Future of Uber in Iceland Uncertain Skip to content

Future of Uber in Iceland Uncertain

Smartphone-based car-service provider Uber has recently made inroads into markets across the world—while simultaneously facing a barrage of legal challenges—will Iceland be next?

Unlike most other car-services, Uber customers use a smartphone app to summon a car to their exact GPS-coordinated location.

Several price levels are offered including the standard low-cost UberX, UberSUV which seats up to six passangers, and luxury car services UberBLACK and UberLUX.

Before confirming a car request, customers can calculate fare-estimates based on their planned destination and their Uber service of choice.

At the conclusion of the trip, the credit card attached to the user profile used to page the car is charged—making payment both cash and hassle free.

The driver and the passenger can then anonymously rate each other, and any driver repeatedly given low ratings is dismissed from the company—conversely drivers are free to pick their own customers, and while they cannot see any identifying details until the trip has been confirmed by both parties, they can see the user’s rating; so badly behaved customers might find themselves waiting longer than they would like.

Last December, business weekly Viðskiptablaðið reported that Uber had collected enough signatures to justify the introduction of services in Reykjavík.

The signature requirement is self-imposed by the company and intended to guarantee a market of adequate size.

Uber has, however, yet to send in an application to the Icelandic Transport Authority.

Ólöf Nordal, Minister of the Interior, is positive about Uber’s future in Iceland.

“I think it would be prudent to look into relaxing regulations in this market,” said Ólöf of the Icelandic taxicab market, in an interview with Fréttablaðið yesterday.

However, not everyone is happy about Uber’s potential expansion into the Reykjavík transportation market.

As in many other places, taxi companies in Iceland have condemned the idea.

“We trust that the [Minister of the Interior] will make the right decision and make the safety of customers and the industry as a whole her guiding light,” said Sæmundur Kr. Sigurlaugsson, managing director of taxi company Hreyfill to DV yesterday.

Current regulations on taxicabs in Iceland are strict, which Sæmundur believes is necessary to protect the small market in Iceland.

“Then it is of course a question of ensuring consumer safety,” added Sæmundur, claiming that an Uber car is prepaid and asking how the consumer would be protected if an ordered car then failed to show up.

It should be noted that those claims appear to be based on a misunderstanding, as Uber cars are not prepaid, but rather paged through a user profile that must include a valid credit card, which is then charged at the conclusion of the trip.

In recent months, several media outlets have similarly somewhat misreported the extent to which Uber services have been restricted or banned abroad.

The majority of such bans are limited to one controversial service feature variously called UberPOP, or UberPOOL: a ride-sharing service which allows non-certified drivers to pick up carpooling customers for a much lower fare.

UberX car service, the most popular feature offered by the company, is provided by drivers with all certifications and licenses required of them by local laws, and are overseen by their closest Uber branch.

What differentiates Uber from other taxi companies is primarily the fact that, while drivers are subject to some regulations, requirements are generally not as stringent as those made of certified taxi drivers; drivers own their own vehicles, which are registered as civilian vehicles rather than taxis; and drivers’ reliance on technology for both payment and locating passengers.

Uber drivers are, for instance, in most cities, not allowed to pick up passengers hailing cabs, or to wait in taxi lanes at airports and other transport hubs.

In some places Uber has partnered with local taxi companies to offer Uber Taxi, which enables those taxi companies to access the app, while continuing to operate privately.

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