Antitrust Authority Hails Ride Sharing

The Antitrust Authority has taken the side of ride-sharing companies seeking to operate in Israel against the opposition of the country’s taxi drivers and the Ministry of Transportation, Globes reported on Thursday.

Antitrust Authority director general Michal Halperin asked Transportation Minister Yisrael Katz (Likud) to take the necessary steps to open up the market for the benefit of the general public.

“The interests of taxi drivers must not prevent or delay a change in the existing regulatory policy for the purpose of opening the sector to free competition and adopting modern technologies with clear economic benefit,” Halperin wrote in her letter to the Ministry.

In arguing for the change, she said that current regulations result in “restriction of the services that can be a substitute for travel in private vehicles. The use of private vehicles affects overcrowding on the roads, parking problems in cities, and air pollution.

“Allowing the entry of advanced taxi services will enable people to abandon the use of a private car … Technological progress currently facilitates a broad range of possible advanced taxi services, and is bringing welcome competition to this market. What we want is for the consumer to be able to use his mobile telephone to obtain access to transportation, and to compare the prices of the various means of transportation.”

More specifically, Halperin asked Katz to establish a joint team with the Ministry of Finance for the purpose of removing regulatory barriers and promoting the introduction of cooperative means of transportation, such as provided by Uber and Lyft.

The Ministry of Transport has until now sided with the old taxi industry against Uber, on the grounds that “harming taxi owners will detract from their ability to compete in the market, due to the various expenses imposed on them… It is also liable to cause the collapse of the taxi sector.”

Taxi drivers, who have to take expensive course and pass government-administered tests, have maintained that allowing unregulated drivers into the market constitutes unfair competition.

In addition, Katz has said that such a regulatory change would be costly: the government would have to compensate current drivers in the amount of 8 to 9 billion shekels.