Costa Rica: Barriers to New Transport Services

The draft regulation in consultation protects current licensees of public transport services, limiting the entry of new and potential suppliers in that market.

Wednesday, January 9, 2013

Taken from the newsletter of Costa Rica’s Commission to Promote Competition (COPROCOM):

COPROCOM opposes the Regulations for the Operation of Special Services for Vehicle Transportation of Persons.

The Commission to Promote Competition (COPROCOM) has issued technical criteria on the "Regulations for the Operation of Special Services for Vehicle Transportation of Persons" document under public consultation by the Public Transport Council of the Ministry of Public Works and Transport.

The aim of the regulation is to regulate the exploitation of special transportation services paid for by individuals in collective vehicles within the country, however, COPROCOM believes that the regulation improperly combines two different transport schemes together, which each serve a different and distinct purpose.

First, the traditional public transport paid for by individual users, which in practice is carried out by companies in response to a public requirement and therefore must answer to special industrial regulations, covering both legal and technical aspects of the provision of a public service.

Secondly, the so-called special transport scheme that this project attempts to regulate under the same principles of the first. This particular mode of transport, which includes among other forms the transportation of students from preschool, primary and secondary schools, actually fills a specific collective transportation need which in every sense differs from the public system paid for by individual users. It is a mode of transport that is essentially immersed in the field of private law, governed by private contracts between parties, which by mutual agreement establish the essential elements of the contract, such as the conditions and the price of the agreement, in which there is full contractual freedom.

COPROCOM believes that there is a contradiction in the general principles of the draft regulation, so it should reconsider the proposal with an appropriate legal framework that fits the reality of special services, aimed at regulating and recognizing that the end users are the backbone of the whole process rather than the licensees.

Regulations covering special services should be limited to ensuring user safety, by establishing technical requirements for transport units and drivers, requiring insurance for passengers, and full payment of tax and social security by the licensee.

However, the draft regulation has a highly protective effect for current licensees of public transport services paid for by individuals, favoring them and closing down the possibilities for current providers of special transportation services, as well as limiting the entry of new and potential suppliers in that market.

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