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May 2017

In stark contrast to Canadian cities, Denmark takes firm stand against Uber X

by Mike Beggs

Whether or not it holds up in the end, the Danish government’s firm stand against Uber makes for a refreshing change from the experience in Canada.

After regulators there passed a new vehicle for hire bylaw requiring fare meters and seat sensors in all cars, Uber management announced that it would be shutting down operations in Denmark, effective April 18.

The Silicon Valley ride-booking giant claims to have 2,000 drivers and 300,000 regular customers in Denmark.

In light of the new bylaw Uber management said it cannot operate under the new rules, but that it will continue to consult with the Danish government in hopes they will update the regulations, “to enable Danes to enjoy the benefits of modern technologies like Uber.” Similar statements have been released in every city Uber has been forced to pull out of.

Transport Minister Ole Birk Olesen deemed it “a shame” that the majority was not in favour of the government’s proposal to liberalize taxi laws, and make it easier for ride-booking services like Uber to operate legally in Denmark. He was forced by opposition parties to toughen up regulations in the new bylaw.

But a spokesman for Denmark’s largest trade union commended this decision, which would enable the country’s 6,000 cab drivers to continue to earn a living.

“When (Uber) started here 2.5 years ago it was illegal, and it was ruled illegal several times. The new law has not changed that,” Jan Villadsen told Reuters.

Karsten Honge, spokesman for the opposition Socialist People’s Party, observed that Uber’s business model resulted in “unreliable conditions” for its employees.

“It will not do, and I am glad our society is taking a stand against a company as greedy and avaricious as Uber,” he told Politken.

Ever since its November 2014 launch, Uber has been taking heat from the Danish taxi companies, and unions for “unfair competition”, because it is not meeting the legal standards required for established taxi firms.

In December 2016, Uber’s European division was indicted by Danish public prosecutors for helping two drivers to violate taxi laws. This case was to be heard at the end of April.

By contrast, the Ontario taxi industry has watched one city after another bow under the pressure of Uber’s relentless lobbying and reported popularity amongst the general public – due to its push button convenience, and cheaper prices (made possible by skirting long established taxi regulations and avoiding many of the expenses cab operators face).

Long-time Toronto owner/operator Gerald Manley suggests the new Danish regulations will stand up, because this decision, “came from the federal government”, not just from a municipality.

Veteran Mississauga plate owner Peter Pellier suggests the Danish position on Uber reflects “how advanced they are”, as a perennial Top 5 finisher among the world’s best countries to live in.

“They made the right stand, saying, ‘You’re a taxi service,’” he says.

However, he’s unsure if the new law will hold up.

“Time will tell,” he adds. “Of course (Uber) wants to get into that market. I believe behind the scenes, they’re putting enormous pressure on the federal government in Denmark, just like they’ve been pressuring our federal government regarding the HST.”

Some 40 years on the road, Uber driver Louis Seta observes that, “nothing goes smoothly”, yet despite this Uber has grown into a $62-billion corporation.

“The Hungarian government has banned Uber, as well. This has been the way for Uber, and then they let them back in,” he says. “Look at Calgary and Edmonton, they kicked them out for a while. It might be out for (only) a small period of time in Denmark.”

Independent Toronto Taxi Inc. president Mike Tranquada suggests there are seemingly “no borders” to the pressure Uber can exert on politicians with its deep pockets – for lobbying, fighting court battles – along with the enticing promise of substantial revenues to the City. (The 30 cent per run fee Toronto receives from Uber is amounting to a windfall of approximately $400,000 per month!).

“Most (municipalities), when they first looked at Uber – like Vancouver and Mississauga – they said, ‘No, you’re putting guys out of work.’ After the first year of Uber lobbying at city hall, (everything changed),” he alleges.

The Denmark’s hardline on Uber is like night and day compared to Canadian municipalities like Toronto, where Mayor John Tory stated that “We must make room for technologies like Uber” immediately after being elected. And while there has been a great deal of talk at City Hall about “leveling the playing field” between taxis and Uber, it remains just that.

While cities like Edmonton and Calgary forced Uber to pull out temporarily, in both cases their Councils ultimately caved to the pressure, and acceded to Uber’s demands for coming back to town.

In fact, Edmonton was the first Canadian municipality to license Uber in 2016 – provided they paid yearly license fees of $50,000, an additional six cent per trip fee, and provided vehicle checks, and sufficient auto insurance. Intact’s new “hybrid policy” was finally approved by the Province in June, and Uber quickly rolled its Uber X service back out on the streets.

In Calgary, Mayor Naheed Nenshi took an initial hard line against Uber, with the City obtaining a court injunction to block it from operating in November of 2015. Uber pulled its cars, but beefed up its lobbying efforts. And by February 2016, Calgary Council had approved a new bylaw allowing Uber X cars to operate in the city, once the new “ridesharing insurance” was developed.

And in the space of two weeks in February, London, Ontario’s Council reversed its decision and voted to license Uber, buckling to reportedly immense pressure.

While generally accepted around the continent, Uber has received a rougher ride in some European nations.

In 2016, Uber drivers in London, England won the right to be classified as workers rather than as self-employed operators – a decision with potentially far-reaching implications.

And a key European-wide ruling on the question of how Uber’s business should be regulated – as a taxi, or technology company – is forthcoming later this year.

In April an Italian court banned Uber, determining that the company’s business practices amounted to, “unfair competition”. However, an appellate court said Uber can continue to operate, pending a final ruling.

In the U.S., Uber has been banned, or ceased operations in Austin, Alaska, and Oregon (Portland excepted).

Meanwhile, Uber has left China (after losing several billion dollars, and being bought out by its Chinese competitor, Didi Chuxing), and has made little headway in Japan.

In April, Fortune listed “five famous cities that still don’t have Uber”.

That includes Barcelona, and Frankfurt (both of which chased Uber out in 2014), Buenos Aires, Buffalo (the only major U.S. city without Uber), and Vancouver (where ridesharing will be a pivotal issue in the upcoming provincial election, on May 9).

Uber management said it will provide “dedicated resources” to assist its Danish driver/partners throughout the shutdown process. And, the company will continue to operate its software development plant in Aarhus, in northern Denmark.

 

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