July 18, 2018

UBER and Taxify controversy in Slovakia

In 2018 Bratislava I District Court ruled to preliminarily prohibit the use of UBER in Bratislava, while in another ruling, it allowed Taxify to provide its services in Bratislava without any restrictions. These rulings created a situation whereby Taxify may continue to provide its services outside of the regulations that apply to traditional taxi services, even though its core principles are similar to the now prohibited UBER.

Since the liberation of the market in 1991, private personal transportation in Bratislava has been provided by various taxi services that have effectively controlled the whole market. This market control was unchallenged until 2015 when the wave of enthusiasm over shared economy hit the city in the form of an UBER app, soon to be followed by a similar Taxify app.

Many young users of these apps were thrilled when both UBER and Taxify started to provide their services in Bratislava and praised how affordable and fast the service was in comparison with traditional taxi services. However, traditional taxi services didn’t share the customers’ enthusiasm and protested that while they have to abide by state regulations to provide their services, UBER and Taxify do not.

Traditional taxi services in Bratislava united under their association “Občianske združenie koncesovaných taxikárov” and took their case with UBER to Bratislava I District Court and filed for a preliminary ruling against UBER to prevent it from providing its services.

On February 16, 2018 the Bratislava I District Court ruled in favour of the Association and issued a preliminary ruling in which it forbid UBER from providing its services via their app, unless they acquire all of the necessary licenses required for any other taxi service.

Among other arguments the Court emphasized that there is no reason for UBER not to follow the state regulations required for a taxi service license and that allowing UBER to provide its service without having to follow the regulations would constitute an infringement of competition rules on the Bratislava market.

Encouraged by their success against UBER the Association turned their attention to Taxify and filed another request for a preliminary ruling, this time against the company Taxify, seeking to ban their service in Bratislava. However, on March 22, 2018 Bratislava I District Court ruled against the Association and allowed Taxify to continue providing its services in Bratislava.

In the case of Taxify the Court did not argue that Taxify is in its core different from UBER or that Taxify does not have such an effect on the market that there would be the need of a preliminary ruling against it. The court even admitted that there may very well be a strong analogy between UBER and Taxify. The main reason why the Court ruled against the Association, as the Court itself specified, was that in its opinion the Association did not provide the Court with sufficient explanations and evidence to prove an analogy between the cases of UBER and Taxify.

On April 23, 2018 seeking to overturn the previous preliminary ruling of the Court, the Association filed another request to preliminarily prohibit Taxify from providing its services in Bratislava. However, the Court denied the Association’s request again, this time due to res iudicata (a matter already judged) stipulated by the first ruling in favour of Taxify. The Court concluded that the content of the Association’s second request was in fact the same as the content of their first request, which had already been denied by the Court so there was no reason to accept the Association’s second request.

This effectively means that the only way for the Association to overturn the preliminary ruling is to file a standard lawsuit against Taxify and prove that Taxify is running its business in violation of the law, in a legal battle that may very well take several years, during which Taxify may continue its business activities in Bratislava while UBER cannot.

While there has always been a lot of controversy surrounding the legality of these shared economy services, these contradicting rulings created an even more complicated legal environment in which some will be able to continue to provide services and others might be prohibited from doing so.

All sides of the dispute can now finally agree that the current situation harms all providers as well as customers, and can now only be resolved by adopting of a new law aimed at creating a new, more flexible and fair framework for shared economy services, such as UBER or Taxify as well as traditional taxi services to work in.

By Michal Martinák, Partner at CEE Attorneys Slovakia