Will a New Taxi Law Doom Uber in Denmark? - eMarketer

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Will a New Taxi Law Doom Uber in Denmark?

Some 5% of internet users have used the service

February 27, 2017

Denmark’s government has proposed a new taxi law that could complicate Uber’s business there. The legislation, backed by a majority in the country’s parliament, is the latest in a series of setbacks for Uber—and other sharing economy services—across Europe.

Internet Users in Select Nordic Countries Who Have Used Sharing Economy Services, by Service, Q4 2016 (% of respondents)

If passed, the new law will require all taxis and cars for hire in Denmark to have seat sensors, video surveillance and taxi meters.

Uber has already come under fire in Denmark for its low-cost UberPop service, which lets private drivers provide rides in their personal cars. UberPop drivers do not need to have a taxi license—as is required by Danish law—Uber argues, since it considers UberPop a carpooling service, rather than a taxi service.

However, an appeals court in Denmark recently disagreed, upholding a July 2016 ruling that found UberPop in violation of taxi laws for using drivers without taxi licenses. Other Uber services that use taxi-licensed drivers, such as UberBlack, were not affected.

Denmark is not the first country in Europe to push back against Uber. Courts in France, Germany and Sweden, among others, have also ruled against the ride-hailing app for allowing drivers to work without a taxi permit. Following a wave of convictions against unlicensed drivers, Uber was forced to suspend UberPop services in those countries.

But critics of the new Danish law fear the equipment regulations will mean the end of all Uber services in Denmark, including those that use drivers with taxi licenses. Uber’s Danish arm has said it will fight the proposal, calling it a blow “not only for Uber, but also Denmark as a whole.”

Proponents argue that it would help create an even playing field by forcing Uber to meet the same standards as traditional taxi services. What’s more, the law also contains clauses intended to loosen the restrictions on the taxi industry—one of the most strictly regulated businesses in the country. For example, it would allow cabs to work all over Denmark and do away with fare ceilings.

Uber’s struggles in Denmark are just part of an ongoing debate over the sharing economy in Europe. Other platforms, like Airbnb, have faced similar legal issues as governments across the continent grapple with how to balance new sharing economy services with the concerns of existing businesses.

According to Uber, it has roughly 2,000 active drivers in Denmark, and some 300,000 people there have downloaded the Uber app.

In terms of actual users, AudienceProject found 5% of internet users in the country had used the service in the 12 months leading up to a Q4 2016 survey. This was roughly on par with the rest of the Nordic countries.

—Jasmine Enberg

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