Passenger transport: Municipalities have leeway regarding return obligation

The Bundestag has, as expected, reformed the law on passenger transport in its recent session, which has been in force as the Passenger Transport Act (PBefG) since 1935 and in a revised version since 1964. The draft law, heatedly debated and criticized especially in the taxi industry, from the CDU/CSU and SPD, in the version amended by the Transport Committee, was approved by the coalition factions as well as Bündnis 90/Die Grünen, while AfD, FDP, and die Linke voted against it.

To justify the proposal, the governing factions reiterated that platform-based on-demand mobility services have the potential to reduce motorized individual traffic in cities and provide people in rural areas with efficient and affordable mobility services. The regular approval of demand-driven scheduled services also provides transport companies with an additional opportunity to shape the local offer. The law must now pass the Bundesrat, where approval is considered secure because the Green Party was involved in the GroKo project and correspondingly approved it in the Bundestag.

Previously, the parliament had rejected an amendment by the FDP to the coalition draft in a second reading, with AfD abstaining. In it, the Liberals had demanded the abolition of the return obligation as a condition for new mobility providers to operate successfully in the mobility market.

Multiple business locations: Municipalities gain flexibility

The regulation, which is controversial mainly for environmental and efficiency reasons, thus remains in place, with drivers still having to return empty to their bases. Only taxi providers are allowed to pick up passengers spontaneously. However, municipalities generally have more flexibility in reducing the return obligation in larger metropolitan areas by designating several "return points." This is meant to help avoid empty trips. Municipalities can also protect their own shuttle services in public transport to some extent by setting minimum prices for providers in this segment. To monitor the return obligation, data from shuttle vehicles are to be recorded.

This is the first time parliament has created a solid legal foundation for new mobility providers and pooling services like Moia, CleverShuttle, ViaVan, ioki, or Uber. Recently, these services have increasingly been integrated into public transportation, which is expected to become even easier, especially in rural areas in the future.

Legal certainty now possible

In almost two years of work, it has been possible to create a modern and attractive passenger transport law "that enables innovation and preserves proven practices," said Alois Rainer (CDU/CSU) at the beginning of the debate. New, digitally-based mobility services would be legally enabled by the new regulation without causing competitive disadvantages for existing providers. "States and municipalities are given the appropriate control options," emphasized the CSU representative.

He clarified that the ability to pick up customers spontaneously remains reserved for taxis. The obligation to return to the base remains in place for rental cars as well. However, municipalities could permit multiple suitable parking locations for rental cars instead of just one base. The requirement for a pre-order period for rental car bookings has been waived. A new form of mobility, pooling, has been created – both within and outside public transportation, said Rainer. Demand-driven pooling services fulfill an important function for the transport transition "at the interface between individual transport and public transport."

SPD: Law accommodates digitalization

The law is necessary and commendable, agreed Sören Bartol from coalition partner SPD. Unlike the last reform of passenger transport law, there is currently a dynamic change in the mobility market and transport offerings.

"The mobility sector has changed dramatically due to digitalization and climate policy challenges," said Bartol.

Especially digitalization opens up new possibilities and drives the mobility transition. At the same time, new transport offerings have emerged that threaten the established forms of transport and thus a functioning passenger transport market.

"Without new regulation of the market, we would enter an uncontrollable competition between traditional public transport and the taxi sector," said the deputy chairman of the SPD parliamentary group.

This would pose a high risk to employees by undermining social standards through dumping offers. Bartol noted his faction would have preferred clearer language on the requirements for social standards in public transport. However, there were differing opinions within the coalition on this matter.

Criticism from the FDP: Return obligation causes millions of empty trips

As per its proposal, the FDP criticized that the law prevents fair competition in transport through a multitude of new regulations and restrictions. They fear the return obligation will result in millions of empty trips per year, "a completely absurd regulation in terms of climate protection," as FDP Bundestag member Torsten Herbst criticized. Dirk Spaniel (AfD), on the other hand, spoke of patchwork. "The law is also marked by political cowardice," he stated. The AfD representative made it clear that his faction also supports protecting the taxi trade. However, it is inevitable that new offerings will exist and be accepted by people. Therefore, there needs to be a level playing field between traditional taxis, rental car services like Uber, and public transport offerings.

Greens: Dumping curbed

Stefan Gelbhaar (Bündnis 90/Die Grünen) from the Greens predicts: "The taxi trade will survive with this compromise." Also, because taxi fares would become more flexible, and the return obligation for rental cars remains in place.

"Under our pressure, rental car services like Uber can now be more strictly regulated," stressed the Green representative.

Platform providers now have to obtain a permit like everyone else, and that's a good thing. His faction also enforced anti-dumping rules. Minimum prices would curb price undercutting competition, Gelbhaar stated.

From the perspective of Federal Transport Minister Andreas Scheuer (CSU), there is now an innovation-friendly legal framework in which all mobility offerings can fit.

"Cities, rural regions, people, and the environment will benefit from this modern mobility mix," said the minister.

Authorities can set fare corridors

According to the law, digitally-based offerings for demand-based collective transport may serve only the booking market. They are not subject to operational and transport obligations and fundamentally do not have to return to their base.

"To protect local public transport interests, municipalities are given the necessary control options and the possibility to set the standards to be met by the new offerings themselves," states the draft law.

To relieve the taxi trade from regulatory burdens, the licensing authorities are given the possibility to loosen the obligatory taxi fare for the booking market by introducing a municipally set fare corridor with maximum and minimum prices and to establish route fares to frequently visited destinations like fairs, airports, and train stations. The local knowledge test for taxi drivers has been abolished, while the obligation to have a navigation device that meets the current state of technology has been introduced.