Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Staff Submits Comment Opposing Colorado’s Transportation Rules Proposal, (Mar 11, 2013)

By E. Darius Sturmer, J.D.

Staff of the FTC Office of Policy Planning, Bureau of Competition, Bureau of Consumer Protection, and Bureau of Economics submitted written comments to the Colorado Public Utilities Commission last week expressing concern that proposed regulatory changes may hurt competition in the marketplace for passenger vehicle transportation services. In a March 6 letter, the staff stated that the changes could inhibit the use of mobile smartphone software applications that allow consumers to arrange and pay for transportation services in new ways.

The FTC staff comments were sent in response to a proposal to make three changes to the Code of Colorado Regulations. One would create a barrier to the entry and operation of independent smartphone applications that match customers with transportation services. According to the staff comments, this change would create an obstacle for applications that are not also motor carriers, and may inhibit, impair, or preclude new and innovative ways in which independent applications might partner with providers of taxicab and other transportation services.

Another proposed change would require charter contract services, such as stretch limousines and executive cars and vans, to use a specific fixed price. The FTC comments stated that this change would prevent companies from adopting new forms of variable pricing that might be more responsive to consumer demands for transportation service.

A third proposed change would prohibit stretch limousines and executive cars and vans from stationing themselves within 200 feet of a hotel, motel, restaurant, bar, taxicab stand, or airport passenger pickup point unless a passenger pick-up has been prearranged and a completed charter order is in the vehicle. The comments stated that this proposed change likely would prevent many consumers from using a smartphone application to get transportation service quickly, especially in downtown and “urban village” areas.

In contrast to these types of prohibitions, the staff comments recommended that a motor vehicle regulatory framework should be flexible and adaptable in response to new and innovative methods of competition, such as smartphone applications for arranging transportation, while still maintaining appropriate consumer protections. The comments further recommended that CPUC be guided by the principle that any restriction on competition designed to address potential harm should be narrowly crafted to minimize its anticompetitive impact.

News: Antitrust ConsumerProtection FederalTradeCommissionNews