Sweden proposes ban on ride-sharing services that make profits
reuters.com
reuters.com
Sure enough, read the text for actual information and you'll see that it's reporting on a press conference about a commission that issued a report. This, through the magic of journalism, turns into "Sweden".
For context, the taxi regulation in Sweden is very light. There is no medallion system limiting the number of cars, and no regulation of prices. You just need an extended driver's license, an approved taxi-meter (same as how grocery stores need their scales to be approved), and the pricing plan listed clearly in the window.
There has been quite a bit of criticism of this lack of regulation, since some private taxi drivers will prey on tourists by overpricing their services by 3x and waiting at airports. Since their rip-off prices are displayed right there in the window, it's fully legal. Tourists don't know the typical price of a taxi, and fresh off an airplane are not sure what the local currency rate is (Sweden isn't on the Euro), and hence get ripped off.
I'm not necessarily a fan of Uber, but this is ridiculous.
If 'taxis' are legal in Sweden then there's no reason Uber should not be able to operate so long as they are obeying the laws.
Ostensibly, this is about a specific issue - distance travelled and the lack of ability for tax authorities to measure that.
Two things to know about Nordic countries:
1) They are super, super aggressive when it comes to tax things. Cheating on taxes is worse than some major crimes!
2) They are culturally anti-business and anti-entrepreneurial. I know this may seem odd given the number of startups - but their version of 'socialism' is cultural. To be a 'business person' or 'CEO' or to 'have your own company' even up until the 1980's was considered a 'dirty word'. They have this view that 'private business is immoral' in some ways. It's hard to describe. They are just default skeptical of anyone creating a business. Obviously that has evolved a lot over the last 30 years, but the underlying cultural phenom is still kind of there.
Finally - this may simply be political. Taxi entities around the world are trying to find ways to get Uber banned, and so they find an issue or concern that gives them a legal footing.
Again, I'm not for or against Uber really ...
> I'm not necessarily a fan of Uber, but this is ridiculous.
> If 'taxis' are legal in Sweden then there's no reason Uber should not be able to operate so long as they are obeying the laws.
I think you've misunderstood what was said in the original article. This doesn't make Uber illegal at all in Sweden, they can continue providing taxi services like they have done. However, it makes the ride-sharing part of it, UberPOP for example, illegal. I.e if you want to ride share then that's fine, but you shouldn't be compensated for it. Bringing it back to the original concept of carpooling.
However, Uber Black or UberX would be, from my understanding of it, perfectly fine and they can continue to offer those services.
The fact that POP is not operational in Sweden at all doesn't mean it automatically targets X. UberPOP is just the ride sharing service most people are familiar with so it makes sense for Reuters to use that as an example, as well as add to the appeal of their article. There are however other companies that do provide for-profit ride sharing services in Stockholm. This just means that there's now going to be a law that prohibits UberPOP and similar for-profit ride sharing services entirely, regardless of if they already operate or not.
As also noted by Uber itself, X is not ridesharing.
UberX is the most popular private car service that Uber has to offer. It's commonly referred to as the "low-cost option" for riders, it allows you to quickly arrive at your destination without breaking the bank.
To contrast with UberPOP
With UberPOP, you can share your UberX and split the fare with multiple users.
That's ride sharing.
Maybe pop works differently in places which have both it and X though. Those descriptions certainly make it seem like that.
I don't believe anyone is skeptical of anyone creating a business, in fact I think most people would be very positive towards it.
Also, I like Uber and have used it several times when in Stockholm. Altough, more often than not it's a normal taxi that picks you up. Why I like Uber is simply because of the app and that it is so much better than any competition.
Plus, I hope that soon I will get picked up by a robot driver and want to contribute to that happening asap.
In my experience you couldn't be more wrong.
If you're young, and talk mostly to young Swedes, it's a different story.
Actually, one of the reasons that this may be 'contentious' is because of 'startup culture'.
When I say 'business' - you might be thinking 'startup'.
Surely - it's 'cool' among young people to be at a startup, doing some cool thing like 'games' or 'music'.
But the attitude towards most business, by that I mean what is really 99% of the private economy is still pernicious.
Cultural example - do you know the film 'Girl with the Dragon Tattoo' - the Swedish version? The film is about the follies and evil of an old Swedish noble/industrial family. In the film they are all portrayed as bad, they hate each other, they are greedy, one is a rapist/murderer. Arguably this could be 'populist' anywhere, but it's I think anecdotally relevant for a Nordic country. Across Europe 'business' remember, is the 'bourgeoisie' - i.e. one of the 'offending' classes of 'the revolution'. The view that 'rich people' are basically entirely get their wealth from the economic enslavement of the 'working people' is a cultural epitaph there - and across Europe, to varying degrees.
The idea that people can 'create things of value' an 'exchange them' and 'create jobs' - was not widely held. Wealth was a 'zero sum game' - some had it, other did not and that was it.
As further indirect support, I'll offer the rise of the Social Democrats during the early 20th century, who had enormous power (near total) and influence for decades - and become so entrenched that the were almost de-facto the nature of Swedish/Nordic (and to some extent European) political culture. This did not happen quite as much in the UK, and certainly not in Canada, Australia or the USA.
During the 1980's-1990's they underwent a series of reforms to undo some of the 'socialization of the economy' (same time as Thatcher, Reagan). Same thing happened in Germany in the 1990's, but on different terms.
Anyhow - 'startups among young people' - surely. And surely nowadays the government 'gets' that startups are 'good'. But the cultural aversion to 'big business', I believe, still exists if you factor in all generations, government, institutions etc...
Yes Swedes don't worship people like Trump like Americans do. But people going into business (hairdressers, contract work, running a supermarket, startups) is very different.
> But the cultural aversion to 'big business'
C'mon dude.
That referred to 'big business' at one point, that does not imply my point was entirely about big business.
In fact, it's obviously not.
Someone who has not lived outside of Sweden does not know what how their culture compares relative to others.
General attitudes towards business in Sweden are far, far different than they are in North America, and it's a cultural/historical issue - a point by the way, which is not very contentious, despite how it may seem here on HN.
It's true that many west european countries had very strong socialist movements for decades (not as much now though), but there isn't even possible to make such statements that it's somehow became engraved in the culture. Look at the former East Block countries, there it might be true, but then the mistrust of the public to businesses is because of the corruption. Sweden also has a fair bit of corruption, but the authorities together with lobbying organizations and media spread enough propaganda that the country is somehow the least corrupt in the World.
This sense of equality is well ingrained in society and it's one of the reasons I wanted to live here (after living most of my life in Brazil).
Like another comment in this thread said: Uber can still operate here, you just can't disguise a service making profit as carpooling. I've used Uber quite a lot here and every single time it was just a taxi also running with Uber, I don't think this ban will affect Uber at all.
Swedes are PLENTY entrepreneurial.
What does it matter what they call it? Carpooling/ridesharing ...
Aren't you still using a platform someone else built? Is it then your submission that said entity should not be compensated?
So if you allow Uber to exist in its current form then you'd also have to waive taxi regulations, and I do not see why we would be interested in doing that.
Oh, and I have never experienced the hostility towards entrepreneurship and private business. But of course I wasn't born before the 80's, so can't comment on that :-)
Which major crimes would that be? I'm a Dane, and this sounds ridiculous to me.
2) They are culturally anti-business and anti-entrepreneurial.
That is way overstating it at best, and at worst just BS. True, we in the Nordic countries (or at least in Denmark), don't have quite the reverence for business men and entrepreneurs that Americans seem to have. But we do generally have a great deal of respect for our captains of industry and for people who've succeeded at building something.
The 'anti tax' statement is his, told to me, while I was in Denmark. The Danish tax authorities have to know specific things about your status - including if you carpool to work or not, in order to establish your tax status. They tax in a different way there - they establish your 'effective rate', rather than doing tons of deductions. Whether or not you carpool for example, affects your rate. He indicated to me that misrepresenting anything - even a minor issue to the tax authorities - is a fairly serious crime.
To contrast - the last time I met with him in Denmark, I went to dinner with some of his 'friends'. One of them had just gotten out of a 'halfway house' for murder. He spent almost no time in actual jail.
Anecdotal, but legitimate nevertheless.
The 'anti business' attitude in Scandinavian countries is (or was) palpable, esp. among anyone over say 45. It's a much more difficult thing to illustrate, but go ahead and talk to an older Swede. You'll see what I mean.
I'm Swedish, my Aunt is a hardcore "thought the USSR was great"-Vänsterpartiet-leftist, but even she does some work as self-employed entrepreneur and when I came of age and started doing contract work breathlessly started telling me about all the stuff I could deduct off my taxes.
I don't think you can generalize this.
You have to understand that in Denmark, salaried workers don't have to report their own taxes. Their employers and bank are obliged to do it for them. Only on the rare occasion when the bank or the employer don't have all the information, do most Danes have to edit their tax return. This state of affairs makes it hard to make "an honest mistake", when doing your taxes, and you have to go out of your way to cheat outright.
It's hard to comment on your anecdote about the murderer when I don't know the details, but I can tell you that the penalty for murder in Denmark is between 5 years and life in prison. I think the average sentence is 12 years, but I can't find a source for that.
1) Cheating on taxes is quite literally stealing from every other person in the country. That being said I think there is a lot of small scale cheating going, especially for small cash-driven businesses.
2) There's no hostility towards entrepreneurs as far as I've seen it, quite the opposite. However people in general do seem to realize that there is a very real tradeoff between business interests and the interests of citizens. You can't have 0% corporate tax and free healthcare and education.
As for Uber Pop, the drivers are not volunteers and are simply either taxed for the profits they make through Uber Pop or they can do actual not-for-profit car pooling.
I don't think this was really your point, but is there any particular reason you think there's a need for corporate tax, rather than just taking the same money via capital gains tax?
Yes - thanks for this.
You made my point better than I could.
'Cheating on taxes' is seen as much more of an 'immoral crime' in Scandinavia, than in other places.
In Canada, 'cheating on taxes' is seen like maybe 'cheating a payment' or something. It's 'wrong' obviously, but there is not a 'stigma'.
For whatever reasons (socialized culture, very small community where cause/effect are direct - I don't know? - you tell me :)) - cheating on taxes is a 'much bigger deal', socially, and probably even legally.
But you said it better than I did :)
You can't have 0% corporate tax
and free healthcare and education.
Taxation is ultimately a social tool to organise how people work as a group/nation, who does what etc.
I think Estonia has or had 0% corporate tax.
And as corporations are benefiting from free education and healthcare they clearly should pay into that system too.
Corporate tax actually falls on shareholders and workers. It sounds nice: tax those faceless corporations and not us nice citizens. But the actual end result is not necessarily what one may think.
You will of course find lots of material claiming this and that about corporation tax, because people are passionate about it, but for some balance, this is a summary I picked at random:
https://hbr.org/2014/08/who-pays-corporate-taxes-possibly-yo...
(And in case of Sweden, consider that it is a particularly open economy.)
Reducing corporate friendliness to the tax rate is overly simplified of course. Sweden is on the whole a rather easy to start a company in, there is one single government entity to deal with and it can all be done online. There are relaxed accounting rules unless you reach a certain size etc.
Does Sweden use some sort of flat fee tax system -- e.g. take the total annual expenses and divide by the population and everyone pays the same amount? If not, then I'd ask whether it's stealing for a person to make less than another person and therefore pay less taxes.
They have some nice attributes.
I worked for the EU government studying these issues a decade ago.
One of the primary reasons it's hard for startups over there, is that there are really weak eco-systems - you need 'big pocketed' acquierers (among other things) to sustain the model.
Paradoxically, the (admittedly older) 'anti business' attitude, which again doesn't really exist so much among younger people today - doesn't imply that they are 'bad at business'.
I would actually agree, that 'pound for pound' Swedes are decent at startups, but because of other factors - i.e. market size, eco-systems, language, geography ... it's hard for them to compete with Valley startups.
[1] http://www.telegraph.co.uk/finance/newsbysector/mediatechnol...
[2] http://smashdig.com/artikel/10-most-successful-swedish-start...
[3] https://sweden.se/business/10-world-shaping-swedish-companie...
Also - your 'references' are standard 'glam posts' by media outlets, they are pop culture references, not serious measures of the success of businesses.
Those types of articles and the common 'country rankings' are surprisingly not particularly relevant - the later, almost always depend on the criteria chosen.
For example - if you have as your 'startup criteria':
A) The prevalence of educated population B) Access to healthcare C) Quality of Universities
etc.
Then you'll get certain results that may have nothing to do with startups.
My point that 'Swedes are good at startups but Sweden is not the best place for startups' is not remotely contradictory.
Given the choice between Sweden, and any of the American tech-hubs, there is little comparison: America is better.
And it has mostly to do with market size, access to capital, exit opportunities, exchanges, talent pools etc. etc.
+ The scale of American business means there is a level of specialization unheard of almost anywhere else. There are tons of jobs in the Valley that literally don't exist anywhere else.
+ Growing fast and need to hire 1000 developers over the next 5 years? Impossible in Stockholm. Possible in the Valley. Plausible elsewhere.
+ Looking to be acquired? Tons of buyers, many with deep pockets in the Valley. Sweden? Almost none. You'll have to get someone in Germany/UK/USA etc. interested in making a very foreign acquisition. Much harder.
+ Language and culture are barriers. Swedes have access to EU talent, but how many will move? Low rates of mobility in Europe. In America, people move 1000Km for a job, less so in Europe.
+ Want to go IPO? It's a lot easier for an American company.
Do you know why at YC, young entrepreneurs are seriously pressured to simply 'move to the Valley'? It's related to all the reasons above. These are essentially the reason that 'the Valley' is a powerhouse, compared to other places - even when 'other places' may have consistently higher degrees of education etc. etc...
I completely disagree with this statement and I'll have to call your sources for it. Even more here in Stockholm, but mobility around Europe for tech jobs is huge, I work at Klarna with 45 different nationalities. Same thing happens at Spotify where I have friends working in.
Hell, even in a small startup and a small to medium-sized company where I know people working at they have people from 10 different countries in Europe, even from richer countries such as Germany, England and Switzerland.
I have friends working in Dublin, London, Berlin, Frankfurt, Zurich and all of them working with different nationalities all the time.
http://www.technologist.eu/sweden-the-land-of-unicorns/
Neo-liberalism has gone too far. Anything that limits the company power to do everything is seen as "anti-business". It is not like that, good rules improve fair competition. That rules can hurt ONE or a FEW companies while creating a more healthy system that benefits the rest of companies and citizens.
Yes. It is seen as freeloading. Which, in fact, it is[1].
> 2) They are culturally anti-business and anti-entrepreneurial.
That is simply ridiculous, unless you want to define a recognition that externalities are a thing as 'anti-business'. Or put another way, what exactly is it about the profit motive that transforms bad behavior into good behavior? (You may define 'bad behavior' differently, but that's a different question.)
A friend who lives in Sweden, and has spent several years living in the U.S. put it well. Americans are weirdly uptight about sex, believing that public acknowledgment that humans like rutting at least as much as other animals somehow poisons the commons. Swedes are weirdly uptight about preservation of the commons itself.
It isn't anti-business to recognize that commercial activities, like any other activities, effect others in potentially good and bad ways. Every first-world country does. Nordic countries generally value the social norms and structures they've built more than they value enabling the scraping every possible niche for profit.
[1] You may not like the bundle of services provided, but the obligation exists. That's how government works, at least until someone builds that infinite-land machine. I'm really not in the mood for a rerun of Net.libertarians vs. Rousseau, so won't respond to that argument.
Also there are lot of various free courses about how to do reporting and accounting for new businesses. And one can do the accounting oneself in a spreadsheet and/or free web sites when the business is small.
Losing crazy amounts of VC cash to [often illegally] compete against traditional companies that must be cashflow positive. It's not a level playing field. Laws exist so that drivers could make a livable wage; Uber is devaluing the medallions they've invested in.
Meanwhile in Europe they're still trying to argue that they're not a taxi company.
There's real disruptive innovation where laws don't exist yet. Digital data mining, surveillance, self driving cars, AI, etc.
Let's not confuse the two.
Do you think the Greeks, who have made tax evasion a national past-time, are doing it better?
> 2) They are culturally anti-business and anti-entrepreneurial.
In almost any ranking I've seen, Nordic capitals (Stockholm, Copenhagen, Helsinki) scores at the top of the list of startup-friendliness.
> Obviously that has evolved a lot over the last 30 years, but the underlying cultural phenom is still kind of there.
Jantelagen ja. But is it a problem in practice for venture capitalists?
Typically this should lead to more competition there. Is something preventing that? Taxi thug groups (i.e. cartels), lack of space, ..?
If the price and product are clear, and if there's opportunity for competition, well.. I don't want to sound too libertarian, but, you know... :)
Why would any taxi-driver feel like upsetting the apple-cart?
Of course it's only a few bad apples that ruin the basket, but it's not unheard of.
There are some consumers that are naive (tourists in this case) and you can exploit them (go to the airport, and wait until you get a naive guy).
Now, suppose a competitor can find a way to educate consumers: you print pamphlets listing the true costs and hire someone to distribute them everywhere. Now tourists are well informed, but what's the benefit for the competitor? It just did something expensive but now he faces informed guys that will only pay the competitive price. So in equilibrium no one will teach the naive consumers.
I get that something is preventing that, otherwise we wouldn't be having this conversation. But what is? Can we fix that instead and make the market more accessible?
If not, then regulate away, of course.
There's almost certainly a taxi next to it that only charges X, and all taxis are required to clearly post their prices in their windows. The taxi charging 3X is simply banking on the fact the enough people are operating with incomplete information and will just hop into the first taxi they see without fully understanding how the system works.
As a tourist flying into Sweden, it wouldn't have occurred to me that the fare would be unregulated, and that I would need to exercise caution when choosing a licenced taxi.
(I may have just come from another, less logical subthread in this topic)
Incidentally, this is part of the vehement objection to Uber - on-demand pickup still happens, which breaks the stranglehold on cab ranks.
I was in Stockholm over the summer, and prior to going I read about this beforehand on almost every site I visited. Is it the most tourist friendly thing? No, but it is listed in big numbers on the taxi. It only takes seeing a few taxis to get an idea of what is a good price. Everything in Stockholm ended up being expensive, so the taxi was just a minor inconvenience.
Ride-hailing is what Uber and Lyft and ArcadeCity and Fare and all the rest of the taxi-apps offer.
You're omitting the most important thing here: the actual taxi traffic permit. That's the hard part in this process.
Not in Sweden. There are probably hundreds of taxi companies in Sweden and starting a new one is basically no harder than starting any other company.
1. You need to show that you have financial resources of 100 000 SEK for one car and 50 000 SEK for all subsequent ones you're registering for. This needs to be reviewed and attested by an auditor. https://www.transportstyrelsen.se/globalassets/global/blanke...
2. You need to be a certified traffic manager. https://www.transportstyrelsen.se/sv/vagtrafik/Yrkestrafik/G...
Nothing super complicated but it's not just getting an extended driver's license like OP says.
Uber found a way to abide by New York State's existing regulations for a special license for drivers and commercial insurance. Everywhere else it plays make-believe - 'we're just a technology company' - for as long as it can.
The end-game in Europe is probably that Uber Technology will abandon its ambitions to be a not-a-taxi company, and provide its app to local transportation companies who are already regulatory-compliant.
The taxi company that I used to drive for was large enough to build its own modern [1] app-based dispatching system. So they don't need uber's technology anymore.
If nothing else, I appreciate that Uber is pushing taxi companies to develop on-demand hailing apps. I've started seeing local companies advertise them specifically in response to Uber's success.
If the taxis got together and created an app that you could hail a taxi, track its progress, and follow it to your destination, and take the payment automatically, there would have been no (or far less) need of Uber.
I have had several experiences where I called for a taxi, but none arrived. Then I went to the main road and hailed one within minutes.
So it's all about user experience.
They did. Before Uber even existed.
Check out http://www.taxi.eu/en/
This ability to always get a ride within a few minutes, no matter where and when, that is what I (and many others) like about uber. Tracking cars in the app is nice but hardly the defining factor.
In comparison, Uber recently came to this city and it's very poor. It's more expensive than a red truck and the only possible extra convenience it could provide is a pick up from your door, but most red truck drivers would arrange that with you too. The Uber drivers here also seem not to have had any training.. I gave up trying to use it when the driver asked me to walk a few hundred meters instead of picking me up where I was on the GPS.. that's not the point! I'm glad to continue using red trucks
The "ride-sharing services" that make profits are already illegal in Sweden according to court decision, since it essentially means "taxi company without the annoying taxes". And consequently UberPOP has been suspended in Sweden along with several other EU countries (as also noted in the original post).
So the new proposal mostly seems like a way to clarify legislation: If you do something systematically to make a profit, we call that business and you pay taxes and follow all other relevant legislation (worker's rights etc). Makes very much sense to me.
I'd much rather use Uber.
You don't have to use fake taxi's, that's your choice. A regular taxi ride in Stockholm and a Uber ride (depending on the time of day) usually don't have a big price difference between them. Unless you want to take one of the Tesla taxi's.
My brother lives there and explained to me how they can be identified, I otherwise would not have known.
Usually when I go to a new location, doing a Google search or two on these things proves helpful. The number plate stuff is on wikipedia and the VisitStockholm.com website for example: http://www.visitstockholm.com/en/Good-to-know/Getting-around... has all the information on taxi's, how to recognise them, what the regulations around them are and other methods of getting around.
A little bit of research upfront can spare you many unpleasant experiences no matter where you're going and regardless of if you know a local or not.
Checking a travel guide before they visit a new country?
The driver would be incentivized to get you to your destination quickly and there wouldn't be that awkward tension about whether the guy is taking the best route, driving too slow or whatever.
Even if they occasionally lost money because of freak traffic conditions, I'll bet they would win over a lot of customers.
On the technology side... Gett.com seem to be offering an identical solution to Uber with the bonus of fixed price service within certain bounds. Looking at trips within a few miles of the city centre it'll offer a fixed price or "by the meter". Anything too far out however and it'll offer only "by the meter". Still, worth a punt?
EDIT: Bit more of a review...
I've contacted their support in the past and it's been pants. A couple of weeks for a human reply.
I also don't like how you have to decide the tip before the trip ends. Once you're dropped off, 'bing' the money is gone. I guess this is a culture difference but I prefer to decide to tip once I've decided I'm happy with the service. it's not a given.
Last time I took an actual taxi in a new town, the driver spoke next to no English, misunderstood my destination, and got lost 3 times. He tried to drop me off in the middle of the woods because his outdated Garmin told him to. He then tried to charge me ~$80 because of all the bizarre detours, demanded cash instead of a credit card (at the end), and tried to follow me when I objected.
That's exceptional, yeah, but not hugely so. Uber's biggest value to me is the guarantee that the driver will have clear directions, not try to change route, take a credit card, and otherwise not scam me. The cab industry in a lot of places is really corrupt compared to other businesses.
Basically the things that create a market for Uber (limited taxi permits, low tech regular taxi) aren't as pronounced in Sweden as they are elsewhere.
Uber is a taxi company like any other.
Anyone have a reason to think this won't be the outcome if they can't fight this in court?
Unless you think they can somehow turn around $2bn loss on $1.8bn revenue in a very thin margin business.
http://www.nationalreview.com/article/256612/welcome-machine...
I guess it is a hard market, sure, but nobody forced them to compete against simple ride sharing websites, but they did, and now try heavy handed tactics once they captured a big piece of the market... /rant
Honestly, just how many ways can we find to prevent innovation from disrupting the protected by daunting regulations from occurring? At times I am beginning to wonder if this is less about protecting current businesses as it is government losing control over its people.
What is the difference between "ride sharing" and "taxi" anyway? Sounds to me like they're saying that ride sharing is people sharing their car, and taxi is if you're for-profit. If Uber wants to be for profit, they need to follow the taxi regulation.
Tax authorities are gods in Nordic countries.
'No meter' = 'no way for tax guys to know what's what'.
Swedes are not stupid though ... Uber might respond with giving up GPS data of rides to tax authorities. This would not be entirely unreasonable and would quash the specific legal point.
My bet is there is more going on here though ...