Up to the early 1980s, the Constitutional Court tended to take a reserved, strictly formal and restrictive stance on formal enactments restricting fundamental rights, such as the freedom to conduct a business, which is enshrined in Article 6 of the Basic Law on the General Rights of Citizens. In accordance with the Court’s jurisprudence of the time, the legislator, in adopting simple-majority laws, was restricted solely by the substance of the fundamental right at issue. An infringement was rarely deemed to exist, except when the fundamental right appeared to be almost completely undermined. This earlier approach gradually gave way to a more substantive view, as in the case of the taxi licenses. In accordance with this point of view, interference with a fundamental right is permissible only if it is in the public interest, proportionate and substantively justified.
The Occasional Carriage of Passengers Act, which regulates the taxi trade, originally provided for licenses for the commercial carriage of passengers to be issued subject to “demand for the trade to be exercised”. In 1986, the Constitutional Court had to deal with two complaints against rejections of applications for taxi licenses and initiated an ex officio legal review of sect.5 para.1 and sect.5 para.4 of the Occasional Carriage of Passengers Act. In addition, another 49 applications for legal review were submitted to the Administrative Court in similar cases.
With its decision of 23 June 1986 (VfSlg 10.932), the Constitutional Court ultimately repealed the provisions concerned on the grounds of violation of the freedom to conduct a business pursuant to Art.6 of the Basic Law on the General Rights of Citizens. The Court underlined that a provision restricting the freedom to conduct a business was permissible only if it was in the public interest, suited to achieve the intended goal, proportionate and substantively justified. In the Court’s opinion, demand assessment, as provided for in the Occasional Carriage of Passengers Act, was entirely inadequate as a means to achieve the goal of functioning, safe and time-saving occasional carriage of passengers and merely served the restriction of competition, which was not in the public interest. A legal requirement of demand assessment was pronounced to be a disproportionate restriction of the freedom to conduct a business.
The legislator reacted to the repeal by amending the Occasional Transport of Passengers Act. According to the amended sect.10 para.2 of the Act, the authority to limit the maximum number of taxis in operation by way of a regulation was conferred upon the governors of the Austrian provinces.
The new provision, however, was nothing but a form of demand assessment in disguise. Moreover, it caused a heated controversy, as numerous legal experts suspected that it had been adopted as a constitutional provision for no other reason than to safeguard the old system from objections by the Constitutional Court. In fact, the attempt was not crowned with success: The Constitutional Court repealed all regulations adopted on the basis of sect.10 para.2 of the Occasional Carriage of Passengers Act (VfSlg 11.756/1988 uva). In 1993, the legislator changed its position and declared the contested provision null and void.
