The Commission for Protection of Competition /CPC/ has imposed fines to the tune of EUR 100,000 to the subsidiaries of the platform for citizens’ taxi services Uber – Uber BV and Uber Rasier Operations - both are Dutch companies.

A Trade Register check has found out that there are two other companies registered in Bulgaria via Dutch companies with the American company being the owner of the capital – Uber Bulgaria and Uber Bulgaria Software & Development. Those are obviously not related to the taxi services, offered on the territory of Sofia on behalf of Uber, legal experts comment. According to spokesperson of the CPC Mario Gavrilov, the check has found out that Uber offers taxi services, despite claims of the company’s representatives that they are not involved in carriages, but deal with technologies only:

“It is all grounded on the fact that the Uber services have the main characteristics of taxis: they offer paid transport services on routes, preliminary provided by the clients. The online platform helps the drivers to avoid paying taxes, as well as the due license fees, paid by the other companies in the sector. Two of the Uber companies now have been imposed with fines of EUR 25,000 each because of unfair competition and a breach of the branch rules. Besides that the CPC has imposed other two fines of EUR 25,000 to each company due to their refusal to provide information on their turnover. That is why the envisaged legislative opportunity for the second fine to be determined via official channels has been implemented.”

Uber representatives were sought for comment, but we received no answer. The fine imposed can be appealed in court by the two Dutch companies, as the 5 members of the Supreme Administrative Court will be the last instance. The CPC also orders the companies to cease their unfair practices, which means ceasing their activities. The company must comply with that decision and the control now is in the authority of the Automobile Administration Executive Agency.

Still, the future remains unclear. Legal experts say Uber might go on with its activities via a third company, registered here or in another country, again circumventing the law. The servers of Uber are situated in the USA and both fined Dutch companies stay behind the Bulgarian activities, but not the companies, registered here – this all creates obstacles for sanctioning the violation. The lower price of the services is due to the fact that no license fee, VAT, social security instalments etc. are paid. It is not clear whether the drivers of these taxis pass the psychological test or have been sentenced.

Thus Uber damages the state and municipal budgets and also risks the wellbeing of its clients. In case of any accidents those are not protected to the degree of professional taxis, since the Uber taxis have only the standard liability insurance.

The CPC procedure against Uber began end-2014 and took more than 6 months. Signals from the Sofia Municipality and from one of the major taxi companies were submitted.

The CPC has recently turned into the institution in charge of many hot potato cases: conflicts due to legislative gaps or the lack of enough control. The commission is currently checking also the so-called koparki (canned sprat), or self-employed taxi drivers, franchising the trademark at tariffs that are 7 – 8 times higher than what’s average for the market.

English version: Zhivko Stanchev