FTC to do market survey on taxi apps

The Fair Trading Commission, FTC, plans to conduct a market survey to assess the adequacy of current regulations governing taxi apps.

This move is in response to the emergence of ridesharing services like Uber, InDrive, and 876 On The Go, which have raised concerns about passenger and driver registration outside of the purview of the Transport Authority, which regulates the sector. Also issues about market efficiency.

“The Fair Trading Commission is undertaking a study to assess the regulatory framework governing ride-sharing services with a view to making recommendations geared towards improving the efficiency of the sector,” it said in a July 17 statement posted on its website.

“The current conditions under which ride-sharing platforms operate in Jamaica raise concerns in areas such as passenger safety and the competitive dynamics in the sector,” the FTC stated.

The competition watchdog noted that while local transportation serves the public good by facilitating access to employment, education and healthcare, market inefficiencies, such as congestion on some routes and protracted waiting times on others, indicate that the existing regulatory framework may be inadequate.

Transport Minister Daryl Vaz recently issued a temporary ban on new taxi apps to allow regulatory bodies to gather data on drivers and customers.

There were some 25,500 registered taxis in Jamaica, with a significant portion operating within the Kingston metropolis, according to the Economic and Social Survey Jamaica 2023, newly released by the Planning Institute of Jamaica. Of that number 18,500 were categorised as route taxis that serve commuters on designated routes and 7,075 were licensed hackney taxis, which are not bound by routes. The transportation sector, with seating capacity of 156,750 in 2023, can serve 5.0 per cent of the population daily, according to the report.

While ride-sharing services offer potential solutions to issues like unreliable transportation and communication gaps, their unregulated operation poses risks, the Fair Trading Commission’s statement indicated. The agency noted that without proper regulation, these platforms might undermine efforts to achieve market efficiency and safety standards.

The study to be conducted will also explore how ride-sharing services can be integrated into the existing transportation framework to enhance service quality and accessibility. By doing so, the competition regulator aims to promote sustainable development goals and ensure that the benefits of ride-sharing services are maximised, while minimising associated risks, it said.

The findings will shape policy that seeks to “balance innovation with safety and efficiency”, ultimately benefiting passengers and operators alike.

“Addressing these issues is of paramount importance to policymakers, given the importance of the public transportation sector to the viability of sectors such as labour, health and education, which help to promote sustainable development goals,” the FTC said.

Neither 876 On The Go, InDrive nor Uber responded to requests for comment.

The Fair Trading Commission expects to conclude the market study on by December, said Executive Director David Miller.

The agency’s remit includes ensuring fair and functioning markets for all parties Its study of ridesharing will offer guidance to regulators. It will also draw on case studies from parts of the globe.

“The study will review how the ridesharing sector is regulated in other countries, and how a competitive transportation sector, which includes ridesharing, drives economic growth. The measures recommended by the study will reflect measures being pursued in other countries which the FTC deems most appropriate for Jamaica,” Miller said.

steven.jackson@gleanerjm.com