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Car service app battles Stockholm taxi system

8 May 2013, 13:46

Published: 08 May 2013 13:46 GMT+02:00

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"There's been a huge amount of engagement. Our users have come to our aid and have really put pressure on the authorities," Uber spokesman Robin Reznik told The Local.

At the heart of the issue is whether the app, which allows users to locate nearby car services and get a price estimate on their smartphone before accepting the ride, skirts rules that require taxis to have metres. The company slogan is "Everyone's Private Driver."

Just weeks after its launch in Stockholm in February, Uber began receiving an unusual high number of reports from drivers claiming they were being stopped by police.

One driver, Denis Aganovic, told The Local he had been stopped five times within three days.

"Just to compare, in the 12 years I've been driving professionally in Stockholm, I've only been pulled over about ten times," he said, adding he's spoken to many other drivers who have also been pulled over.

"It's as if they knew exactly who they were looking for."

He theorized that police officers had been "misinformed" about what exactly Uber was.

"It's like they thought Uber was started by drivers looking to run an unlicenced taxi operation," the driver explained.

"They didn't realize it was an established, international company."

While Aganovic managed to avoid being fined, other Uber drivers haven't been so lucky, having been slapped with steep fines for failing to have a meter.

Fear of run-ins with the law left many drivers fearful of using the service, which connects limousine services with customers via a smartphone app.

Concerned that drivers would stop participating in the service prompted Uber to ask customers to sign a petition and contact the Swedish Transport Agency (Transportstyrelsen) over what Uber claimed was unfair treatment.

The app makers said the authorities were "trying to protect the existing taxi industry" and wanted to "end Uber's presence in Stockholm".

The app works by allowing someone needing a ride to see a map on a smartphone showing the available cars in the area. The app then automatically selects the closest car, with customers being able to confirm the booking after seeing a price estimate.

"You can see where the car is in real time so you know exactly when it will arrive," Reznik said.

Riders are then invoiced electronically through a credit card on file with Uber, avoiding the need to produce cash or credit cards in the vehicle.

Started in San Francisco in 2010, Uber has expanded to more than 30 cities worldwide. Since its launch in Stockholm, the service has proven extremely popular in the Swedish capital.

"We've grown faster in Stockholm than we have in any other city, by any measure," Reznik said, adding however that Uber doesn't publish exact figures on the number of people who use the app.

But a decision by the Transport Agency to deny applications from Uber drivers for exemptions from a law that requires taxis to be fitted with a metre and have prices displayed threatened to put the brakes on Uber's expansion in Stockholm.

According to Uber, the exemption is commonly offered to limousine services similar to those linked to Uber. The company alleged the agency has unfairly changed the way existing rules were interpreted and applied in an attempt to hamper Uber's operations and protect the city's taxi industry.

"It's not like a taxi that you call from the street when you need a ride," Uber spokesman Robin Reznik told The Local.

"With the app, you know exactly what you are going to pay before you get in the car, so there's no need for a pricing sticker to protect people from shady taxi services that may be trying to rip people off."

In a statement on its website, the Transport Agency defended its decision to deny the taxi metre exemption, explaining the drivers "failed to demonstrate" sufficient justification for the exemption as laid out in a 1998 law that tightened the requirements.

Within days of alerting users to the problems in Stockholm, thousands signed a petition in support of Uber. Users also took to blogs and social media outlets such as Facebook and Twitter to draw attention to and attract more sympathizers to Uber's predicament.

Many also heeded Uber's calls to contact relevant public officials, who have since been receptive to meetings with Uber to discuss the issue, according to Reznik.

"The Transit Agency told us they had informed the police about Uber. But we've started a good dialogue since then, including meetings with officials from the infrastructure ministry," he said.

While many users have rallied to Uber's defence, others have accused the company of exaggerating the situation in an attempt to gain publicity.

"What Uber is currently asking for is an exemption to be able to compete on unfair grounds," argued blogger Michael Kazarnowicz, arguing that Uber wanted wanted to run a taxi business but "doesn't want to be regulated like their competitors".

"Uber seem less interested in contributing to a solution and more interested in whipping their army of zombies into a frenzy with a lot of emotions and allegations, but few facts," he continued.

"I can only see this as Uber wanting everyone to adapt to their way, without having to budge an inch themselves."

Digital media expert Joakim Jardenberg also took to his blog to question Uber's tactics.

"I'm really upset because I like Uber and want it to continue so I can keep using them. But I'm allergic to unfounded arguments," he wrote,

He added that Uber's appeal letter was filled with "half-truths" and appeared to be written by an "angry and confused teenager".

Jardenber also offered a potential solution, suggesting the Uber app itself - where customers agree to a price - could be seen as a "digital taxi meter" and the company could apply to have it certified as a metre.

Reznik maintained, however, that Uber "isn't a taxi meter", explaining that the app simply digitizes much of what used to be done manually.

Story continues below…

"The pricing per minute is something traditional limousine companies use, the difference is that we store, bill, and visualize it digitally and immediately, instead of having a driver report a trip manually to dispatch," he said.

"In addition, we'd need to have a taxi meter and pricing sticker in the car if we converted it to a fare meter, and that's something our customers don't want."

Nevertheless, Argonovic and many other Uber drivers have erred on the side of caution and opted to install meters in their vehicles to avoid being hit with any fines.

He also expressed his hope that the service would continue in Stockholm.

"Us drivers are really happy with it. We don't have all the stress of hunting for customers and we don't have to worry about getting paid since everything happens electronically in advance," he explained, adding that he get 20 to 30 customers via Uber on a busy weekend night.

"The clients are also something of a different breed. Nicer, less confrontational. It's a really nice mix of people."

Despite the divided opinion among users, Reznik also hopes the company can convince transit officials that Uber should be seen as another tool to make it harder for unlicensed taxis to operate in Stockholm.

"No one should have to face the risks of taking an unlicenced taxi," he said.

"Thankfully, we've made a lot of progress and we're optimistic we'll be able stay in Stockholm."

David Landes

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