Competitors furious over use of municipal buses for charter services
Tallinna Linnatranspordi AS (TLT), which receives tens of millions of euros in annual subsidies from the city, also offers rides outside Tallinn, providing charter services with publicly funded buses at prices up to 40 percent lower than its competitors, Delfi reports.
In 2021, TLT received nearly €896,000 in targeted funding to purchase three school buses, which are used not only to transport students but also to offer charter services, such as for summer outings held outside Tallinn.
Private bus companies also operate in the same market, but they do so entirely at their own expense and risk and cannot offer prices as low as TLT's.
A representative of a private bus company who wished to remain anonymous said that while the three publicly funded school buses may not have a decisive impact on the market, the issue is one of principle: "If there is no market failure in the sector — meaning private companies are able to provide charter services in a highly competitive environment and there are actually more buses than needed — then offering charters with publicly funded buses is unnecessary."
Although TLT claims it positions itself in the higher price category of the charter service market, price inquiries conducted by Delfi show the opposite: TLT offers the cheapest option for transporting groups of more than 30 people from Tallinn to places like Central Estonia.
According to TLT board member Andrei Novikov, these charter services make up an insignificant portion of the company's overall operations.
--
Editor: Marcus Turovski
Source: Delfi
