Portugal has published new rules governing the calculation of taxi fares. The changes will take effect in 10 days and are intended to make the pricing system more transparent while ensuring that fares better reflect operators’ actual costs.

The main change concerns the pricing model itself. The initial flag-fall fare (bandeirada) will be lower than the current rate, but the total cost of a journey will thereafter be determined by both distance travelled and time spent in transit. In addition, fares may increase on public holidays and during major festivities through a higher time-based component. Tourist regions will also be allowed to introduce seasonal pricing.

At the same time, most existing surcharges will be abolished. Only the fee for booking a taxi will remain. Fares will also vary according to vehicle capacity, reflecting the higher operating costs associated with larger vehicles.

For now, Portugal remains one of the most affordable countries in Western Europe for taxi travel. In Lisbon, the starting fare currently stands at around €3.25, while the cost per kilometre is approximately €0.47. By comparison, in major cities across Germany, France and the Netherlands, the per-kilometre rate is often two to three times higher. International price comparisons show that Portuguese taxi fares remain well below the European average and are generally surpassed in affordability only by countries in Eastern Europe and the Balkans. As a result, even after the reform takes effect, Portugal is likely to retain its position as one of the most affordable destinations in Western Europe for taxi journeys.

The Mobility and Transport Authority (AMT) has stressed that the new mechanism is not intended to trigger a sharp rise in prices. For the first year of the reform, fare increases will be capped at 9%, and the impact of the changes will be subject to ongoing monitoring.

Another significant aspect concerns journeys between municipalities. The new system is expected to eliminate some of the pricing distortions that previously allowed fares to vary depending on whether a trip started in one municipality and ended in another.

The rules also pave the way for more flexible digital pricing models for taxis connected to electronic platforms. At the same time, operators will be required to provide the government with detailed operational and financial data, while a dedicated digital platform will be created to oversee and monitor the market.

Through these reforms, Portugal is seeking to preserve one of its competitive advantages — relatively affordable taxi services — while adapting the sector to the realities of the digital economy and rising operating costs.