Black cabs in the bus lane – does this involve State aid?

The question: In Eventech (C-518/13) the Court of Justice of the EU (CJEU) was asked the rather intriguing question: does the practice of permitting London black cabs to use bus lanes whilst prohibiting private hire vehicles (PHVs) from doing so appear to involve the granting of State aid?

Quick answer: Although the CJEU must leave the ultimate decision to the UK Court of Appeal (as the referring court), the CJEU decided that the practice does not appear to involve State aid. The CJEU concluded:

“The practice of permitting, in order to establish a safe and efficient transport system, Black Cabs to use bus lanes on public roads … while prohibiting PHVs from using those lanes, except in order to pick up and set down passengers who have pre-booked such vehicles, does not appear … to be such as to involve a commitment of State resources or to confer on Black Cabs a selective economic advantage for the purpose of Article 107(1) TFEU.”

Longer answer:

Transport for London (TfL) rules permit black cabs to use bus lanes during peak times but prohibit PHVs from doing so (except to pick up pre-booked passengers). Eventech is a subsidiary of Addison Lee Plc, a PHV firm which operates in London.  The previous Chairman of Addison Lee instructed its drivers in April 2012 to use the bus lanes and offered to pay any fines that they received.

When the fines arrived, Eventech challenged them before the High Court in 2012 by way of judicial review, arguing that the ban on its drivers using the bus lanes was anti-competitive and breached European law (on the basis that it is prohibited State aid). The High Court dismissed the judicial review, Eventech appealed, and the Court of Appeal referred the question above to the CJEU.

The general prohibition on State aid is contained in Article 107(1) TFEU. Under Article 107(1), State aid has four characteristics:

  1. it is granted by the State or through State resources;
  2. it favours certain undertakings;
  3. it distorts or threatens to distort competition; and
  4. it affects trade between Member States.

The arguments before the CJEU in Eventech touch upon the first two of these characteristics: does the policy of allowing black cabs to use bus lanes whilst prohibiting PHVs from doing so:

  1. involve the use of State resources?
  2. favour certain undertakings?

The CJEU answered both of these questions in the negative.

On the first characteristic the CJEU reasoned that there is no obligation on the State to impose a charge for access to public infrastructure. As a result, the decision not to charge a penalty to black cab drivers was not a burden on public authorities which involved the use of State resources.

As to the second characteristic of preferential treatment, the CJEU looked at the factual and legal differences between black cabs and PHVs, most notably the rule that black cabs are permitted to ‘ply for hire’ (pick up passengers who have not pre-booked) whereas PHVs can only pick up pre-booked passengers. The CJEU concluded that black cabs and PHVs were suitably distinct categories and so were not comparable when looking at the question of selective advantage.

For more blogs on procurement and state aid, click here.

 

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