The prices of VTC services to and from the Mad Cool festival increased by up to five times during the arrival and departure times, although, on average, their cost was between two and four times the minimum prices.
These are some of the main data contained in the report ‘Effects of the Mad Cool music festival on the prices of taxi and VTC services in Madrid’, prepared by the company Games Economics for the National Taxi Association (ANTAXI) and the Professional Taxi Federation (FPTM), which was presented this Monday and which analyses the behaviour of the prices of these services during the last edition of this festival, held last July.
“The study shows that, while a journey from the festival to Plaza Castilla in a VTC service cost 93 euros, the same journey in a taxi cost no more than 37 euros. This shows how the algorithm is, to a certain extent, a lottery,” said Juan Delgado, general director of Games Economics.
In contrast, taxi fares, being regulated by the administration, remained virtually stable and were only altered by traffic congestion.
Taxi fares remained stable during the festival
During the same event, the report ‘Analysis of the prices of VTC services contracted through a platform in Madrid: price formation and volatility’ was also presented, which analyses the formation process and the predictability of the prices of these services, in comparison with taxi service prices.
In this sense, the report shows how the prices of VTC services, unlike those of taxis, which are established transparently according to regulated public tariffs, are determined in an opaque and arbitrary manner. According to the study data, although the platforms publish the minimum fares and those established per kilometre and minute to determine the base price, this varies considerably as the base fares vary depending on the route, with no known criteria. In addition, the “high demand” surcharge is applied frequently and with a variable magnitude.
“There is total opacity and arbitrariness when it comes to applying both the base price and the high demand supplement, which can multiply the price of a journey by up to two and a half times, as reflected in the data,” explained Delgado.
Lack of transparency in VTC services, says Sanz
In this sense, Sanz added that “the inattention of the political leaders in correcting issues such as the lack of transparency of this price setting is detrimental to the user, making them totally unprotected. On this point, the administration is responsible for putting this situation right”.
Another aspect reflected in the report is the variability of VTC service prices, which, as the data shows, is much higher than taxi prices. Thus, while public service fares vary by around 15% of the average price depending on traffic congestion, a consequence of the regulation to which they are subject; VTC service prices can be up to twice the average taxi price.
“Regulated fares offer security and certainty, which is essential in urban transport because the user knows in advance what he/she has to pay, whether it is the weekend, day, night or rain. Taxis offer security and certainty that they will always work,” concluded Sanz.