By Mack Wilowski, National News Assistant Editor
Uber recently announced it will be shutting down its operations in Denmark. The Northern European country is seeking to adopt new taxi laws that require numerous requirements for drivers such as mandatory fare meters that would prove burdensome to Uber’s and its drivers’ profitability. It is part of a continuing series of setbacks in the ride-sharing group’s European market, as it has recently encountered problems in London, Paris, and Madrid.
European regulators are debating on whether to regulate the company as a digital services firm or as a transportation company. Uber established the Danish branch of its innovative mobile app and operations service back in November 2014, but lawmakers’ complaints toward the firm have persisted since. Regulators in Denmark claim that Uber imposes unfair competition by not meeting established legal standards by which taxi services in the country are required to abide.
Uber has approximately 2,000 employees working in Denmark and about 300,000 users.Unless regulations remain static and the new rules not imposed, Uber would not be able to operate efficiently in the country.. Last year, prosecutors in Denmark alleged that Uber was operating an illegal transportation service, citing its assisting of two drivers previously fined for violating traffic laws.
Uber first opened its services to major European markets back in 2011, but the experience has not been smooth sailing ever since. The San-Francisco-based firm has faced numerous legal challenges and other problems. Two of its drivers faced physical attacks in Paris, and two senior executives in the city have also faced trial for running an illegal branch of the transportation service. Uber-Pop is another service adopted by the company that uses non-professional drivers. The service was banned in England, the Netherlands, Belgium, France, and Spain, on the account that licensed drivers should be classified as workers with access to the minimum wage, paid holidays, and appropriate compensation.
Danish politicians in favor of strict regulation and labor laws have stated that Uber’s departure from the country would benefit Denmark by providing work for up to 6,000 potential taxi drivers. Uber will be moving its main base of operations and regional headquarters to the Danish city of Aarhus, where it employs forty people in infrastructure-related fields. Additionally, Uber has stated it would allocate resources to help Danish Uber drivers during the shutdown process and give them opportunities to seek new work.
In Brussels, some members of the European Commission have called for easing regulations imposed on transport and technology firms such as Uber, insisting that bans should only be considered as a last resort on companies that display negligence in contempt of business regulations.
Recently, a court case originating in Barcelona was brought to the attention of the European Court of Justice. Ultimately, the court will decide whether Uber should be regulated as a transport company or an information society service. If the court rules for the former, Uber will have to comply with all existing safety regulations, driver, and passenger rules. Should the court rule for the latter, Uber being an information service, Uber will be granted the flexibility to develop low-cost and unlicensed services throughout Europe; this decision will have a big impact on Uber’s future prospects in Europe. Until regulatory decisions are made, opportunities for the company’s growth in Europe remain uncertain.
A version of this article appeared in the Tuesday, April 4th print edition.
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