BEFORE AND AFTER DEREGULATION

Stockholm, Sweden - 10 Years Experience
by Pepe Arninge
Taxi Driver, Journalist
as published in the February 1998 issue of Call-Sign
Journal of Dial-A-Cab, London, UK

After more than seven years of deregulation, the situation for the honest and hardworking Swedish cab driver is still the same. Trying to survive on an income level lower than the minimum standards of the Swedish social welfare law. Many drivers have suffered badly both from nervous breakdowns and heart attacks as well as personal bankruptcies and heart-rending divorces.

But why this situation. And what happened to the taxi industry to put people within it in such an unprofitable position?

Well, before 1990 there was only one major taxi company in each Swedish city. Permits, which were very tough to obtain, were issued by the City Council in each community after a thorough check of the cabby's credentials and background. One mistake, like a speeding ticket, was enough to refuse an applicant a permit to operate his or her own cab for years. And as this wasn't enough, there was also a queue to get the chance to apply for a permit - in most cases a waiting period for 12 years or more.

At the same time, these were the golden years of the Swedish and European economies. The yuppies overflowed on the streets of Stockholm and hailing a cab, which at the end of the 70's and the first years of the 80 's had been considered a bit luxurious, was something everyone did around the clock! These were great times for the Swedish cabby and most of the guys and gals made good money. Some even made small fortunes.

But times change. During the autumn of 1988 the Conservative's, together with the Liberal's, proposed a total deregulation of the Swedish taxi industry. With arguments not even close to reality, they convinced the Social Democratic leadership to vote 'yes' to the new ideas; a campaign that succeeded after an intensive lobbying period within the political parties and among their representatives.

After an energetic debate, in which one of the most positive parts to the alleviation was the Swedish Taxi Association, the resolution for a deregulation became a fact late December 1988 though without any real structure or realistic goals for the future transportation industry. The only thing one knew for certain was that, with the start on July 1st 1990 , it would be easier than ever to get a taxi at any time of the day.

UNIFORMED DRIVERS

To deregulate an industry that has been untouched for ages cannot happen in a single night. At the same time, due to the major changes within the application process, it became really easy for anyone to get hold of a taxi permit. Unfortunately, there were also those with criminal records that got hold of the sought-after windshield badge.

To Taxi Stockholm, which had had the grip of the Swedish capital's taxi industry for more than 96 years, the changes became those of the extraordinary kind. A very costly computer system, designed by Motorola and bought from Canada, totally hollowed the company's economy for years to come and the redesign of all cabs, to strengthen the taxi company's outdo or profile, was a frustrating process in which specially trained inspectors patrolled the streets to report those drivers who didn't wear the new, blue uniforms.

During the first years, there were many protests among the drivers who didn't like the new order as they thought they were being messed around. But today most of the cabbies have accepted the situation as it is. Therefore, despite the fact that most drivers are, and always will be individualists, the visitor to Sweden today can be sure of one thing - to always be met by a uniformed taxi driver.

FOOD, COCA-COLA AND TAXI FARES

Before deregulation, each cab in Sweden had the same type of taximeter and exactly the same price. The fare was set with a combined time/kilometer tariff, which made a trip in a cab anywhere in Sweden both similar and quite easy to calculate in advance. Things like fixed prices or pre-calculated fares were forbidden in law and each trip went strictly on the meter.

Therefore the night between June 30th and July 1st 1990 became more than a new way of thinking for tens of thousands of taxi drivers. Suddenly, there wasn't just one single cab company in Stockholm, there were 21. Each of them with fantastic names, odd roof lights and - most important of all - each of them with different ways to calculate a fare.

Frequently, the tax is within one specific company also used differentiated prices, even though the thought was that cabs belonging to one dispatch should use the same price setting. But nobody really cared, or were too occupied making money on his or her own by finding optional and competitive markets to taxi driving like selling food, tickets and Coca-Cola! Some even gave their passengers the latest films on monitors mounted in the rear seat of the taxi.

AIRPORT OVERPRICING

During the first three years of the deregulation, there were also those cabbies who specialised in working solely at Stockholm's International Airport, a place that before 1990 was more or less impossible to get even close to. Now, on the free market, they could demand any price from a newly arrived tourist. During the first year of the new era, there was such a chaotic situation with an overflow of taxis outside the airport's main entrance, that most attempts to rob passengers succeeded. And quite often , the customer had to pay as much as A3180 for a trip to downtown Stockholm, a 40 kilometer motorway ride that normally should cost about A335. At the same time, credit cards were not accepted by the drivers, in spite of recommendations from most companies, which resulted in a 'Pay-cash-or-die' situation which upset many of the visitors to Sweden!

It wasn't long before the rising number of complaints from both tourists and Swedes hit the Mayor's table and an investigation, led by the local police, started. Even though the price setting was free and no cab driver had done anything officially wrong, there were still some aspects of usury that started to interest the authorities. After spending thousand of hours following specific cabs that were among the most reported by passengers for profiteering, the investigations were shut down permanently. The reason? To pinpoint specific taxi drivers was too costly and nothing could be done about the problem as the deregulation was a fact and the market was free!

COLLECTIVE PUNISHMENT

So how about the current situation, seven and a half years after the big bang? Well, in Stockholm, which has been one of the most turbulent areas since the industry was deregulated, there are today still over 2000 cabs which do not belong to any dispatch and that still charge their own prices. Then there are another 3000 cabs, divided in 21 different taxi companies, in which Taxi Stockholm with its' 1600 cabs is still the biggest. This means there are still 5000 taxis in Sweden's capital; a city with a population of 1.4 million, most of them not used to using such a wonderful way of transportation as the taxi is, but still take the bus.

As the competitive situation and tight economical frames still are very much of a reality for most of the drivers, more than a few feel forced to hide some money from taxation to survive. "Thank God for the fixed prices ", some of them say, meaning that a fare that doesn't show on the meter and a passenger that doesn't require a receipt, saves the whole day.

Unfortunately, many of the drivers are therefore disrespected by society and pinpointed as dishonest and corrupt. Some of the spokesmen for the City Council even talk about "some kind of collective punishment" to get hold of the situation.

But is the Swedish deregulation solely the taxi industry's problem. Or is it something that concerns the whole of society, even though most of the authorities' representatives choose to shut their eyes?

Well, my own personal opinion is that this is a major problem that ought to be solved by the authorities as the deregulation was forced onto the drivers - against their will.

Controversially, an Order was made in October 1997 by the City Council which determined that only the three biggest taxi companies - including Taxi Stockholm - would be allowed to pick up at Stockholm Central train station following complaints against the 'independent' taxi drivers overcharging.

Unfortunately, the situation led to rioting by the independent drivers. The police became involved and the situation ended with the independents having a sit-down strike before being carted off. The station now employs smartly dressed inspectors - known as yellow jackets - to ensure that only the correct taxi companies pick up at the station.

After speaking with cabbies around Stockholm during the last ten years, I can tell you Londoners on Dial a Cab that 95 per cent of your colleagues over here hate the present deregulated situation and most certainly do not want anything more than the possibility to survive in their occupation. Unfortunately, the City Council lost a grip on the taxi industry years ago and therefore - in pure panic - have forced new techniques onto the taxi owners in an attempt to stop the never ending tax fraud and the accelerated overpricing.

Just during the last four or five years, there have been over ten major updates of the computerised taximeters, mostly by demanding that the owners install new software into the cabs. This has, unfortunately, put the taxi owners into even worse economic stress as they have been forced to borrow even more money to pay for the unwanted goods.

As many taxi owners have now given up their jobs and sent their permits back to the City Council, there are always newcomers who want to try to make some fast money. By establishing a small company, which is easy and takes a week, they then run their business without any dispatch services or book-keeping for the permitted 18 months and then put the company into bankruptcy. The money they have made, without paying any taxes or social welfare, is placed abroad on an account that isn't reachable for the taxation authorities.

Is there then any salvation to the honest core of taxi drivers in Sweden? As it looks right now - not really. As the authorities will not admit that they made a terrible mistake when they chose to deregulate the industry at the beginning of an economic recession, there will only be survivors among those who cheat and overprice. The rest - the majority - are and will continue to be losers as long as nobody take their part when discussing the problems with the politicians.

I feel sorry for the honest and hard working Swedish taxi driver who has to live this kind of life. Or as a spokesman at the City Council, who perhaps understand the problems better than most, said: "I think that a re-regulation is the only way to solve this tragic mess that has been part of each taxi drivers life for more than seven years".

Pepe Arninge
Sweden


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