Iceland Proposes Sweeping Reforms for Taxi Market to Boost Safety and Transparency

Minister Unveils Plan for Taxi Industry Overhaul

Eyjólfur Ármannsson, Iceland's Minister of Infrastructure, has announced a comprehensive draft proposal designed to reform the country's taxi industry. The proposed regulations, which were made public on January 30, 2026, are now available for public consultation and aim to improve safety, transparency, and professionalism within the sector.

The initiative comes in response to what the Minister has described as 'ongoing chaos' and a 'Wild West' environment within the taxi market. A recent poll conducted by Maskína indicated that over 80% of Icelanders are dissatisfied with the current taxi system, citing concerns over availability, pricing, and service quality.

Addressing Previous Legislative Gaps and Market Issues

The need for reform stems partly from legislative changes enacted in 2023, which saw the abolition of mandatory parking and number restrictions. According to the Minister, this created a gap in the legal framework for oversight, leading to 'serious consequences' including disputes between passengers and drivers, incidents of violence, and even criminal convictions. Police have also intensified checks at Keflavík Airport due to reports of overcharging and service refusals.

Key Pillars of the Proposed Regulations

The draft proposal outlines several key measures intended to professionalize the taxi service and enhance public safety:

• Taxis will be required to display distinct license plates, differentiating them from regular vehicles.
• The Icelandic Transport Authority will enforce stricter supervision of the taxi sector.
• Taxi stands must establish and publish their own rules of conduct.
• All taxi drivers licensed after the 2023 legislative changes will be required to pass a new exam to renew their licenses.
• Future taxi exams will be conducted without external assistance.
• Clearer price lists must be displayed within vehicles.
• The proposal also includes the potential reinstatement of mandatory stopovers, though this specific bill is still pending.

Furthermore, a draft amendment published in February 2025 proposed a universal obligation for taxi drivers to affiliate with dispatch centrals. These centrals would be responsible for storing and processing specific data, managing consumer complaints, and offering guidance on legal remedies, with their IT systems subject to annual verification.

International Scrutiny and Future Outlook

The Icelandic taxi market has been under scrutiny from the EFTA Surveillance Authority (ESA) since 2017, which has raised concerns about restrictions on the freedom of establishment, particularly regarding the requirement for taxi operators to be connected to a dispatch central. While a new legal act in April 2023 addressed some of ESA's concerns by removing limitations on license numbers and the requirement for taxi driving as a primary profession, the dispatch central affiliation has remained a point of contention.

Minister Ármannsson expressed confidence that these proposed changes will foster a professional and transparent taxi market, ultimately providing passengers with a safer and more reliable service.