New Law on Taxis Takes Effect

Taxi in Iceland's capital, Reykjavík

The much-protested law on taxis came into effect this April 1, leaving many taxi drivers uneasy about their future as a new company enters the market.

Among other reforms, the law loosens requirements for operating a taxi and removes restrictions on the number of taxi permits. According to lawmakers, the intent is to free the taxi market and to bring it up to date. The bill was opposed by interest groups, such as the Federation of Icelandic Taxi Drivers, who say it will both drive down their wages and lead to a decline in service quality.

Read more: Taxi Drivers Stage Protest in Reykjavík

The bill, however, was not opposed by all. Hopp, a popular electronic scooter rental company, is now making moves into the taxi market.

Reykjavík residents will soon be able to order a taxi through the Hopp app, 15% cheaper compared with traditional taxi services in Iceland. The law now also allows taxi drivers to operate within multiple companies, meaning that drivers in Iceland’s established taxi fleet may now choose to also work part-time gigs at Hopp as well.

Eyþór Máni Steinarsson, CEO of Hopp, stated to Morgunblaðið: “Times change and so should transportation. We can drive down prices in the taxi market, and we aim to be 15% cheaper than our competition. There is, of course, a vocal minority who are concerned about these changes. We only accept taxi drivers who are legal and registered. But of course, we would like to see extensions there as well. The barriers in becoming a registered taxi driver don’t quite match the spirit of the times.”

Eyþór Máni continued: “This is the next step in the revolution against the private car. The best car is no car, but the next best is the one you share with others, and we want to make it easy for people to share cars, both the ones they drive themselves and the ones others drive. We also believe that many working taxi drivers would be willing to work for more than one station and will be happy to receive more fares and a more transparent way of assigning them.”

Read more: Taxi Drivers Demand Hearing with the Government

Some, however, are still concerned over the shakeups in the taxi market.

Daniel O. Einarsson, chairperson of the Federation of Icelandic Taxi Drivers, stated: “They begin by undercutting the competition to establish themselves in the market. But then they raise their prices. We’ve seen this strategy before, just like how Uber operates.”

With the new taxi bill now in effect, Hopp has opened applications for new drivers. Hopp has stated that they hope to launch their taxi service when they have enough drivers, hopefully this spring.

Taxi Drivers Stage Protest in Reykjavík

Taxi in Iceland's capital, Reykjavík

A heated meeting took place among taxi drivers in Reykjavík and Suðurnes yesterday evening to discuss a bill on taxi services sponsored by the Ministry of Infrastructure, RÚV reports. This morning, taxi drivers staged a protest outside the Minister’s Residence in Reykjavík.

Protest stopped by the police

Outside the Minister’s Residence in Reykjavík this morning, numerous taxi drivers staged a protest, which was eventually stopped by the police; expressing their strong objecting to a new bill on taxi services, taxi drivers drove down the street and honked their horns in front of the residence.

Drivers were not allowed to enter the government meeting inside the minister’s residence, however, but Daníel O. Einarsson – the Chairman of the Federation of Icelandic Taxi Drivers (Bandalag íslenskra leigubílstjóra) – took the time to read out a special appeal, Fréttablaðið reports. He requested that the processing of the bill be postponed.

“The Federation asks the government to grant working taxi drivers a hearing as regards the bill on taxi services,” Daníel stated. Approval of the bill would open up the door for ride-share services like Uber, which have gained a foothold abroad.

Abolition of designated taxi zones and more licences

The Ministry of Infrastructure posted the bill to the government’s consultation portal (Samráðsgátt) in July. As noted on the website, the draft of the proposed law is similar to former bills that have previously failed to pass through Parliament.

Among other things, the bill proposes the abolition of designated taxi zones and removal of restrictions on the number of work permits. It also removes the obligation for taxis to operate through designated stations and proposes alterations to requirements for those who intend to work as taxi drivers.

Worried that income will be lost in the form of foreign currency

In an interview with RÚV, Guðmundur Börkur Thorarensen, Managing Director of BSR Taxi, stated that the association was dissatisfied with the bill:

“We are concerned that a large part of the drivers’ income, 30%, will leave the country in the form of foreign currency; that it will reduce income among drivers; and make the service that we have been offering, over the past few years, much worse,” Guðmundur remarked.

Guðmundur maintained that BSR had repeatedly pointed out that more work permits were needed: “But the idea that we should just completely open it up and that there would be no filter as far as quality standards are concerned or the number of drivers, that’s never been on the table.”