Sunday, May 26, 2024

Commission files proceedings against alleged taxi cartel

The Commerce Commission has filed proceedings at the High Court in Wellington against Hutt and City Taxis Limited (Hutt & City) for alleged price fixing.

The Commission alleges Hutt & City contravened the Commerce Act by reaching a price-fixing agreement with two competing taxi companies to implement a minimum charge of $25 for pick-up taxi trips from the on-demand taxi rank at Wellington Airport. 

The Commission alleges the agreement was reached in September 2020, following initial discussions in previous years, and that it took effect in October 2020. It’s alleged the fare was implemented through the distribution of stickers displaying the minimum charge to be placed on taxi vehicles. The conduct ceased in November 2020, after the Commission began investigating. 

The Commission also alleges Hutt & City attempted to reach the same price-fixing agreement with a third taxi company.

It is seeking a declaration that Hutt & City contravened, and attempted to contravene, the Commerce Act, along with financial penalties and costs.

The Commission has also issued warnings to four former directors of Hutt & City over their role in the conduct:

*    Mr Rahid Amin;
*    Mr Sathishkumar Dharndapani;
*    Mr Dharmendra Krishnan, and
*    Mr Paul Swain.

In the Commission’s view, the four former directors of Hutt & City likely have accessory liability for Hutt & City’s alleged contravention of the Commerce Act.

A warning has also been issued to a separate company Kiwi Cabs Limited (Kiwi Cabs), over its role in the conduct.

“Cartel conduct harms consumers by preventing businesses from competing to provide better quality services at better prices, and it harms other businesses which are trying to compete fairly,” said Commerce Commission Chair, Anna Rawlings. 

“It is important that businesses and their directors are aware of the seriousness of this kind of conduct, and ensure they understand how to stay on the right side of the law.”

Cartel conduct is now punishable with a term of imprisonment of up to 7 years, underlying just how serious and harmful offending of this nature can be. Conduct which occurred before 8 April 2021, like the alleged conduct in this case, is not subject to these new penalties. 

Copies of the warning letters can be found on the Commission’s website

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