Uber’s manager for Southeast Europe talks about company’s plans.
Taxi drivers have recently announced possible protests and blockades if the state does not prohibit Uber in Croatia; the Croatian Chamber of Crafts and Trades has sued Uber; Transport Ministry has established a working group for liberalization of taxi services market… Davor Tremac, Uber’s manager for Southeast Europe, spoke about all these issues and more in an interview with Večernji List on February 20, 2017.
You are a representative of the Croatian Employers’ Association in the working group established by the Transport Ministry for liberalization of taxi services market. What do you propose should be done?
We have proposed liberalization of taxi services market because we believe that it is too heavily regulated and we also advocate for additional regulations which would cover Uber’s partner-drivers. We want to modernize this sector and that our partners-drivers operate under the same conditions as taxi drivers, with regards to drivers themselves, their legal status, and their vehicles. The difference between a taxi driver and a Uber partner-driver is in the taximeter, which was a great invention 50 or 60 years ago, but today there are new technologies, such as our app, GPS… Taxi vehicles would still have some privileges, such as driving in yellow lanes and through pedestrian zones, which our partners cannot do. Taxis would still be a form of public transport, while our partners would work under the same conditions, but would not be able to take passengers on the streets, but only through the app.
How would you liberalize taxi services?
We would facilitate entry of new drivers to the market and forbid restrictions on the number of taxi licences, which some towns have and others do not. We would also abolish the requirement that drivers must have completed a three-year schools for skilled drivers, since that generally prevents entry of new drivers into the market, but does not guarantee safety. People graduate from the three-year high school when they are 17 years old, and then they have to wait for another year and a half to get a driver’s license. And when they get a driver’s license, they do not yet have the experience needed to be able to work. This school is definitely not necessary to safely drive a passenger car. We want to change this, to introduce a safe driving course prescribed by the Ministry, but it should not last for six months, bur for a week or two. As for companies, we have proposed a way how they should be licensed, how they should pay taxes and other issues, while vehicles would have at least four doors and could not be older than 10 years.
What about the price of taxi service?
It is essential that local authorities are no longer controlling the price because some people want to ride in smaller cars at a lower price, while others want to pay a higher price for larger cars. We should be looking forward, since electric cars will soon come to the market, and their prices will be similar to diesel cars, but fuel costs for them will practically be nil, so the prices will be significantly lower.
Chamber of Crafts and Trades has sued your company for wrongful advertising. Have you responded to the suit?
We have sent our reply to the court. We believe that the lawsuit is unfounded. Our lawyers have explain it, and we are now waiting for the court’s decision. Our partner-drivers are also members of the Chamber and they have publicly protested the decision of the Chamber to represent only a small part of its members.
Partner-drivers with whom we spoke are dissatisfied with the low price you have set for them. They claim they have to drive eight or nine hours a day to earn a minimum amount. How do you comment?
According to a survey we conducted a week ago among our partners, more than 70 percent of them said they were satisfied with working for Uber and that in the next six months they would certainly continue to drive, which shows that it is worth their while. The price is formed based on three elements – starting price, distance and price per minute. When you add it all up, they currently earn between 5.5 and 6.5 kuna per kilometre. This is almost the same level as the taxis. Net earnings of partner-drivers depend on what kind of car they have, how much they spend on servicing expenses… Our prices are acceptable to users because it is cheaper for them to use Uber than to drive in their own cars.
How many people are employed by Uber Croatia?
About 20 people work for Uber in Croatia, some of them are employed by the company itself, while some work through an employment agency, and we also have students who help with presentations for Uber drivers.
You currently have more than a thousand drivers. How many drivers have worked for Uber so far?
Very few drivers decide to stop driving for Uber. And in Croatia, it is possible to have at least 10,000 drivers. We will need another two to three years to reach that number.
How much income did Uber Croatia have last year, and much taxes were paid in Croatia?
It is better to talk about the Uber system, which includes the company and all partner-drivers. The income of the whole system in Croatia could soon reach the income of the entire taxi sector. Given that there are about 2,200 taxi drivers and they have incomes between 150,000 and 200,000 kuna a year, then we are talking about additional 400 to 500 million kuna market which we have created. Of this income, which was small at the beginning of 2016, but is growing as time goes on, 25 percent goes to Uber. We use this money to finance marketing, app development, customer support to partner-drivers and to users, cost of credit cards transactions, etc. We still give to the market more than we get through the 25 percent share. Uber Croatia pays taxes and contribution, while partner-drivers pay value-added tax, their own salaries, taxes and surtaxes, salary contributions, excise taxes on fuel, corporate taxes. For each trip, they pay around 35 percent in taxes. It is easy to calculate this because each of them has to register the invoice for each ride.
How do you comment on statement by taxi drivers that they will block the streets of Zagreb if the state does not ban Uber?
Protests are a relic of the past, they harm the citizens, because they block access to public services, and taxi drivers damage themselves as well. We have seen how many people were outraged by their announcement, and if the protests were really to happen, people would be even more bitter.
You have hired a security services company for the safety of your partner-drivers. What is the role of security guards?
Attacks on our partner-drivers have intensified since the working group for liberalization of taxi services was established. That is a targeted pressure on Uber and state authorities. We are talking about verbal clashes, attacks with sticks, breaking windshields… At the Zagreb airport, they even pulled a passenger out of the vehicle and threw the luggage out of the car. Therefore, we were forced to make available security services to our drivers. It is known what security guards are allowed to do under the law – they can defuse the situation until the police arrive.
Will you start this summer with the Uberboat service on the Adriatic?
We would like to test it this year. The regulations are somewhat different than those for road transport. It is impossible for a partner to be an individual; it has to be a company which must have a commercial permit, a captain… In Croatia, there is a large number of providers of these services because the market is not limited with licenses. We see a great potential for this service because around 16 million tourists come to Croatia, and traffic through ports is about 32 million passengers a year. So, if we take into account the local population, almost every tourist on average passes through Croatian ports twice.