The nationwide Alliance has written to the CNMC to warn of the serious deterioration in service provision in the sector, caused by the demands of its clients.
The first moves by the newly created National Roadside Assistance Alliance have not been long in coming. The Alliance, made up of various professional roadside assistance organisations -both regional and national-, has asked the National Markets and Competition Commission (CNMC) to investigate possible abusive and collusive practices by insurers, platforms and travel assistance companies.
The sector, the Alliance claims (of which REAC is a member), is dominated by an oligopsony made up of barely 10 companies that rely on some 2,000 roadside assistance companies as suppliers. The imbalance is so extreme that the latter are stripped of any negotiating power vis-à-vis the former. These ten or so companies control prices at will, as well as the conditions of commercial transactions. Always to their own benefit.
Thus, according to the Alliance, insurers, travel assistance companies and motoring clubs are putting roadside assistance activity at risk. Especially in the most depopulated areas and during heavy-traffic operations. “If things carry on like this, the deterioration of the service due to unfair competition could soon turn Spain into a third-world country as far as roadside assistance services are concerned,” said the Alliance spokesperson, Xavier Martí.
Great harm to Road Safety
In the Alliance’s view, this situation is also causing great harm to Road Safety in general. Commercial interests take priority over the quality of the service, safety and the organisation of roadside assistance. Commitments to provide assistance in under an hour and similar, applied to all kinds of breakdowns or minor incidents, prevent services from being prioritised according to the road risk of the operation. This circumstance is also a cause of serious tensions between companies in the sector.
There is likewise a practice of circumventing regulations on the part of the oligopsony companies, which directly affects the occupational health of roadside assistance operators. This scenario could lead to significant socio-economic damage, given the abusive contractual conditions. The risk of cartelisation is such that, if this scenario continues, many companies in the roadside assistance sector are doomed to close, with the consequent loss of jobs.
A problem that is not new
Is this a new problem? The Alliance states that this imperfect competition, which so greatly affects the roadside assistance protocol, was detected more than a decade ago, although no progress has been made towards any solution.
Order PRE/1664/2008 of 13 June, on the Council of Ministers Agreement taking note of the Agreement between the General State Administration and the Goods Transport Department of the National Road Transport Committee of 11 June 2008, already set out in its section 12 the obligation for the National Competition Commission to draw up a specific Plan to investigate possible practices constituting unfair competition in the contracting of road transport, with particular attention to possible cases of selling at a loss.
It stated that this Plan would “specifically” consider cases that might constitute an abuse of a dominant position in the contracting of roadside assistance vehicles. For this reason, the National Roadside Assistance Alliance has approached the CNMC to request compliance with the law, avoiding situations of imbalance between the parties in the roadside assistance chain.
The National Roadside Assistance Alliance is made up of the following regional and national associations and business organisations: ABEAC (Balearic Islands), ABEAC (Basque Country), ASCA (Catalonia), AMEAC (Madrid), ANESAV (National), ASCALEAC, (Castile and León), ASEDA (Andalusia), ASEGA (Galicia), ASEXTEAC (Extremadura), GRUPO CARTER (National), CEPAS (National), FEGRUAL (National Federation) AGREGA-GRUAS and REAC (National Grouping).