The controversial “personal transport” company Uber was accelerating its way into the Norwegian market this week, opening its first “private chauffeur” service in Oslo on Wednesday. Local taxi companies feel threatened and Uber can expect to run into many legal roadblocks.
Newspaper Dagens Næringsliv (DN) reported that Uber, founded in San Francisco in 2009, was undaunted and keen to take on Oslo’s private chauffeur market first.
“We’re starting up our Uber Black service in Oslo from Wednesday,” Jo Bertram, director for Uber in Great Britain and the Nordic countries, told DN. “Those who download our app and register themselves can then place an order to be driven somewhere.” He described Uber Black as “a service for exclusive personal transport with strict demands regardings cars and drivers.”
At the same time, however, Uber is also launching a “test” of its Uber Pop service, which has proven to be a direct challenge to the taxi business. “We’re in the process of tying up with drivers and will invite Norwegians who have registered with us to try out the service around six months from now,” Bertram told DN.
Uber already has run into conflicts with established taxi companies in other countries where it has launched its service. Taxi drivers claim Uber is little more than an organized form of “pirate taxis,” and similar complaints are expected in Norway. They already have some powerful backing at the state level.
“This is clearly illegal,” Bård Hoksrud, state secretary in the Transport Ministry, told DN. “If anyone wants to be paid to drive someone or something somewhere, they must have a permit and a special license.” Hoksrud sees no exception to such rules, and that it “doesn’t matter” whether Uber considers their operation a pilot or test project.
Bertram said Uber wants its entry into the Norwegian market to be conflict-free, and claimed the company had been in “dialogue” with local authorities and Oslo’s taxi business. That was flatly denied by Glenn Tuxen, leader of the Oslo chapter of the Norwegian taxi federation Norges Taxiforbund.
“We haven’t had any dialogue with Uber and can’t understand how what they’re doing can be legal,” Tuxen told DN. Uber has not received any permit for operations in Oslo.
Set to offer much lower rates
Alise Davidsen, communications director for the City of Oslo, confirmed, however, that the city had received notice from Uber describing the service it planned to establish in Norway. “We responded that the service appeared to violate applicable regulations,” Davidsen said. “We later asked for more details of the concept, but have not received a reply.”
There’s no question Uber plans to seriously undercut the rates charged by taxis in Oslo. According to a contract obtained by DN that’s used between Uber and prospective drivers, passengers will be charged a minimum pickup price of NOK 40 (USD 6) plus NOK 10 per kilometer and NOK 3 per minute. That compares to Oslo Taxi’s minimum pick-up price of NOK 109 during the day (higher at night and on the weekends) plus NOK 13 per kilometer and NOK 6.5 per minute in addition to a base price of between NOK 43 and 91.
Norwegian consumers have complained for years that taxis have become extremely expensive, also after the old taxi monopoly was abolished and many more players entered the market. A service like Uber’s could quickly run them out of business even though taxi officials warn drivers against signing up with Uber because “it can’t possibly be profitable” for them at such low rates. Uber takes a 20 percent cut of a driver’s revenues, and all drivers are required to be registered business owners with the state.
Tuxen of the taxi federation said he doesn’t expect any fistfights to break out over Uber’s service, though, as has happened in some cities. “If they go ahead with establishing operations within our field, we will follow this up legally,” Tuxen said.