OFFICE OF FAIR
TRADING News Release (131/08) issued by COI News Distribution
Service. 14 November 2008
The OFT has
launched a campaign to ensure minicab operators across the UK
understand competition rules.
The OFT is concerned there may be a particular lack of awareness
among private hire vehicle operators of the stringent civil and
criminal laws against price fixing, following a number of reports
of minicab operators entering into agreements with their
competitors to set prices.
In several cases competitors appear to have agreed prices in
their local area on a per mile or minimum journey cost basis. The
most recent report involved firms in Lancashire but the OFT has
received information alleging similar practices elsewhere in the UK.
Minicabs are pre-booked, with customers able to choose a service
by shopping around. The market is different to taxi services where
the first available vehicle is hailed off the street and fares are
usually set under separate licensing rules.
Minicab operators are being warned that individuals may face
criminal liability for price-fixing, including fines and even the
possibility of imprisonment. In addition businesses could be fined
up to 10 per cent of their total turnover.
During the campaign the OFT is working with trade associations,
the Licensed Private Hire Car Association (LPHCA), the Private
Hire Board and the National Private Hire Association to spread
awareness of the rules.
The OFT has also written to Local Authority Trading Standards
Services and taxi licensing officers informing them of these issues.
Simon Williams, Head of the OFT's Cartel and Criminal
Enforcement Group, said:
'Minicab operators in some areas appear to be unaware of the
importance of independent price setting. Companies are free to
change their prices but must understand that the law forbids any
collusion with competitors when deciding price levels.'
Steve Wright MBE, Chairman of the Licensed Private Hire Car
Association, said:
'Licensed Private Hire Operators including minicabs and
chauffeurs, should be aware of the fact that fixing fares with
competitors is unlawful under competition law. The LPHCA welcomes
the Office of Fair Trading's campaign. We will be
publishing further guidance for members to promote full compliance.'
NOTES
1. The campaign is being supported by trade bodies, the Licensed
Private Hire Car Association, the National Private Hire
Association and the Private Hire Board which are committed to
working with the OFT to promote free and fair competition in the
minicab industry. The campaign is also being supported by the
National Association of Licensing and Enforcement Officers, the
Public Carriage Office and the Institute of Licensing.
2. The OFT's campaign is directed at private hire vehicles
or minicabs, as opposed to taxis. Private hire vehicles have no
more than eight passenger seats and must be booked in advance by
customers through an operator. They may not 'ply for
hire' in the street. This is in contrast to taxis which are
public transport vehicles, also with no more than eight passenger
seats, but which are licensed to 'ply for hire', that
is stand at ranks or be hailed in the street by members of the
public. The fares for taxis and minicabs are licensed by local
authorities (district/borough councils, unitary authorities or The
Public Carriage Office in London) but are subject to different
regimes. In particular, the fares for taxis, but not minicabs,
are in most cases set by the local authority as part of its
licensing functions. Minicab firms set their own fares.
3. Under the Competition Act 1998 any business found to have
participated in an unlawful price-fixing agreement may be fined up
to 10 per cent of its total turnover. In addition, the Enterprise
Act 2002 makes it a criminal offence for an individual dishonestly
to take part in a price fixing agreement or other form of cartel
conduct between competing businesses. Anyone convicted of the
offence could receive a maximum of five years imprisonment and/or
an unlimited fine.
4. Anyone who has information about cartels is asked to call the
cartels hotline on 0800 085 1664 or email cartelshotline@oft.gsi.gov.uk.
5. The OFT also operates a leniency programme for businesses and
individuals who wish to confess to cartel conduct. For further
information please see the "Confess your cartel to the
OFT" page on the OFT website.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com