So, they want to encourage ride-sharing in the original meaning - carpooling. Not the "taxi company in disguise" meaning. Sounds fair enough to me.
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.
"So, they want to encourage ride-sharing in the original meaning - carpooling. Not the "taxi company in disguise" meaning. Sounds fair enough to me."
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.
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.
"As a Swede:
1) Cheating on taxes is quite literally stealing from every other person in the country."
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.
>You can't have 0% corporate tax and free healthcare and education.
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?
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.
I think you should study the field of tax incidence a bit.
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:
> Cheating on taxes is quite literally stealing from every other person in the country.
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.
Do you live here in Scandinavia? Because the comment on entrepreneurship sounds VERY odd for me living here in Stockholm. I've literally never seen an instance of that, quite the opposite. Being a business person is just an occupation as any other, what Swedes are quite against is for you to make 100x to 1000x what your workers earn just by being the owner or CEO of the company.
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.
1) They are super, super aggressive when it comes to tax things. Cheating on taxes is worse than some major crimes!
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.
misrepresenting anything - even a minor issue to the tax authorities - is a fairly serious crime
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.
But isn't the system the same as we have in Finland: although employers report to the tax authorities and deposit PAYE, the tax authorities make a calculation and send it to the employee. But the individual is still responsible for declaring any income. You don't have to send back the report, if it includes everything and you aren't making any deductions. But if you have income that's not known by the tax authorities, and you don't report it, that's a crime.
Yes, that sounds similar. My post was not meant to contrast Denmark with the world, but Scandinavia with the US, where it's the task of the individual to report any income. This makes it easier make mistakes or to cheat.
Sure, but my point on the other hand was that also in Scandinavia, the responsibility of submitting a correct report still ultimately lies with the taxpayer.
> 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.
Denmark has gotten a lot better at encouraging business growth, lowering the capital requirement for registering a private company and introducing a new "start-up" business type that costs 1-DKK to register. With that business type you have three years to grow up to the capitalization level of private company and your qualification as such once you do achieve that level is pretty much automatic, at least as far as I can recall from my Knowlege Based Entrepreneurship class from a year ago. The start-up business type is mostly unknown, as it hasn't been marketed very well to the public. I'm glad I got to learn about it because it seems quite a bit easier and cheaper than starting a similar company in the US.
The Nordic companies are not 'the best' at startups, not remotely close.
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.
You are contradicting yourself and honestly I don't see the point of correcting these falsehoods but I will note that Sweden and other Scandinavian countries are doing pretty damn well internationally considering how small the populations are [1][2][3].
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...
> + 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.
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.
That's an odd statment. Not all startups need gigantic cash influx nor (oh god) 1000 engineers. 100 million a year businesses can operate with under 100 core developer staff (need more for other operations of course but those are generally easier to hire for).
> 1) They are super, super aggressive when it comes to tax things. Cheating on taxes is worse than some major crimes!
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.
I am a Swede and I kind of disagree with what you are saying. Maybe creating a company was considered "dirty" in the 80s but nowadays it is completely reversed.
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.
> "So, they want to encourage ride-sharing in the original meaning - carpooling. Not the "taxi company in disguise" meaning. Sounds fair enough to me."
> 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.
I don't believe so. UberX is not ridesharing, UberPOP is. Also, if I am mistaken, please point me to the source in the article that actually states that they're targeting UberX. The article explicitly mentions UberPOP, if it would affect X I'm fairly certain they would've mentioned that along the way.
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.
UberPOP is what we have in Helsinki. You're able to split the fare with multiple users, whom you know, going the same route as you are. Imho actual ride sharing would be the "taxi" picking up random other people along the way and then the service billing everybody fairly in the end. With UberPOP fare splitting is just a convenience feature of the service, i.e. "instead of you giving me that 5 euro note for your share of this taxi ride, let's do it automatically".
Maybe pop works differently in places which have both it and X though. Those descriptions certainly make it seem like that.
Well, the problem is that for some reason Uber and its drivers do not think they have to live up to the same regulations that taxi drivers do, even though they provide the same exact service and compete for the same customers. That is called unfair competition.
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 :-)
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.
In Norway there is definitely no hostility in any form towards entrepreneurship. In fact it is safer to start a private company here as after closing down the business one still can apply to some social support from the state.
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.
I heard that Norway is great for new businesses. Like if you are located outside the city you can pay lower taxes, that's not the case in Sweden. Also the culture seems a bit different when it comes to startups. A friend of mine said that it's easier to attract investors in Norway although the country is smaller, I don't know how deep those differences go but norwegians are probably more open to new companies.
In most places they are breaking laws and calling it 'disruptive innovation':
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.
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...
You started talking about "anti-business and anti-entrepreneurial", now you moved the goalposts to "big business".
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.
The guy who wrote "the girl with dragon tattoo" was a leftwing journalist. There is no cultural epitaph of pervasive leftist majority anymore in the Nordic countries. If anything there are much more nationalist conservative right-wing views among the common population because of the recent waves of ME immigrants. The media by an large is still left.
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.
Possibly: young Swedes on HN talking about young cool startup culture vs. someone who has lived around the world, in many countries (i.e. strong comparative basis), including a fair bit of exposure to Scandinavia, and worked for the European Government (European Investment Bank) towards establishing comparative basis for entrepreneurial and business clusters in USA and EU.
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.
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.
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... :)
Not really. There is an econ paper that explains why (Xavier Gabaix's shrouded prices theory), but the idea is this:
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.
But isn't this exactly the duty of an entity like, say, the municipality or the airport administration? That's one of the major roles of the state: To step in when there is no profit motive to do the 'right thing'.
Indeed. But I was replying to the pro-libertarian point of view, where municipalities or airport administrations play no role in the taxi industry, which sorts any problems "by itself"
I'm pretty sure I've seen exactly this - information booths at airports saying "this is what a licensed cab looks like, this is the fare to downtown, don't be fooled". It's not universal, though, because you'd need to get rights to put up the sign.
Also, at least in Sweden, each licensed taxi company sets their own fares so the problem isn't one of licensed vs unlicensed taxis. A sign saying you shouldn't pay more than X to get down town could work, but who gets to decide what X is?
Or just set up a taxi next to it for 2.5x the price? Or maybe force taxis at airports onto a centralised exchange with a big electronic comparison billboard that everyone can see?
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?
Or just set up a taxi next to it for 2.5x the price?
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.
In the UK, taxi rates are regionally regulated, with local councils dictating the maximum fare (per mile, per minute waiting in traffic, etc). I thought this was fairly common (in first-world countries).
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.
So... we got so used to being coddled we can't do the smallest amount of due diligence (per a comment above, "will just hop into the first taxi they see").
Taxi ranks at (wealthy) airports are almost never subject to market competition. To avoid crowding and crime, some number of drivers or companies get permission to pick people up at the airport, and everyone else is shut out. Other taxis can drop you off, but not pick up a return fare. Usually this comes with fixed prices to avoid extortion, but if it doesn't you get this oligopoly pricing.
Incidentally, this is part of the vehement objection to Uber - on-demand pickup still happens, which breaks the stranglehold on cab ranks.
> 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 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.
> 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.
You're omitting the most important thing here: the actual taxi traffic permit. That's the hard part in this process.
I'm currently going through this process and there's some bureaucracy involved:
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...
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.