Hungary gov't cements regulated taxi fares
From Thursday, local governments will not be allowed to change taxi fares during a state of danger related to war, according to a government decree issued on Wednesday.
The first paragraph of Article 1 of the decree signed by Prime Minister Viktor Orbán and published in the Official Gazette yesterday evening stipulates that the official price in force and applicable on the day before this decree enters into effect cannot be phased out.
According to the price act, the representative body of the municipality competent for the area of validity of taxi licences (which is the Metropolitan Municipality in the capital) has so far decided on the fares that may be charged for the taxi service and the conditions of their application. The rates thus established are considered to be fixed official rates.
The second paragraph of Article 1 of the regulation is that the municipal government may change the level of the official price under paragraph (1), with the proviso that no maximum official price may be applied instead of a fixed official price.
However, it is stipulated that this ban does not apply to municipalities for which the tariff increase was provided for in legislation promulgated before 26 January but not yet in force.
On 25 January, the Budapest General Assembly decided to increase the uniform taxi fare by 10% (from March), with the basic fare rising from HUF 1,000 to HUF 1,100, the kilometre fare from HUF 400 to HUF 440 and the per-minute fare from HUF 100 to HUF 110.
The reason given for the increase is that the abolition of the fuel price cap at in early December 2022 has led to a significant increase in costs for taxi drivers.
The price act currently allows the General Assembly to set either a fixed tariff or a capped price, while the example of other large cities such as Vienna shows that a banded (minimum and maximum) price regulation by the authorities can ensure competition both in terms of price and the quality of service, the General Assembly argued.
Taxi lobbies and operators have written to the Prime Minister and several ministers to ensure that the official fare in Budapest's taxi transport sector is maintained. They write that there have been several attempts in the recent past to replace the regulated price with a free or partially free market price.
In the letter, the taxi drivers justify their efforts by saying that the regulation has had a positive impact in a number of areas since its introduction in 2013. A survey of the taxi operators concerned has also shown that there is over 80% support for a fixed official price.
The publication of the decree implies that their plea has not fallen on deaf ears.
Citing Hungary's soaring inflation and the rapidly changing economic environment, the municipality was inclined to make the price regulation model more flexible and considered introducing the so-called Vienna model.
In that case, the official price could have been regarded as the mid-market price and taxi companies could have deviated from it both upwards and downwards by 10%. However, this change would have required an amendment to the price law, at a request by the Municipality of Budapest.
Cover photo: MTVA/László Róka
