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Uber’s decision to pull out of Denmark and its wider political implications

Uber
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Danes are going to find their commute get somewhat harder. Cab aggregator Uber has announced that it is pulling out of the country following  new taxi law that forces cabs to comply with a whole bunch of taxi laws including mandatory fare meters and seat sensors.

The issue here is this: Uber allows its drivers to use their private vehicles as cabs. Taxis are cool because they already comply with all these requirements most of the times. However, private vehicles don’t really comply with all this and this particular law will force Uber drivers to install a whole load of additional stuff into their cars — which is something they may not be willing to do. Previously, the company had said that it will make a move against the proposals and oppose them for as long as was required.

However, seeing that nothing was coming out of that particular strategy, it has decided to shift gears and is now going for a much more aggressive approach. Announcing that it was shifting out of the country could be a move aimed towards putting more pressure on lawmakers.

The company is not unique in facing this problem. Nor is it facing it for the first time. When you are a global enterprise, you can’t very well stand by a uniform set of rules and keep following them. Your operations are dependent upon the local rules and regulations as well and must comply with them. We have seen the same thing happen multiple times in countries like Russia and China, which have blocked services like Facebook, Linkedin simply because they won’t agree to censor posts or establish data centers within the country. Similarly, Google sometimes gets into trouble with its Mapping service because different companies have different sets of regulations they want it to follow.

The company currently has over 2,000 drivers in Denmark. The app is used by as many as 300,000 Danes. While moving out of the country will hurt its business, Denmark still has relatively small operations as compared to Uber’s global presence. The company appears to be signaling that if the worse comes to the worse, it will not have any qualms about pulling out of a country. What remains to be seen is whether the threat of having one of the largest taxi services in the world pull out of the country prompt the Danes to rethink their decision.

A bibliophile and a business enthusiast.

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