Police in Oslo, Drammen and several other Norwegian cities have been stopping drivers taking part in the Uber transport service, issuing heavy fines and even seizing their driver’s licenses in some cases. While the established taxi industry cheers and files charges of its own against Uber, critics say traditional taxis are simply trying to maintain their overpriced grip on the market.
The professional association representing traditional taxi services, Norsk Taxiforbund, reported 105 Uber drivers to the police earlier this month. They claim Uber represents unfair competition, since taxis and their drivers are regulated and must be licensed by the cities where they operate. Uber is an unregulated, international system that represents a threat to traditional taxis.
Newspaper Aftenposten reported recently that police are cracking down as promised last year, citing a Norwegian transport law that anyone engaging in national or international transport of people for a fee in a motor vehicle in a public place must have licensed authoritization. Even though a court in Stavanger recently ruled that use of an “application” (app) to call a car and driver did not meet the definition of a “public place,” police have been upheld in other court cases that it’s the transport of people for a fee that matters most. Norwegian police, as of now, view Uber vehicles as “pirate taxis” that are illegal in Norway.
Taxi industry officials are delighted by the crackdown, arguing that traditional taxis provide safety for passengers, that its drivers must pay local taxes and that competition from other transport providers must be fair. The industry association itself reported Uber drivers to police in the hopes of “halting this illegal form of transportation,” said Øystein Trevland, leader of Norges Taxiforbund.
Consumer activists and local commentators object, as does Uber itself, which has established an office in Norway and claims its service is legal. Its “partner drivers” who use the UberPop service “offer others a safe, reasonable and simply means of getting around Oslo,” Uber’s chief in Norway, Carl Edvard Endresen, told Aftenposten.
Commentator Joacim Lund wrote recently in Aftenposten that the traditional taxi industry seems more concerned with “maintaining its privileges” and protecting its high fares from competition. Norway’s state statistics bureau SSB (Statistics Norway) reported that taxi fares have risen 65 percent just in the past 10 years, three times the consumer price index. It’s not unusual for a taxi fare even with downtown Oslo to hit NOK 200 or more, while rides to suburban areas, especially in the evenings, can cost more than a low-fare airline ticket to other Nordic cities.
Lund also scoffed at the taxi industry’s claims that passengers are safer in a licensed cab and that its drivers pay tax. Several taxi drivers have been charged in recent years for assaulting passengers, he noted, and the taxi business in Oslo was caught up in one of the biggest tax fraud cases in Norwegian history when nearly 400 drivers were accused of tax evasion totaling more than NOK 600 million in the early 2000s. “It’s a bit absurd to hear the taxi association be worried about whether a competitor is paying tax,” Lund wrote.
Meanwhile, the surveillance authority for the European Free Trade Association (EFTA) has ruled that Norwegian rules for doling out taxi licenses violate the freedom to establish new businesses as defined in the agreement Norway must abide with in order to trade with the EU. Not only is Uber under pressure but so are other more traditional taxi firms that want to start offering services. Some drivers contend that the taxi business in Norway is one in which competition has not functioned after Oslo Taxi’s monopoly was broken in 1999. Two new companies were allowed to issue new taxi licenses, and they demand that drivers must be tied to a taxi central. The centrals, however, set fares and they’ve actually raised them as demand has fallen. Some contend the dive in passenger is instead a result of the higher and higher fares.
“A taxi trip in Oslo costs three times what a similar trip costs i London,” one frustrated driver, Roger Pettersen, recently wrote in newspaper Dagens Næringsliv (DN). “The taxi business is struggling with customer flight and dead time.” He’s demanding that the city make major reforms in how Oslo’s entire taxi system is set up.
Uber has at the very least complicated the situation, but provided a much cheaper and, especially for visitors accustomed to using Uber in more than 400 cities around the world, familiar service. The Taxiforbund’s leader Trevland claims that taxi fares are higher because of the demand for licenses, taxi meters in the vehicles, insurance and pension payments for drivers.
Lund argues that’s no reason to preserve the current system. While city officials ponder what some call a “taxi crisis” in Oslo, the state is also examining how the new “sharing economy” with its innovative services like Uber and Airbnb can be integrated into the mainstream economy. “We need to embrace the innovation,” argues national employers’ organization NHO, with a free market favoured over strict regulation whose time may have passed.