Economy First Look

Citing a proposal for tougher taxi standards, Uber withdraws from Denmark

A proposal that would require taxicabs and cars for hire to have seat occupancy sensors and meters has prompted the ride-hailing company to shut down its services in Denmark.

Uber Denmark's spokesperson Kristian Agerbo appears at a news conference to announce Uber's end of service in Denmark because of a taxi law that sets out new requirements for drivers such as mandatory fare meters, in Copengagen, Denmark.
Nikolai Linares/Scanpix Denmark/Reuters
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Uber will withdraw its ride-hailing service from Denmark in response to a proposed law that would require its drivers to outfit their vehicles with mandatory fare meters and seat sensors.

Uber will no longer operate in the country after April 18, it announced on Tuesday, citing the proposed taxi law introduced in February. About 300,000 people have downloaded the app in Denmark, serviced by about 2,000 “active drivers” in Copenhagen, the only Danish city where Uber operated.

Ever since it expanded to Denmark in 2014, Uber has clashed with some regulators and politicians who see it as an illegal taxi service. But this debate hasn’t been confined within the Danish borders. Cities and countries across the European Union disagree on how Uber should be treated.

Some say it is an illegal taxi service that should follow current regulations or pay the price. Others, including Denmark’s transport minister, say regulations should be modernized to accommodate the services Uber and other companies like it offer.  

"It is a shame, that there was not a majority in favor of the government's proposal for a significant liberalization of the taxi law, which would have made it easier for Uber and similar ride services to operate legally in Denmark," Transport Minister Ole Birk Olesen said in a statement. "I believe that we must be open to new technologies and innovative business models.

The taxi law would require drivers to introduce measures such as mandatory fare meters, seat sensors, and video surveillance features.

But Uber spokesman Kristian Agerbo said the proposed law was “going in the wrong direction.”

"For us to operate in Denmark again the proposed regulations need to change. We will continue to work with the government in the hope that they will update their proposed regulations and enable Danes to enjoy the benefits of modern technologies like Uber," the company said.

Uber said it will maintain its corporate footprint in Denmark. It has a software development division in Aarhus, Denmark’s second-largest city, where it employs 40 people who work on its infrastructure software, according to the company website.

Uber’s announcement comes as it faces legal challenges in both Denmark and the European Union. In December, Uber’s European division was indicted by Danish public prosecutors for assisting two drivers fined for violating taxi laws. Those drivers were fined in November, and the case against Uber will come to court by the end of April.

At the same time, Uber is awaiting a decision from the EU’s highest court that might answer questions that have dogged the ride-hailing service: Is it a digital service that connects drivers and passengers? Is it an unlicensed taxi service? Or is it something else entirely?

The case is the result of a 2014 legal challenge from the Asociación Profesional Élite Taxi, Barcelona’s main taxi operator. The organization accused Uber of running an illegal taxi service through UberPOP, which allowed amateurs to drive for the service if they passed some basic security checks, The Christian Science Monitor previously reported:

The case has set member nations of the EU with different regulations against each other, with other countries, especially those in the so-called sharing economy, paying heed. Because the EU is one of Uber’s largest international markets, a decision could mark a turning point in how the world generally regards the sharing economy. In particular, a decision could affect whether services such as Uber, Lyft, and Airbnb are considered apps that exist in just the digital space, or real-life service providers that should face real-life regulations, including licensing, insurance, and safety.

...[P]oliticians and traditional transportation services have brought legal and regulatory challenges against Uber and other ride-hailing companies in cities that include London, Frankfurt, and Calgary, Canada. At the heart of many of these debates is this question of whether Uber is purely a digital company that matches passengers and drivers, or whether it is, in effect, an unlicensed taxi service, as the Harvard Kennedy’s School Shorenstein Center wrote in an analysis of the issue.

This report includes material from the Associated Press and Reuters. 

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