Bulgaria’s Commission for Protection of Competition (CPC) has found the local subsidiary of Russian ride-sharing service Maxim to be in breach of competition laws by offering unlawful ride-sharing services.
The regulator fined the company eight per cent of its net revenue for 2018, which is close to the 10 per cent maximum fine that CPC can impose, but in absolute terms the fine only amounted to 3520 leva (about 1800 euro).
CPC said that the service was being offered without observing the legal requirements in place for taxi companies, drivers and taxicabs, which was unfair competition and endangered the safety of its customers.
Maxim has been operating in Bulgaria since 2014, offering ride-sharing services through a smartphone app, media reports have said, a business model identical to the better-known Uber, which made an attempt to enter the Bulgarian market but left after less than a year.
Uber announced the start of operations in Bulgarian capital Sofia in December 2014, prompting an immediate backlash from established taxi service companies, which claimed that they were subject to unfair competition because Uber provided a similar service without being subjected to stringent taxi regulations.
After launching a probe, CPC agreed with those claims and fined two Uber firms 200 000 leva in July 2015, prompting Uber to suspend its services in October 2015. (Uber’s brief foray into Bulgaria did have an impact, as several Sofia taxi firms launched apps to connect customers to available drivers.)
Maxim, despite offering the same type of ride-sharing service, escaped regulatory scrutiny until last year, when local media reported on the company’s operations.
The regulator’s fine can be appealed within a period of 14 days, but its cease and desist order would remain in place for the duration of the appeal.
Several Bulgarian media reported that Maxim said it would look into CPC’s ruling and would consider appealing the decision if it disagreed with the regulator’s findings, but did not intend to stop operations in Bulgaria. It was unclear what legal recourse CPC could use if its cease and desist order was ignored, one report said.
(Taxis at Sofia’s Central Railway Station. Photo: Clive Leviev-Sawyer)