Penalty imposed for Wellington airport taxi cartel conduct

Te Whanganui-a-Tara - The High Court has ordered Hutt and City Taxis to pay a penalty of $150,000 in relation to fixing taxi fare prices in the capital.

The Commerce Commission filed proceedings against Hutt & City in May last year.

The commission alleged, and Hutt & City admitted, that Hutt & City had breached the Commerce Act by agreeing 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 companies discussed the design and distribution of stickers that would display the minimum charge in taxis and Hutt & City distributed the stickers to its drivers and implemented the charge when drivers began receiving the stickers.

The agreement was reached in September 2020 and it took effect in October 2020. The conduct ceased in November 2020, after the commission began investigating.

The High Court imposed penalties of $150,000 against Hutt & City, payable in instalments over the next four years.

The court found the appropriate starting point was within the range of $500,000-$600,000. After considering a discount for mitigating circumstances, the end penalty was further reduced to take account of Hutt & City’s financial circumstances.

The court noted that Hutt & City instigated the agreement and that its directors were aware of it and approved it (with the exception of one director), spoke to the seriousness of the conduct.

Cartel conduct harms consumers by preventing businesses competing to provide better quality services at better prices, and it harms businesses that are trying to compete fairly, the commission says.

Businesses or individuals wishing to report cartel conduct should contact the commission, and  those who consider they may be party to cartel conduct should do so as soon as possible.

The commission can grant leniency to the first member of a cartel who approaches it, provided they meet the requirements for leniency. Immunity against criminal sanctions is also available.

Businesses and individuals can also use the commission’s anonymous whistleblower tool.

A cartel is where two or more businesses agree not to compete with each other.