Transportation

Open Letter to Airline CEOs

June 30, 2020
By Fred Roeder
In Airlines, Recent Media, Transportation
0 comments

To the CEOs of Airlines

CC: ICAO, IATA

Open Letter to Airline CEOs: We consumers want to help you, but you need to adhere to the law and allow easy refunds.

Dear Airlines CEOs of the World,

We, as an international consumer group, and consumers who love global connectivity, know full well the devastating impact Covid-19 has had on the airline industry. 2020 has been a tough year for all of us, and our thoughts go out to the airline employees who have been furloughed, fired, or who may still lose their job as a result of the pandemic.

For us consumers, it is extremely important to have a healthy airline industry that allows us to reconnect to the world and bring us back to the skies so we can visit friends and family across the globe.

The years leading up to COVID-19 saw many new regulations and taxes that made it harder for airlines to operate. Even pre-pandemic times saw record numbers of airlines fail. While industry consolidation is something natural and sometimes even good for consumers, trends such as higher taxes and anti-flying sentiments, such as flight shaming, can be attributed to the weaker financial standing of the industry. And then came COVID…

We have been fighting against higher taxes on flight tickets for years and praised the airline industry as a great enabler of consumer choice and globalization. But while 2020 presents us all with challenges from mental health to job security, we also had to learn the hard way that many players in your industry do not care about contracts, the law, and promises made to their customers.

We all have spent too many hours with your call centers this Spring trying to recoup the money we spent on canceled flights. More often than not Airlines have tried to force consumers into accepting vouchers for future trips.

Giving a consumer an option for a voucher is fine. Incentivizing us to take it instead of the cash refund by adding 10-20% extra value to the voucher is even better. We want to keep you afloat and such deals are a way to get our buy-in. BUT denying us refunds, as many of you still do, is not just against the law but also makes consumers angry. How do we know if we are even able to take off next year to go on that long trip we planned for this year? How do we know that your airline will still be in business? Can I get that voucher insured the same way as I had my original ticket insured against your bankruptcy?

We want to be in the air with you as soon as possible, but please do your part and commit to the rule of law and don’t force us to bring you to court. Hundreds of millions of taxpayers across the world are already helping you through government bailouts. We do our part to advocate for fewer levies and taxes paid on airfares and against silly bans of domestic flights, like the ban being discussed in France right now. This will make the sector more competitive and will allow us, consumers, to fly more with you.

We want to help you to stay in business, but you also need to honor existing rules and refund customers. Building trust is not a one-way street and we need to see strong actions from all of you. Let’s put the frustrations we had with your customer service teams behind us, give us our money back (or at least the choice to get refunded), and conquer the skies together once more.

Sincerely,

Fred Roeder
Managing Director
Consumer Choice Center

Originally published here.

Carta abierta a los CEOs de las aerolíneas

June 30, 2020
By Fred Roeder
In Airlines, Recent Media, Transportation
0 comments

Carta abierta a los CEO de aerolíneas: Nosotros, los consumidores, queremos ayudarlo, pero usted debe cumplir con la ley y permitir reembolsos fáciles.

-Carta abierta a los CEO de las aerolíneas-

Estimados CEOs del mundo de Airlines,

Nosotros, como grupo de consumidores internacionales, y consumidores que amamos la conectividad global, conocemos muy bien el devastador impacto que Covid-19 ha tenido en la industria de las aerolíneas. 2020 ha sido un año difícil para todos nosotros, y nuestros pensamientos están con los empleados de la aerolínea que han sido despedidos, despedidos o que aún pueden perder su trabajo como resultado de la pandemia.

Para nosotros, los consumidores, es extremadamente importante tener una industria aérea saludable que nos permita volver a conectarnos con el mundo y llevarnos de vuelta al cielo para que podamos visitar a amigos y familiares en todo el mundo.

Los años previos a COVID-19 vieron muchas nuevas regulaciones e impuestos que dificultaron la operación de las aerolíneas. Incluso en tiempos previos a la pandemia, fracasaron números récord de aerolíneas. Si bien la consolidación de la industria es algo natural y, a veces, incluso buena para los consumidores, las tendencias como los impuestos más altos y los sentimientos antiaéreos, como la vergüenza de vuelo, se pueden atribuir a la posición financiera más débil de la industria. Y luego vino COVID …

Hemos estado luchando contra impuestos más altos en los boletos de avión durante años y elogiamos a la industria de las aerolíneas como un gran facilitador para la elección del consumidor y la globalización. Pero mientras que 2020 nos presenta a todos desafíos desde la salud mental hasta la seguridad laboral, también tuvimos que aprender de la manera difícil que muchos jugadores en su industria no se preocupan por los contratos, la ley y las promesas hechas a sus clientes.

Todos hemos pasado demasiadas horas con sus centros de llamadas esta primavera tratando de recuperar el dinero que gastamos en vuelos cancelados. La mayoría de las veces, las aerolíneas han tratado de obligar a los consumidores a aceptar cupones para futuros viajes.

Darle a un consumidor una opción para un cupón está bien. Incentivarnos a tomarlo en lugar del reembolso en efectivo agregando un valor adicional del 10-20% al cupón es aún mejor. Queremos mantenerlo a flote y tales ofertas son una forma de obtener nuestra aceptación. PERO negarnos los reembolsos, como muchos de ustedes todavía lo hacen, no solo es ilegal, sino que también enoja a los consumidores. ¿Cómo sabemos si incluso podemos despegar el próximo año para emprender ese largo viaje que planeamos para este año? ¿Cómo sabemos que su aerolínea seguirá operando? ¿Puedo asegurar ese comprobante de la misma manera que tenía mi boleto original asegurado contra su quiebra?

Queremos estar en el aire con usted lo antes posible, pero haga su parte y comprométase con el estado de derecho y no nos obligue a llevarlo a los tribunales. Cientos de millones de contribuyentes en todo el mundo ya lo están ayudando a través de rescates gubernamentales. Hacemos nuestra parte para abogar por menos impuestos e impuestos pagados en las tarifas aéreas y en contra de las prohibiciones tontas de vuelos nacionales, como la prohibición que se está discutiendo en Francia en este momento. Esto hará que el sector sea más competitivo y nos permitirá a nosotros, los consumidores, volar más con usted.

Queremos ayudarlo a mantenerse en el negocio, pero también debe cumplir con las normas existentes y reembolsar a los clientes. Crear confianza no es una calle de sentido único y necesitamos ver acciones firmes de todos ustedes. Dejemos atrás las frustraciones que teníamos con sus equipos de servicio al cliente, devuélvanos nuestro dinero (o al menos la opción de obtener un reembolso) y conquiste los cielos una vez más.

Sinceramente,

Fred Roeder
Director general
Centro de elección del consumidor

Published here.

Tallinn, Estonia leads the sharing economy index globally

Tallinn leads the way as one of the most sharing-economy friendly cities. Its low level of regulation of ride-hailing and flat-sharing services along with openness to e-scooters, and outstanding innovation in the digital space helped take it to the first place. Estonia is well-known for its booming digital state, Consumer Choice Center reports.

The sharing economy has transformed our lives in a variety of ways. Booking holiday accommodation via flatsharing platforms and grabbing our phone to order a rideshare when we are late to a meeting is a habit many of us share. The innovative nature of the sharing economy has led to its undeniable success. But now, those benefits to consumers are often undermined by excessive regulation and taxation. The current COVID-19 pandemic has shown both how much the sharing economy helped consumers access essential goods and services, while at the same time revealing the very real restrictions and regulations that undermine them.

Consumer Choice Center’s Sharing Economy Index is seeking to rank some of the world’s most dynamic cities and to provide a valuable guide for consumers about the sharing economy services available to them.

Originally published here.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Bad Boys of the Private Sector turn into Angels

The ‘Bad Boys’ of the Private Sector turn into Corona-Angels

April 2, 2020
By Fred Roeder
In Blog, Healthcare, Science, Technology, Transportation
0 comments

In light of the Corona virus, businesses that are usually on the top of politicians’ lists to be taxed, regulated, nationalized, or shut down are demonstrating how much value they produce for society.

No need for bailouts, just lower flight taxes

In an attempt to contain coronavirus, governments all across the world have imposed various travel restrictions. As it usually happens, the road to hell is paved with noble goals and good intentions. The airline industry that has made travelling between continents and cities more pleasant, time-efficient and affordable will, unfortunately, be hugely affected by these travel bans.

In fact, the potential damage may end up being so extensive that some legacy and low-cost airlines will cease to exist and cheap tickets will only be a sweet memory from the past. This would be disastrous for consumer choice.

Not all is lost though. There are a number of ways in which governments can help the industry during these trying times. Bailouts usually come first to mind. Airlines for America, the industry association for various U.S. airlines, has already asked for 50bn USD in support. Many more are likely going to follow.

As the government is partly responsible for the upcoming downfall of airlines, it is understandable why airlines would seek its assistance in mitigating the damage. However, every bailout is a redistribution of taxpayers’ money without their consent. Do all taxpayers want their money to be used for saving bankrupt airlines? Have all of them travelled by plane at all? Or maybe they are more concerned with the threats posed by the pandemic and would prefer the government to channel their money into healthcare services? Probably the latter would make more sense given the current situation.

Once travel restrictions are lifted, consumers and passengers are going to be very happy to travel again. And in order to catapult the demand, governments should reduce taxes imposed on the tickets we buy. Not only will this help boost an industry without the need for bailouts, but it will also allow passengers of every income group to visit their families, attend meetings, and travel without any additional barriers.

Every tax imposed on airlines makes the price of flying higher for consumers. Never believe it when governments say they are taxing airlines: it’s actually us consumers who foot the bill. And once the pandemic is over, our subjective value of travelling without limits will increase thus making us appreciate the miracles of air travel way more. We will want to fly more not less. Incentives in the form of lower prices – thanks to lower taxes- will be good news for every consumer.

We’ve started taking flying and travelling as such for granted, and the globalisation that was fostered by it has come under fire in light of the coronavirus outbreak.

But these temporary bad times shouldn’t make us forget about the possibilities of air travel. Many of us are quarantining these days and feel trapped inside the four walls of our apartments. Skimming through our pictures from past travels and daydreaming about being able to visit more places makes it more bearable.

When all this ends, we will want governments to ensure we can fly just like before, and as cheaply as possible. No need for bailouts, just lower flight taxes. This will make our post-coronavirus reality so much more enjoyable and guarantee a strong position for airlines for years to come.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Flight shaming won’t save the planet

January 29, 2020
By Bill Wirtz
In Cheap Flights, Recent Media, Transportation
0 comments

The so-called flygskamers, or ‘flight-shamers’, are everywhere. The flight shaming movement initially started in Sweden, then proceeded to spread its wings (ironically, at first) across Europe.

Some environmentalists are spearheading a social movement seeking to phase out humankind’s most innovative mode of transportation. Their strategy involves shaming those who travel by air into submission by overplaying the impact of aeroplanes on the environment.

Here are some verifiable facts to consider when it comes to global aviation:

80 per cent of aviation CO2 emissions are emitted from flights of over 1,500 kilometres, for which there are no alternatives but taking a plane.

Only two per cent of all human-induced carbon dioxide is emitted as a result of global aviation.

Modern planes are 80 per cent more fuel-efficient than those in use in the 1960s.

1.5 million people in Africa rely on fresh produce delivery by air from the UK alone.

Aviation carries 35 per cent of the value of global shipments, but only 0.5 per cent of the volume. This means that shipments are time-sensitive or very valuable.

The flight-shamers insist that buses and trains can replace their current means of transport. Discounting the substantial additional opportunity costs of these alternatives, let’s consider some more recent facts relating to train travel. Whoever is holding up nationalised rail as an alternative to rail transport should know this:

Just recently, employees of SNCF (France’s state-owned railway company) have been on strike again. Only 1-3 high-speed trains were running during that time, and almost no regional trains ran. The strike was unlimited and unpredictable. People didn’t know if they would be able to come home for the holidays.

Since 1947, there hasn’t been a single year without rail strikes.

Three months of strikes in 2018 cost €790 million, which is higher than its 2017 profits.

Their tickets aren’t cheap. Affordable ones are subsidised by taxpayers (and even by you as a visitor with every purchase you make) so real prices are much higher.

SNCF is €50bn in debt and runs a deficit of over half a billion each year.

There were 400,000 cancellations in 2018.

One-third of intercity and international trains are structurally delayed.

SNCF has paid €20 million in delay fees to rail station operators.

All this applies to an operator that is challenged not by competition but only by its own self-entitlement.

For the Berlin to London, which is a route all sane people travel by plane, a train journey would be excruciating, both on the price and the time. The existing tunnel is London to Lille (1h22). Lille to Berlin with current high-speed connections (SNCF and DB) takes between 11 and 14 hours (factor in SNCF strikes and 25 per cent of DB’s ICE trains being delayed and the timings would be even worse).

That means you’ll end up with four connections and about half a day of travel. That’s only if you’re lucky, which as a regular user of all of these services, I can say with confidence you probably won’t be.

But what about the environment? As ever, technology is leading the way to a brighter, greener future, with the aviation industry developing new and better technologies to clean up air travel.

Airbus’s new A321XLR, for example, has 30 per cent less kerosene consumption per passenger than the previous generation of planes, while adding 30 per cent more range than the current A321neo model.

That should be to nobody’s surprise. Neither the aviation sector and individual airlines have any incentive to use more kerosene than they need to.

The temerity that these campaigners must have to suggest to older people, in particular, that they ought to go back to the old days of disgusting, tiring and nerve-wrenching long train travels is quite rich. What’s worse, however, is distorting the reality of both global aviation and its alternatives.

Originally published here.

Uber seeks injunction against City of Surrey

Uber has asked the B.C. Supreme Court to issue an injunction after Surrey Mayor Doug McCallum promised bylaw officers would fine drivers and the company for operating in the city without a business licence.

Over the weekend, the city issued 18 warnings to drivers and $1,000 in fines to Uber, and the mayor said on Monday that the grace period was over and drivers would be fined, along with the company. Uber’s head of western Canada, Michael van Hemmen, said in an emailed statement that he believes the tickets are illegal.

“The city’s actions are unfair to local residents who want to earn money and support their families. It is also unfair to those who need a safe, affordable and reliable ride,” said van Hemmen.

The requested injunction would prevent the city from fining, ticketing or otherwise sanctioning the company and its drivers for working in Surrey, pending a court hearing. Uber is also asking that the city pay the company’s court costs.

“Our preference is to work collaboratively with municipalities, and we are doing so across the region,” van Hemmen said. “However, Uber must stand up when drivers and riders are being bullied and intimidated, especially when the province has confirmed drivers have the legal right to use Uber’s app, and to earn money driving with the app.”

Read more here

In your face: Planes are getting more efficient but passenger taxes drive airlines out of business

The UK government has apparently just saved the regional carrier Flybe from bankruptcy by delaying over a hundred million pounds of passenger departure tax payments to the UK government and suggesting to lower this tax altogether in the future. Saving a local airline causes these days an outcry not because of government interventionism but the general anti-flying segment also known as flight shaming. Unfortunately the UK government did not move away from their plan to increase the APD for long haul flights by April 1st.

Let’s look at what’s currently happening in the industry when it comes to long haul flights: Following aviation news regularly one can observe a real arms race in the last couple of years on which airline currently holds the record on the world’s longest flight.

Just a few years ago Qatar Airways was the record holder with their Doha-Auckland flight on the newly delivered Airbus A350.

Now Singapore to New York ranks as the world’s longest flight (and yes, there are different geeky ways to determine what “long” means but no need to dig into this here).

Now one can just label these new ultra long haul routes as PR stunts of airlines or the manifestation of big egos of airline executives. But the actual marvel behind this is that flights are getting more and more efficient. This allows airlines to schedule longer flights and spare passengers hours of layovers at random airports on the way home.

And while thousands of private jets will descend into Switzerland for some collective flight shaming at the World Economic Forum in Davos, it is important to point out that flying is getting more efficient. Consumers have more and more choices and additional direct flights allow them to travel faster.

Those demanding less flying and higher taxation on flights are neglecting the fact of ongoing efficiency gains in the aviation industry and at the same time de-democratize flying by making it less affordable for the average consumer.

Conventional jetliners becoming more fuel efficient is an ongoing development and does not need any policy input as it is in the intrinsic interest of airlines to offer more competitive routes and ticket prices.

The next step would be to allow a regulatory framework for supersonic passenger flights. We wrote a paper on this last year.

Why Amazon’s investment in Deliveroo could be good news for consumers

In May 2019 the global e-commerce powerhouse Amazon invested roughly 500 million USD in the British food delivery service Deliveroo leading to a 16% equity stake in that company. The British competition watchdog Competition and Markets Authority (CMA) issued a statement asking both companies for concessions (usually agreeing to sell off some businesses or leave some markets to reduce market shares) in order to see the deal green-lighted. While the battle for leadership in the global ready-to-eat meal delivery market has been on for years, Amazon’s (re-)entry in this market might be excellent news for consumers.

Right now Deliveroo is mainly active in European markets (though it left one of its main markets, Germany, earlier this year due to labor disputes) and currently expands into Asian countries. It competes with similar companies such as UberEats or Delivery Hero. As an early adopter of such services I have tried most of them in various European cities. One common weakness of their offering can be seen in their predominating business attitude of focussing more on acquiring and keeping more restaurants on their platform instead of servicing their (ordering end-) customers.

Some of the poor customer experience can be seen in the lack of standardized (or non leaking) packaging and usually little to no help in case of missing items, cold food, or massive delays. Customer service usually tells you that they are merely the broker and are not liable for the restaurants faults. And while the platforms usually refund you for missing food, this is usually not what you want when you are very hungry on a Friday evening and need to rush to the movies (such a situation and a no-show of my pizza was when I deleted Deliveroo from my phone).

Amazon tried restaurants once before and failed in the UK market. They might have been too early or were not able to get sufficient market shares quickly enough. Their new and very pricey attempt to get back into the European ready-to-eat meal delivery should be applauded by consumers:

Amazon is one of the most customer-centric companies out there. The consumer is usually always right and Amazon is there to make it right. Amazon’s grocery service Fresh is a great example on how to constantly provide customer service on a high level.

That consumer focus is currently lacking in the food delivery sector. A strategic investment in food delivery companies with combined know how transfer and keeping the importance of the end user in mind could really bring food deliveries to the next level. Great for everyone who does not have time to cook a meal every evening!

Apparently the CMA sees this differently. The BBC reports:

But, on Friday, the regulator said Amazon had failed to deal with "initial concerns that their investment in Deliveroo could be bad for customers, restaurants and grocers".

The CMA is worried that Amazon's plans to invest in Deliveroo could stop it from launching a rival company, which would increase competition and potentially lower prices for consumers.

If competition watchdogs now stop any attempt of horizontal integration of companies because they are worried that this would stop the creation of new companies we would open the floodgates of antitrust litigation.

“There are relatively few players in these markets, so we’re concerned that Amazon having this kind of influence over Deliveroo could dampen the emerging competition between the two businesses.”
CMA executive director Andrea Gomes da Silva

Let’s also keep in mind that the meal delivery market is losing hundreds of millions a year in the UK alone. The CMA stopping consolidation of the market will also prevent this sector to turn profitable in the near future – and that could jeopardize the success of this entire industry in Europe.

Source: https://www.statista.com/statistics/760546/deliveroo-income-loss/

I really hope that the CMA will listen to consumers that actually use food delivery services and don’t just stick to the old antitrust textbook of an analogue world or the pressure from brick and mortar retailers who might have missed the train of going digital and convenient. A dash of Amazon’s customer-centricity might make me reinstall Deliveroo and use it for good.

Germany’s Uber ban is bad for consumers and the environment

Today a court in Frankfurt effectively banned Uber in all of Germany. The company Taxi Deutschland, a licensed taxi app, went to court arguing that Uber requires a license. The court agreed with Taxi Deutschland’s interpretation of the legal situation.

For the last couple of years, Uber was able to operate in Germany by working with subcontractors that complied with the German rental car and chauffeur services regulations. That law also mandates the driver to drive back to a dispatching station after every single ride. This is of course not just expensive but also terrible for the environment and just adds additional cars to already congested roads. The plaintiff was able to prove that many Uber drivers do not drive back empty to their dispatching station but keep picking up passengers. While this is good news for the environment, roads, and passengers, it is bad legal news for Uber. Policy makers should realize that this is an outdated regulation and update it according to the realities of many consumers preferring Ubers to licensed taxis.

Uber entered the German market in 2013 and for the last six years politicians kept complaining about Uber not being fully compliant with German laws. Updating these outdated, anti-competitive, and unecological laws did somehow not happen. Instead of legislative changes we see the old-school taxi lobby pushing their special interest successfully through German courts.

The court in Frankfurt also questions whether Uber is merely a platform connecting drivers with passengers or actually the provider of the ride. A spokesperson of the court said that consumers are not aware of Uber being merely a platform. One can only assume that the judges have never used an Uber as to everyone who was in an Uber and had a conversation with their driver it is pretty obvious that the drivers and independent contractors and not employees of Uber.

No one is forced to use an Uber!

In the heated debate about whether ride hailing services such as Uber or Lyft should be banned many people suggest that they aren’t safe as the drivers are not licensed taxi drivers. And while there are definitely black sheep among Uber drivers one can at least be assured to be GPS-tracked during the entire ride and one can give feedback to Uber about bad behavior. More important is that the dimension of choice does not appear in the debate at all: No one is forced to use an Uber. So those who dislike Uber should just not use their services and keep walking, cycling, or taking a cash-only overpriced and smelling Taxi. But those who prefer to use the Ubers of the world should be allowed to choose as well.

Fighting for consumer choice since Summer 2014

I was probably one of the first Uber customers when they started in Berlin. I just loved that I didn’t need to have cash on me and usually spent 30% less than in a yellow cab. When in Summer 2014 taxi drivers all over Europe went on a symbolic strike against the new competition from Uber, two friends of mine and I took an Uber (and paid it out of our own pockets) to the taxi manifestation in front of the olympic stadium in Berlin. We countered the 1,000 taxi drivers protesting by endorsing competition and made some headlines that day.

On the other side you can clearly see that some taxi drivers weren’t happy at all about consumers fighting for their right to choose. Just look at this very angry driver:

The fact that there were literally no consumer groups that stood up for customers like us who wanted to be able to choose between Uber and taxis was one of the reasons why we went on and several years later started the Consumer Choice Center.

There are many outdated regulations that don’t reflect consumer preferences and just serve special interests. In cases like Uber bans this is not just bad for consumer choice but also for the environment and traffic.

My big appeal to German politicians is to update legislation and create a solid framework in which innovative companies such as Uber and Lyft can compete with legacy industries such as licensed taxis. Or as we say in German: Macht die Bahn frei für Wahlfreiheit im Taximarkt!

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