Uber is required to divest a significant part of Dantaxi following intervention by the Danish Competition Council

Christian Schultz, Chairman of the Danish Competition Council, says:

Uber has committed to sell one of Dantaxi’s two dispatch centres. This includes, among other things, taxi bookings via Dantaxi’s app and the phone number 4x48, as well as agreements with several taxi hauliers, collectively covering a significant number of taxis. Uber’s commitments also address several aspects of Uber’s remaining business, including ensuring that taxi hauliers can switch more swiftly to another taxi company. In our assessment, Uber has thereby addressed our concerns.

When Uber entered the Danish taxi market through a cooperation agreement with Drivr, Uber rapidly gained a significant market position, while Drivr attracted many new taxi hauliers from competitors. This strengthened competition in a market that had otherwise been static for many years. With the acquisition of Dantaxi, however, Uber removed the competitive pressure that would have existed between Uber and Dantaxi, and this led us to intervene.

Our investigation has shown that, absent intervention from the Danish Competition Council, there would be a risk of higher prices for customers, less favorable terms for taxi hauliers, and increased barriers to entry for new taxi companies, particularly in and around Copenhagen.

The Danish Competition Council has approved Uber’s acquisition of Dantaxi subject to commitments. It marks the first time the Danish Competition Council has intervened in a merger that has already been implemented, as well as the first time a below-threshold merger has been required to be notified due to the risk of substantial harm to competition.

Uber’s commitments include an obligation to divest a significant part of Dantaxi. The divested business must comprise the following:

• One of Dantaxi’s two dispatch centres and the associated taxi licence
• The Dantaxi trademark
• Taxi rides booked through Dantaxi’s app, the phone number 4x48, and Dantaxi’s website
• Selected business customer relationships
• Agreements with several taxi hauliers collectively covering a substantial fleet

Uber further commits to guarantee the operation of the divested business during the divestiture period and to assist with its transfer to the buyer. The commitments also apply to Uber’s remaining taxi business, including ensuring reduced commitment periods and notice periods for taxi hauliers.

Investigations by the Danish Competition and Consumer Authority (“DCCA”) have shown that, without remedies, the merger would significantly impede competition in the market for private taxi services and have numerous adverse effects. Most notably, there would be a risk of increased prices and lower service quality over time, less favorable conditions for taxi hauliers, and higher barriers to entry for new and growing taxi companies.

The Danish Competition Council’s decision means that Uber’s acquisition of Dantaxi is approved subject to compliance with the commitments. A process now follows, in which Uber must identify a buyer and implement the commitments in its business. This process is being monitored closely by the DCCA. Furthermore, Uber must appoint an independent monitoring trustee to oversee the fulfilment of the commitments.

Read the decision here (in Danish)

For further information

Contact Head of Communications at the Danish Competition and Consumer Authority, Hanne Arentoft, at phone +45 41 71 50 98.