Transport Services Act impact assessment: The Act is enabling digitalisation of transport

The Ministry of Transport and Communications submitted a report to Parliament on 8 December 2022 concerning the longer-term impacts of the Transport Services Act. The report finds that the Act is meeting the needs for change arising from the change in transport sector.

The Transport Services Act took effect in stages over the period from 2018 to 2019. It integrated regulations governing the transport market, while opening up the market and helping industry operators to benefit from digitalisation. This enabling legislation sought the emergence of digitalisation in transport, new transport services and travel chains.

The retrospective evaluation suggests that the Transport Services Act is meeting the needs for change arising from the changes in transport sector, and that the ambitious goals of the Act were therefore appropriate.

Taking the transport system as a whole, the Transport Services Act has opened up data and interfaces. It has also opened up the market for goods transport by road and for public transport, especially in the taxi services sector. At the same time, the entry of new operators into the market was also enabled.

Transport Services Act seeks an improved transport market

The Transport Services Act opened up the transport market by clearing away some obstacles to market entry and regulations that limit competition. It also established conditions for applying transport operator data and public authority data pools more effectively.

Examples of this include progress in using various applications, journey planning applications and data throughout the transport sector. Significant progress has been made in opening interfaces and in data interoperability, establishing improved conditions for the emergence of new services.

The Transport Services Act has also improved operating conditions for businesses engaged in postal, delivery and courier operations. It has also become easier to provide professional transport services using vans.

The Transport Services Act has brought a visible increase in competition in the taxi services sector with the entry of new operators into the market and developments in digitalisation. The price range of taxi services has broadened, with average prices rising but cheaper rides also becoming available. The latest information indicates an improved availability of taxi services, especially in urban areas, although some availability problems have been observed in less populous districts away from centres of habitation.

A series of adjustments to taxi regulations took effect in 2021, addressing some shortcomings in taxi operations that had been identified in the Transport Services Act. These changes specifically targeted some anomalies related to safety, combating the grey economy, transparency of pricing, and the availability of taxis. With so little time elapsing since the changes took effect, the newly published retrospective evaluation was nevertheless still unable to include any comprehensive review of the impacts of changes in taxi regulations.

Abridged time frame and COVID-19 pandemic hamper evaluation work

The Transport Services Act sought to bring about significant reforms in the transport system that would always be slow to implement. It is not yet possible to observe all of the impacts of the Act on the transport system as a whole, as so little time has elapsed since the new legislation took effect.

The retrospective evaluation was also hampered by the COVID-19 pandemic, which significantly affected the development of the transport market. The pandemic reduced mobility in an extraordinary way, exerting a major impact on such aspects as the demand for public transport and new transport services.

Parliament called for an evaluation of the Act

When approving the Transport Services Act, Parliament enjoined the Government to submit a report to the Transport and Communications Committee of Parliament on the long-term impacts of the Act by the end of 2022.

The report submitted to Parliament by the Ministry of Transport and Communications relies on a commissioned retrospective evaluation and on such sources as studies of the effects of the Transport Services Act conducted by the Finnish Competition and Consumer Agency. The retrospective evaluation was prepared for the Ministry of Transport and Communications by Frisky & Anjoy Oy, Linea Consultants Ltd and Forefront Ltd.

A report on the short-term impacts of the Transport Services Act published in 2018 was also submitted to the Transport and Communications Committee.

What's next?

No immediate need for major legislative amendments arose from the retrospective evaluation of the Transport Services Act. The evaluation process nevertheless identified a need for further studies of such aspects as the availability of taxi services, the prospects for clarifying the competencies and mission of public authorities that oversee implementation of the Transport Services Act and for improving communications between them, and specification of regulations governing collaboration between ticketing and payment interfaces. There are good general reasons for seeking greater efficiency in monitoring the development of transport markets and services.

It will also be necessary to assess more effective use of various call services and the prospects for improving the availability of taxis, especially in sparsely populated areas.

The experiences of Finland in regulating information on transport services and the interoperability of ticketing and payment systems will be applied in preliminary lobbying related to a Regulation on digital mobility services prepared by the European Commission.

Transport industry legislation does not provide for the implementation of publicly subsidised transport, including services subsidised by the Social Insurance Institution and school transportation. These are regulated under legislation falling within the purview of the Ministry of Social Affairs and Health and the Ministry of Education and Culture. It will be necessary to take immediate measures in partnership with transport industry operators to improve publicly subsidised transport and resolve current problems in order to ensure services that work for their users and to safeguard the efficiency of operations.

Inquiries:

Transport market:

Emil Asp, Director of Unit, emil.asp(at)gov.fi, tel. +358 40 509 9757

Data regulation:

Maria Rautavirta, Director of Unit, maria.rautavirta(at)gov.fi, tel. +358 40 718 5975