Share article:
Share article:

Taxi War in Brussels

A bitter taxi war has broken out in Brussels–and the protagonists are gearing up for yet more hostilities. At the centre of the furore is the California-based car-hailing company, Uber, which has expanded from 53 cities outside the U.S. to nearly 200, including Brussels.

However, it faces a barrage of challenges to expanding from traditional taxi services and companies who fear that it could undercut their business. Here in Brussels, as elsewhere, the two sides seem set on a potentially very damaging collision course.

Uber has certainly shaken up the taxi industry. The question is: is it too late to apply the brakes to its seemingly runaway global success?

For the uninitiated, first an explanation as to what the fuss is all about. With Uber, customers download an app that uses GPS technology to locate available drivers nearby and puts them in touch.

Uber drivers use this same GPS tracking technology on their smart phones, linked to external computer servers, to calculate customer fares. Other factors such as car type, the customer’s location and local demand (price surging), also influence the final amount charged.

Drivers sign up as independent contractors and are their own boss. The private hire vehicles cannot ply for hire in the street, wait at cab ranks or be hailed by passers-by.

The popular ride-sharing app, however, has run into big trouble in Brussels after pressure from taxi companies who say professional drivers are forced to pay more taxes and also incur other costs not paid by UBER drivers.

It has also faced stiff regulatory backlash in Europe where it is in a battle with authorities in France. London—Uber’s biggest market in Europe—is also considering new rules that would hamper its operations. Perhaps the most important people in this entire furore, the travelling public, are often forgotten.

So what do they think of it all? A short, unscientific poll by The Brussels Times showed that opinion is very divided.

Sales consultant Xavier Burea, 34, who lives in St Gilles, said, “I think Uber offers a very valuable service to the public, one which is a far superior experience to rental cars and taxis for many trips. What is not right is to artificially restrict the supply of available transportation options to the public by limiting the number of cars and drivers. Who wants to wait for 30 minutes during a high demand period for a ride?”

However, 45-year-old Patricia Eugene, an IT worker from Woluwe, advances a counter argument, saying, “It cannot be right that Uber can undercut traditional taxi firms like this. Surely new companies like Uber should be insured to the same level as taxis.”

Uber, a multi-billion dollar company, insists its service is only a digital platform and has long called on Europe to update its old transport laws, which it says don’t cater to new technologies.

In September, the Commercial Court in Brussels ruled that by allowing its drivers to be paid for carrying passengers without having a licence to do so, Uber was contravening fair trading legislation. It promptly announced that the service would be scrapped.

But Uber Belgium’s manager Filip Nuytemans says it has no intention of quitting Brussels without a fight, saying, “We have decided to stop our Uberpop service, but this is only a temporary measure as we have lodged an appeal.”

Indeed, far from retreating, Uber says it hopes to expand the UberX platform in Brussels that currently only has a few dozen drivers. Pierre Steenberghen, of the Taxi Association GTL, hit back at such plans, declaring, “Drivers experience extremely unfair competition through the use of UberPop. These are services provided by amateurs who are using their own car and are offering journeys via the Uber platform. They don’t pay any VAT and the trip is not insured.”

He says that it is because Uber drivers allegedly do not pay any taxes or social security contributions that allows them to be cheaper. “If we don’t have to pay taxes, social security and VAT then we can also drive at half price.”

However, support for Uber has come from no less a figure than Belgium’s deputy prime minister Alexander De Croo, who recently told The Wall Street Journal that “people shouldn’t be suing someone else bringing more benefits to customers“

He also argued that legislation in Belgium should be reduced in order to allow for companies in the “sharing economy” to grow. “We don’t want to become a dinosaur island in the middle of Europe,” he said.

However, support for Uber has come from no less a figure than U. S Republican presidential candidate Senator Marco Rubio, who has given a vigorous defence of the company, saying it is a “victim of a coordinated attack from established businesses.” 

“We’ve seen this play out with taxi companies lobbying to stop Uber,” he said.

While the rights and wrongs of Uber can be debated, what is clear is that their presence has caused occasional disruption to the city’s smooth running.

On 13 September, over 1,000 taxi drivers staged a protest in one of the main streets close to the city center as well as in front of the European Commission against Uber. Taxi drivers distributed leaflets and folders containing “7 reasons to prefer a legal taxi over an illegal taxi.”

Official taxi drivers complained of unfair competition by what they call the “Uberisation” of the economy.

In another recent novel protest, Brussels official taxis offered their services at half the normal price for one day. The Brussels judicial authorities have even carried out house searches in the offices of Uber, in order to find out whether the company violated Belgian laws in the field of insurance, safety, liability and tax.

So, where will it all end? Well, a “taxi plan” announced by the Brussels government could be the solution. If adopted, it would mean that new taxi services like Uber would operate on a legal basis, if they comply with certain rules in the area of safety, transparency, liability and social and fiscal legislation.

However, the tax authorities will probably need more details about how Uber works before that gains any further traction. The big problem facing the authorities and traditional taxi firms is that the travelling public have already had a taste of Uber and many seem to like it. Users of Uber in London, for example, have expressed their outrage at attempts to ban or restrict its expansion, with more than 100,000 signing a petition.

The moral seems to be that once you give people access to something new, it is difficult to rescind it. Transport is one of the few industrial sectors yet to be touched by the online revolution. Some suggest that instead of trying to suppress Uber’s unique selling point, traditional taxi services should perhaps consider lowering their prices and improving their service. 

By Martin Banks