees and guarantees for both carriers and intermediaries. The legislature also intends to abolish mandatory city-topography examinations for licences.
A level playing field?
The government’s bill is not the only proposal submitted to the Sejm, but it is the only one currently progressing. Its explanatory memorandum states that the new rules are intended to standardise operators’ position and move activity out of the grey economy. In addition to defining intermediaries, the amendment requires passenger transport operators to register in the CEIDG or KRS. Registration is one of the conditions for obtaining a taxi passenger transport licence. Applicants must also demonstrate that they have not been convicted of an intentional offence or a fiscal offence.
Potential effects
The bill and amendments aim to place market participants on an equal footing by simplifying licensing, allowing payment through mobile apps and requiring carriers to hold insurance. Both supporters and opponents of the measures, passed by the Sejm on 16 May 2019 following Senate amendments, must take account of market changes. The direction and pace of change in transport now appear irreversible. Despite the adverse consequences carriers fear for businesses, the market itself will decide which solution prevails. Low prices, easy ordering and predictable fares clearly appeal to consumers, who readily adopt new services. It therefore seems necessary to adapt to the changed market and develop competitive advantages that will ultimately determine a carrier’s success or failure.
Position as at 23 May 2019
