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Commerce Commission files proceedings against alleged Wellington taxi cartel

The Commerce Commission has filed proceedings at the High Court in Wellington against Hutt and City Taxis Limited for alleged price fixing. 

File picture. Source: istock.com

The Commission alleged Hutt and City contravened the Commerce Act by reaching a price fixing agreement with two competing companies to implement a minimum $25 charge for pick-up trips from the on-demand taxi rank at Wellington Airport. 

The agreement was reached in September 2020 and took effect a month later in the wake of discussions in previous years, the Commission alleged. 

The fare was allegedly implemented through the distribution of stickers displaying the minimum charge on taxis. 

After the Commission began investigating in November 2020, this stopped. 

It is also alleged Hutt and City attempted to reach the same price fixing agreement with a third taxi company.

The Commission is seeking a declaration Hutt & City contravened, and attempted to contravene, the Commerce Act, along with financial penalties and costs.

The Commission has also issued warnings to four former directors of Hutt and City over their role in the conduct. 

They are Rahid Amin, Sathishkumar Dharndapani, Dharmendra Krishnan and Paul Swain.

In the Commission’s view, the four former directors of Hutt and City likely have accessory liability for its alleged contravention of the act.

A warning has also been issued to a separate company Kiwi Cabs Limited (Kiwi Cabs), over its role in the conduct.

"Cartel conduct harms consumers by preventing businesses from competing to provide better quality services at better prices, and it harms other businesses which are trying to compete fairly," Commerce Commission chairwoman Anna Rawlings said. 

"It is important that businesses and their directors are aware of the seriousness of this kind of conduct, and ensure they understand how to stay on the right side of the law."

Cartel conduct is now punishable with a term of imprisonment of up to seven years.

Conduct which occurred before April 8 2021, like the alleged conduct in this case, is not subject to these new penalties.