On 12 December, the Economic Affairs Committee of the Riigikogu (Parliament of Estonia) sent the bill regulating on-demand ride sourcing to the factions of the parliament for examination, and expects their feedback and proposals by 23 January next year. The bill regulates the organisation of providing of on-demand ride sourcing service by natural and legal persons and simplifies the requirements for taxi service.
In the opinion of Chairman of the Economic Affairs Committee Aivar Kokk, on-demand ride sourcing is a sub-category of public transport, and its main difference from the taxi service lies in the fact that on-demand ride can be ordered only through an electronic platform and paid for only electronically. “When the bill was prepared, it was taken into account that the providers of on-demand ride sourcing service should have their legislative framework and the requirements to taxi drivers should not be too strict. At the same time it is necessary to guarantee the safety and security of passengers,” Kokk said, and added that after the factions have submitted their proposals, they would be discussed with the stakeholders in order to reach consensus agreements.
Pursuant to the bill, the user of the on-demand ride sourcing service would get information about the cost of the ride and the assessment given to the service provider through an electronic platform before the ride started. After the ride, it would be possible to give feedback to the platform. Unlike taxis, the cars used for providing on-demand ride sourcing service would not have an illuminated sign or equipment for calculating the price of the ride. Because of these two differences, the providers of on-demand ride sourcing service are not allowed to use public transport lanes and taxi stops.
Pursuant to the bill, the providers of on-demand ride sourcing service have to submit notice of business activity to the Register of Economic Activities.
The bill sets requirements to the providers of on-demand ride sourcing service – they have to comply with the requirement of good repute, have a valid category B driving licence, and be the owner or authorised user of the automobile used for providing the service.
“The initiators of the bill wished to regulate on-demand ride sourcing as simply and understandably as possible. If the requirements are made too strict, it will endanger the development of new economy in Estonia,” member of the Economic Affairs Committee and one of the initiators of the bill Deniss Boroditsh said.
Application for an operator’s card will be simpler and the requirements of training are made easier for taxi drivers. Pursuant to the bill, the scope of taxi driver training course will be reduced, the professional certificate in its physical form will be abolished and passing of the training course will be proven on the basis of the register. In connection with that, the state fee for issuing professional certificate will be abolished.
It is also planned to give the taxi drivers the right to use four time periods for pricing of service during twenty four hours.
The Bill on Amendments to the Public Transport Act, the Traffic Act and the State Fees Act (188 SE), initiated by 26 members of the Riigikogu, provides that the notification obligation of providers of on-demand ride sourcing service will enter into force on 1 September next year and paying for the service by way of electronic payment will be implemented in the beginning of 2018.
Discussion at the sittings of the Economic Affairs Committee on 15 November
At the discussion of the bill regulating on-demand ride sourcing on 15 November, the Economic Affairs Committee of the Riigikogu (Parliament of Estonia) arrived at common understanding that the bill would not establish the limit of 16,000 euro on turnover.
Chairman of the Economic Affairs Committee Toomas Kivimägi said that, at today’s sitting, the Committee also reached an agreement on who would have the right to provide on-demand ride sourcing service. “The prevailing opinion was that the bill that is prepared for discussion in the factions would enable both natural and legal persons to provide on-demand ride sourcing service. In the case of legal persons, there would be a reservation that the service can be provided only by the authorised user of an automobile, and nobody else,” Kivimägi said.
“This position was also supported by the representative of the Ministry of Justice, who thought that restricting the possibility to provide on-demand ride sourcing service to only natural persons or self-employed persons would have no legal basis,” Kivimägi added.
In the opinion of Member of the Economic Affairs Committee Erki Savisaar, it would be better from the point of view of clarity if on-demand ride sourcing would be provided only by natural persons. “Ride sharing and taxi service should be clearly distinguishable services. The purpose of ride sharing is first of all putting your property to a better use, not providing this service as the main activity,” Savisaar said.
At the sitting of the Economic Affairs Committee, reporting obligation of on-demand ride sourcing through the Register of Economic Activities was discussed as an alternative; the earlier opinion was that reporting should take place through the Tax and Customs Board.
Representatives of the Ministry of Economic Affairs and Communications and the Ministry of Justice participated in the discussion of the Bill on Amendments to the Public Transport Act (188 SE), initiated by 26 members of the Riigikogu.
Discussion at the sittings of the Economic Affairs Committee on 7 and 8 November
The Economic Affairs Committee of the Riigikogu (Parliament of Estonia) discussed amendments to the bill regulating on-demand ride sourcing at its sittings on 7 and 8 November, and reached a consensus on reporting obligation, electronic payment only and giving of feedback.
“Most of the members of the committee admitted that ridesharing service differs from classical taxi service and requires a separate regulation. Pressing new business models into the existing frames restricts the freedom of enterprise and initiative,” Chairman of the Economic Affairs Committee Toomas Kivimägi said.
The Economic Affairs Committee was of the opinion that the providers of on-demand ride sourcing service should have the obligation to report to the Tax and Customs Board on starting with providing this service.
The Committee agreed with the representative of the Estonian Traffic Insurance Fund that when a vehicle starts providing on-demand ride sourcing service, the Fund should get information about it through the Tax and Customs Board.
Pursuant to the bill, the ordering of on-demand ride sourcing can be done only through information society services, and the provider of service is obliged to confirm the order through the same channel. This precludes ordering on-demand ride sourcing service from the street, car park, public transport stop, by telephone or using other such channels.
Pursuant to the amendment discussed in the Committee, the consumer has to have clear and understandable information about the price of ride offer, including maximum price. Transactions in cash are also precluded in order to guarantee as much transparency as possible about the payments both to the consumers and for supervision.
The bill provides for creating a feedback system so that the passengers would have the possibility to assess their satisfaction with the ride and make it known to the next passengers.
Next week the Committee will discuss whether on-demand ride sourcing service can be provided by natural persons only, or would it be allowed also to legal persons. It is also planned to discuss whether it would be practical to impose a 16,000 euro limit on turnover.
“Keeping in mind that the conditions for on-demand ride sourcing service providers are made stricter, there is no reason to impose a limit on turnover or confine the circle of providers of service to natural persons only,” Kivimägi noted.
“I believe that at the end of this month, the Economic Affairs Committee will send the bill to the Riigikogu for the second reading. We are very close to reaching an agreement, and I very much hope that the change of coalition will not be an obstacle here,” Kivimägi added.
Representatives of the Ministry of Economic Affairs and Communications, Tax and Customs Board, Estonian Insurance Association and the Estonian Traffic Insurance Fund participated in the discussions on the Bill on Amendments to the Public Transport Act (188 SE), initiated by 26 members of the Riigikogu.
Economic Affairs Committee is discussing proposals to the bill concerning on-demand ride sourcing
On 16 May, the Economic Affairs Committee had a constructive discussion with interest groups on the issues related to the legalisation of on-demand ride sourcing. Chairman of the Committee Toomas Kivimägi said that the positions of the interest groups had become closer, but there were still differences of opinion. The positions regarding the bill can be found on the web page of the Bill.
The representatives of the Estonian Taxi Drivers Association, the Estonian Sharing Economy Association, the Union of Estonian Automobile Enterprises, Tallinn Transport Department, the Estonian Traffic Insurance Fund and the Ministry of Economic Affairs and Communications participated in the sitting of the Economic Affairs Committee.
On 19 May, the seminar “Innovation in Transport Solutions: from Sharing Economy to Self-driving Cars”, organised by the European Union Affairs Committee, was held at the Riigikogu. European Commissioner for Internal Market Elżbieta Bieńkowska delivered the opening speech of the seminar.
The seminar dealt with the existing practice of sharing economy and innovative ideas, and tried to find answers to the questions what the role of transport sector in the EU climate policy was, and how to reduce the energy dependence and environmental impact of this sector.
Bill concerning on-demand ride sourcing passed first reading in Riigikogu
On 19 April a Bill amending the public Transport Act, which would allow the provision of on-demand ride sourcing services, and simplification of certain requirements for taxi service, passed the first reading in the Riigikogu.
The aim of the Bill on Amendments to the Public Transport Act (188 SE), initiated by 26 members of the Riigikogu, is to ensure security and reliability of on-demand ride sourcing services. For that, the Bill provides for the establishment of the relevant minimum requirements for providers of on-demand ride sourcing services and for an electronic on-demand ride sourcing system. Also, in the drafting of the Bill, it has been taken into account that on-demand ride sourcing should as much as possible take place without interference from the state, and according to market conditions. In the opinion of the initiators of the Bill, the current Public Transport Act is not in conformity with the new digital services that facilitate urban mobility.
The Bill will also simplify the requirements for taxi drivers, and delegate responsibility and supervision more to the manager of taxi service. The legislative amendments planned should open the taxi service market to competition which is less weighed down by requirements which have proved extremely problematic to be met and supervised also in practice.
Applications that use mobile communications technology, geopositioning, and non-cash payments are technologies that are actively used in the carriage of passengers already in Estonia, too. At present, Uber and Taxify are the largest operators of the electronic on-demand ride sourcing system in Estonia. The initiators of the Bill note in the explanatory memorandum that, owing to the popularity and wide availability of the technological solutions used, it is necessary to update this area of public transport and to ease the current regulation which prohibits the provision of on-demand ride sourcing services.
Kalle Palling, who took the floor on behalf of the initiators of the Bill, said that, when the Act is passed, the term ‘on-demand ride sourcing’ will be introduced into the Estonian legal language. “Sharing economy gives consumers more options, creates flexible opportunities to earn additional income, promotes people to engage in micro-enterprise, and all in all improves the tax receipts of the state sector,” Palling said. He added that motions to amend would be made between the first and the second reading, and the Economic Affairs Committee was organising very broad-based inclusion which involved the whole sector.
Toomas Kivimägi, who made a report on behalf of the Economic Affairs Committee, said that the committee had found that if people who offer the sharing service earn additional money alongside their principal jobs, then it is certainly a welcome opportunity for additional income. “A separate question is how to define this ride sharer after all. And maybe a very principal question, that needs a clear position and answer, is whether to restrict the volume of the ride sharing service or not,” Kivimägi said. “In addition, the Economic Affairs Committee had a question of who will exercise supervision over the provision of this service, if it is sharing economy or on-demand ride sourcing. The Committee also discussed whether some kind of separate form of enterprise should be established for this form of enterprise, and whether we should equalise the classical taxi service and ride sharing.”
The members of the Economic Affairs Committee supported the legalisation of on-demand ridesharing, but as it is the first bill in the area of sharing economy, it was decided to continue discussing the principles of the bill and to be open to proposals for amendments.
Discussion at the Economic Affairs Committee
The Economic Affairs Committee of the Riigikogu (Parliament of Estonia) decided by consensus to send the bill regulating ridesharing service, or on-demand ridesharing, to the first reading at the plenary sitting of the Riigikogu on 19 April.
The Committee reached the position that the law should make a distinction between professional taxi drivers and the drivers providing ridesharing services, and differentiate their rights and obligations. The possibility of establishing a simpler form of economic activity for ridesharers, e.g. micro-undertaking, or amending the regulation on self-employed persons in the Commercial Code was also considered.
In the opinion of Chairman of the Economic Affairs Committee Toomas Kivimägi, ridesharing and taxi services are so different that complete unification of the standards of both services at the level of law is not justified. “Ridesharing already exists on the market today, and it will not be prohibited by any decision. The issue is rather whether or not we should regulate it at the level of law. It would be reasonable to legalise it, in order to ensure the quality of service and regulate the requirements for electronic platforms,” Kivimägi said.
On 25 February, 26 members of the Riigikogu initiated the Bill on Amendments to the Public Transport Act (188 SE) with the purpose of establishing minimum requirements to the providers of ridesharing services and the system of electronic ridesharing. When the Bill was prepared, it was taken into account that ridesharing should as much as possible take place without the interference of the state and in accordance with the market conditions.
The initiator if the Bill, member of the Economic Affairs Committee Kalle Palling said that ridesharing was a combined information society and transport service where the user could find out the cost of the ride through electronic platform before the ride started. “Regulation of ridesharing will create a possibility for people to earn additional income. The state must create a regulation to support the enterprisingness of people, regulate the services, protect the consumers and collect the taxes,” Palling said.
In the opinion of member of the Economic Affairs Committee Erki Savisaar, it is important to regulate the issues related to electronic platforms and taxation. “Any programme or app can be made to cheat, and in order to avoid that, requirements have to be established for electronic platforms. The possessor of the platform could be an Estonian enterprise, so that taxation issues would be under control,” Savisaar said.
The Government has in principle supported the Bill. Today the Economic Affairs Committee discussed the Bill with the representatives of the Ministry of Justice, Ministry of Economic Affairs and Communications, Ministry of Finance and the Tax and Customs Board. The Economic Affairs Committee plans to continue the discussions on the legalisation of ridesharing by involving the interest groups and government agencies. The deadline for motions to amend the Bill is 10 May.
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