Uber Stockholm throw a PR-tantrum when refused unfair advantages

Yesterday, Uber Stockholm posted a very strange blog post on their blog.

For those who can’t read Swedish, here’s a translation:

The Swedish Transport Agency is trying to stop Uber in Stockholm! We need your help NOW!

Sign the petition HERE!

Uber has since the start in February this year become beloved in Stockholm. Of the thirty cities around the world where Uber now exists, the growth pace has been by far the fastes in Stockholm We’re very happy and proud about this and we have you, people of Stockholm, to thank for that.

Unfortunately, fast growth often means big challenges. In an attempt to protect the existing taxi industry the Swedish Transport Agency (STA) want’s to end Uber’s presence in Stockholm.

Officers of the STA identify Uber’s drivers and deny them the permit that is required for a service like Uber – which makes it impossible for us to continue in Stockholm. Why are they doing this? It’s simple. The existing taxi industry is big and strong – and the STA wants to protect it at any cost.

The STA’s explanation for this is that the permit that is required should only be given to companies that drive members of royal families or prominent business leaders. We thing that such a qualitative, safe and modern mode of transportation should be available for everyone – not just for the above mentioned!

It’s not only bureaucracy that gives us resistance. Out on the streets, since a couple days the police are working on the orders of the STA to make life harder for Uber’s drivers and customers – with fines and frightened customers and drivers as a result. If we get the permits for Uber’s drivers the harassments on the street will end – and we can stay in Stockholm.

If we don’t manage to turn this situation, the resistance we’re meeting will force us to discontinue Uber in Stockholm. That’s why we need your immediate help with convincing the authorities that limitations of modes of transportation aren’t acceptable. We who have gotten used to the authorities in Stockholm protecting innovation and new technology are both surprised and sad about what’s currently happening.

Remember: the STA’s is not acting to improve the safety or quality for consumers. They’re acting to stop innovation and protect leading taxi companies – which hurts individual drivers and risks us having to end Uber’s services in Stockholm.

Both customers and drivers have embraced Uber and it’s now up to each and everyone of us to make sure that relevant representatives of authorities understand what the effect of their acts are. We think they will listen and understand us if many Stockholmers show what they think. This is what you can do to help:

ACT NOW!

Sign the petition HERE!

Tweet and spread the campaign here.

Contact the below mentioned decision makers and ask them to STOP HARASSING UBER ON THE STREETS AND APPROVE THE PERMITS IMMEDIATELY:

[list of names, e-mail addresses and phone numbers of officers and civil servants.]

The response was pretty huge. What surprised me was that people who are bright and often critical of sources jumped on the wagon without asking obvious questions:

1. What permits are being denied?

2. What has Uber done to resolve the situation?

3. What’s with the conspiracy theories?

  • The police don’t take orders from the STA.
  • The STA, the police and the Swedish Taxi Federation meet all the time to handle what we call “svarttaxi” (literally “black taxis”, drivers that drive without a permit and are often scamming people and worse – several women have been raped while going in a “black taxi”)

Then there are factual errors: The STA is indeed acting to ensure that customers of transportation companies are well informed and get pricing information that’s comparable, but more on that later.

First, let’s have a look  at the taxi market in Sweden:

There are some 15 000 taxi cabs in Sweden. About 5000 of these drive in the greater Stockholm area. The market is unregulated, meaning that you can set any price for your services. On the market in Stockholm, there are three major companies: Taxi Stockholm (1650 cars), Taxi Kurir (some 2000 cars in all of Sweden) and Taxi 020 (some 1100 cars in all of Sweden). There are independent drivers (“friåkare”) who don’t belong to any central, but most drivers are connected to one of the 350 central switchboards in Sweden.

You can safely say that there’s healthy competition on the market.

You do need a permit to have a taxi service: the company needs one, and the driver needs a “taxi licence” (driver’s license where you also take tests to prove specific knowledge required of taxi drivers). You also need a taximeter which is tamper-proof, for tax purposes and for the security of customers. Every one of the taxis driving legally in Sweden fulfills these requirements. You recognize taxis that fulfill the requirements by a taxi sign on the roof, yellow license plates and a sticker displaying prices on the back door windows.

You can get an exemption from the requirement of having a taximeter. Typically, these exemptions would be given to companies that rent out limousines and similar. All of these companies use fixed prices, most commonly per time unit (for example, a Mercedes S from Crown Limo is 1200 SEK per hour, a Chrysler 300C Superstretch is 1700 SEK per hour). On a side note, anyone can use these services, not just “royal families and prominent business leaders”. This exemption also allows you to skip the taxi sign, and since they’re not driving on taximeter they don’t need yellow license plates. They don’t need the price comparison stickers either, for obvious reasons.

The key here is “chauffeur services where you pay per time unit, not for distance”. Uber is not a a chauffeur company by these standards, as they charge for distance and time, just like any other of the 5000 cabs in Stockholm.

The price plan for Uber Stockholm

The fact is that the Swedish Transportation Authority requires taximeters and price comparison stickers for the safety of customers (and tax evasion reasons). The stickers on the cabs allow customers to be informed how this particular cab/company compares. The average comparison price for the major companies in Stockholm is around 300 SEK. So when you see a cab like this one, you know it’s more than twice as expensive as the average ride with one of the major companies. While the execution of the regulation (the information of the comparison stickers for example) can be discussed, this goes on the contrary with Uber’s claim that “STA’s is not acting to improve the safety or quality for consumers”

 

A price comparison sticker on a Swedish taxi cab

 

So the fact is that what Uber are currently asking for is an exemption to be able to compete on unfair grounds: they want to conduct a taxi business where price is based on distance, but they don’t want to be regulated like their competitors. If Uber for example only offered fixed prices based on time units, the exemptions wouldn’t be as problematic to get. And Uber are using an unfair comparison. They talk about “other companies getting exemption from the permits” but all these “other companies” have one thing in common: charging fixed rates. Uber don’t. And still want an exemption.

I’m also curious why Uber doesn’t offer what they’ve done to meet the regulations. Have they discussed and offered other solutions? For example, getting the app certified as a taximeter by SWEDMA, the organization that handles certifications? The Swedish authorities have been trying to get in touch with Uber, and help has been offered to navigate the issues, but 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. I can only see this as Uber wanting everyone to adapt to their way, without having to budge an inch themselves.

I did speak on the phone with Travis Kalanick yesterday, who explained the situation in more detail. However, all of my questions in this blog post remain mainly unanswered. Add to that that Uber refuse to answer questions or to clarify anything in the official channels, for example the simple question “How many cars does Uber have in Stockholm?”. The answer to the latter would be relevant to judge their claims that this is “an attempt to protect the existing taxi industry”. Considering how many cars there are in Stockholm, Uber would need a fleet of at least 100 cars to make any impact on the 5000 existing cabs in Stockholm. And even then, accusing an authority in one of the countries with the lowest levels of corruption in the world is more petulant and tin foil hattery than constructive.

All in all, Uber have a lot of questions to answer. But these questions are hard, and instead they choose to use sleight of hand to shuffle cards and a throw a tantrum to raise a mob of angry zombies. I liked Uber before this, but seeing this behavior that would barely be tolerated from a petulant teenager has turned me off big time. I would be more than willing to help them to get rid of regulations that indeed are bad for both customers and companies, but so far what I can see is that they want to get rid of regulations that actually help customers.

EDIT: Uber claim being “harassed” by the police. But they are today, as far as I know, the only company in Sweden who run an organized business breaking the regulations. They have several drivers that work without the correct permits. So Uber are the only target in this case, and you don’t need a conspiracy theory to explain why police suddenly start acting against organized law breaking.

EDIT: Uber have posted what they consider a clarification (in Swedish). What they’re saying is that they refuse taximeters (or rather, that their customers do) and therefore should be given exemption. They don’t explain why they don’t simply get the app certified. So all questions are still unanswered. Also, they finally answered my question about how many cars they have in Stockholm by saying “Like all companies we have numbers we don’t give out”. All other major Swedish taxi companies state how many cars they have, so this is another strange thing.

Also relevant: Joakim Jardenberg’s blog post (in Swedish). Thanks to both Jocke and Joakim Vollert who helped with research.

22 thoughts on “Uber Stockholm throw a PR-tantrum when refused unfair advantages”

  1. Can they bill per time unit in minutes and calculate the time based on the experience of knowing (roughly) how many minutes it takes to get from point A to point B over a certain route in Stockholm?

    The practice of converting distance/route to estimated time of arrival given a departure date/time is used the world over in various logistics industries – from flights to trucking to rail.

    If you figure out the average estimated wear & tear on the vehicle per time unit and bill accordingly. It seems to work well enough in the rest of the world… could this approach not be used effectively here?

    This would mean they could bill as a limousine service by time unit instead of distance, neatly sidestepping the taxi regulations with the same result.

  2. This ”fight” that Uber is trying to win has nothing to do with anyone trying to stop
    progress or getting rid of a competitor.
    The main problem that nobody seems to understand ( since Uber does not want this to come
    out) is that the whole idea of what Uber offers does not work!! They do not
    have any cars of there own. They need other taxi companies that have some spar time in between other jobs. They are trying to sell this service cheaper than it actually is to run.
    If we start with the problem that started this petition. Ordinary taxi companies working
    for Uber tried to get permission to have cars without taximeters and taxi plates. They were denied this since the reason in there application was that they needed it to work for Uber.
    The only way to get this is if you never pick up clients directly from the streets and you have fixed prices (distance or time) and no money transaction in the car (only invoice).
    Of course you have to put in the right words in the application so that you follow the
    directions as said in the law. This is not impossible to get. And when you have
    received the permit you can drive anyone that would like to ride in such a
    fashion, does not have to be a politician or a CEO. As long as you follow the
    law with fixed prices and invoices.
    If Uber wanted to do this in the legal way they would only use cars from the limousine companies
    that have these permits already. Or buy there own cars. But since these cars
    have a price tag of around 1 000 000 sek, it is impossible to use them on
    these kind of jobs since it costs more to run them than Uber is willing to pay.
    The whole Idea that Uber is trying to use, is that there has to be companies willing to
    give Uber a few hours here and there for almost nothing so that they can offer
    it to people who could otherwise not afford it. No company can offer them a nice car fulltime
    on what they are offering. It does not work! That is why the taxi companies
    were denied, because they have to use the cars as ordinary taxies in between
    Uber jobs to make ends meet.
    What they are doing now is just turning off there own taximeter when they drive for Uber
    and put it on for the next job 20 minutes later. If you are a taxi you can not
    choose witch system to use, you always have to use the meter. And NO an app is
    not a taximeter and it never will be.

  3. Look at it from a customer perspective. Do customers want a fast and reliable service? Yes. Do customers want convenience? Yes. Do customers want to be ripped off? No. Do customers want Uber? I believe so. You know the price beforehand and its a great service. That’s why they have the support from so many people in Stockholm. The regulations should protect the interests of the consumer right, so what do the consumers want in this situation? It’s not that easy, of course, we do have regulations in place. But don’t just point to the regulations and scream foul, be more human. Not saying any one side of this discussion is right or wrong just ask what the customers want. Regulations should revolve around the citizens.

    1. But Uber doesn’t always present a fixed price. Needing a cab a month ago, I plugged in where I was and where I wanted to go and I got a price range of 420-610kr. Taxi Stockholm (whom I ended up calling) charged me 490kr using a taxi meter. I have been intending to try again, but so far beyond hearing that people like Uber, I haven’t figured out any advantages. Am I missing something?

      1. For me, the biggest advantage is the convenience of payment. Hop in, hop off, no transaction between the passenger and driver. I also enjoy the fact that I know where “my” car is.

  4. I live in Vancouver where apparently Uber has had similar problems and simply had to give up and move on. Until now I’d only heard the Uber-half of the story, so I found this post very eye-opening. I wonder if these were the same kind of restrictions that stopped them from expanding into Vancouver, and if they’ll encounter this sort of thing in many other cities.

    1. The thing is, that my problem is more about the way they’re communicating. But as more and more facts show up it turns out that Uber have little facts supporting their claims and therefore choose to use this type of emotional rhetoric.

    1. Thanks John!

      Re: McGyver: You’re totally right. It’s actually an experiment, partly because “digitalmacgyver” was already claimed. I want to see if I can sway Google on autocorrecting “mcgyver” to “macgyver”.

  5. I think the saddest part of Uber and it’s way of communicating (or lack thereof) is that people, like myself, who enjoyed the uber-taxis and didn’t mind using them even though they had stickers with prices, now feel like Uber is lying to their customers or avoiding telling the whole story. Which in fact is what it seems they do. I was on their side, I admitted it was ‘wrong’ to be on their side since they didn’t share all the info, I asked them to do it and they continue to skew the info. So now I’m a former customer..

  6. Does any one know what eventually happened with Uber in Stockholm? Did they bend the rules, leave or were they forced to change in some way? Would appreciate any insights.

    1. They never got the exemption they wanted and were forced to change their pricing to the same model as the regular taxi companies. Uber later claimed this was voluntary, and something that made their system “better for the customers” – which of course only would be true if they changed to that system in all other countries as well, which they haven’t.

      1. Thanks Michael! Were they forced to have a taxi meter? Also, do you know how Uber’s revised pricing model differs from the previous one? Appreciate your insights.

        1. Taxi prices in Sweden have to be displayed in a standardised format so that they can be compared between companies.

          Uber’s old model:
          Base fare: 50 SEK
          Fare per minute: 18 SEK (speeds 18km/h)
          Minimum fare: 100 SEK

          Uber’s new model:
          Base fare: 50 SEK
          Fare per minute: 9.60 SEK
          Fare per kilometer: 13.50 SEK
          Minimum fare: 100 SEK

          Before, they either charged you per kilometer or per minute which meant that you could pay a lot if you got stuck in traffic. Now they charge for time and kilometers simultaneously, just like all other taxi companies. This gives them a comparison fare of 329 SEK (on par with other taxi companies in Stockholm)

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