German city of Heidelberg introduces minimum fares for Uber rides

Local Germany

2 days ago

The south-western city of Heidelberg has introduced minimum fares for Uber and other taxis alternatives like Bolt. It's currently the only major German city with minimum fares in place.
The new regulation in Heidelberg stipulates that prices for trips in ride-share cars can be a maximum of 7.5 percent below the fees set for taxi drivers.
Previously the price of Uber rides was found to be around 35 percent cheaper than taxi fares for the same ride.
Taxi fares in Germany are regulated by the local district, and often have set minimum rates which can prevent taxi businesses from charging below a certain price. Ride sharing startups like Uber and Bolt have so far been exempt from these rules.
How much more will an Uber ride cost?
Unfortunately for customers of Uber, Bolt or similar app-based ride hailing services, rides around town will be significantly pricier going forward.
As an example, DPA reported that a journey from Heidelberg's main station to it's world-famous castle, which takes about 15 minutes, could cost as little as €9 with Uber versus about €25 by taxi.
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Being limited to a maximum of 7.5 percent below taxi fares, the same Uber ride could be expected to cost just over €23 now.
Why limit prices?
A spokesperson for the city of Heidelberg told DPA, "The order is necessary to prevent dumping prices in rental car traffic - regardless of whether the services are platform-based or not."
Uber criticized the decision, calling it a "black day for consumers," and suggesting that the rule would unfairly affect people with low incomes who might no longer be able to afford trips.
A
recent study
from the University of Oxford's Department of Computer Science, however, suggests that Uber's dynamic pricing model creates higher fares for passengers and also lower earnings for drivers.
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The non-profit consumer organisation
Stiftung Warentest
found that while Uber prices can be cheaper than taxi fares in some cases, they will also be significantly higher during times of high demand.
One example was seen at the Oktoberfest in 2019 when an Uber ride from Munich Airport to the
Wiesn
cost almost €120 – €40 more than with a taxi.
While Germany's regulations on taxi prices might keep prices higher at times, they also are designed to protect passengers from wildly inflated prices when demand surges.
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Will more German cities adopt minimum prices?
Differences in the rules for taxi prices versus services like Uber have previously led to
widespread protests by taxi drivers
.
The Federal Taxi Association sees similar pricing issues in more than 20 major German cities.
"We urge all affected cities in Germany to follow Heidelberg's example," the taxi association's managing director told DPA.
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Meanwhile the federal association "Wir fahren", has said it will support affected companies in taking legal action against the decision.
The city of Leipzig had previously set minimum rates for ride service providers, but the city revoked the order at the end of May following a legal dispute.
The district of Lörrach in southwestern Baden-Württemberg had introduced a similar regulation in 2022, but Uber is not actively operating there.
The city of Munich has recently said it would not set minimum prices for ride share services for the time being.
In the city of Heidelberg, which has a population of 155,000, there are 162 licensed taxi drivers and at least 95 vehicles at 18 companies organized through Uber, according to figures provided by the city.
The city sees the taxi industry as part of the public service and "worthy of protection".