World

Uber vs Taxis, unfair competition?

2 reading minutes

written by Vincent Pickert · July 15, 2016 · 0 comment

File illustration picture showing the logo of car-sharing service app Uber on a smartphone next to the picture of an official German cab sign in Frankfurt, September 15, 2014. A Frankfurt court earlier this month instituted a temporary injunction against Uber from offering car-sharing services across Germany. San Francisco-based Uber, which allows users to summon taxi-like services on their smartphones, offers two main services, Uber, its classic low-cost, limousine pick-up service, and Uberpop, a newer ride-sharing service, which connects private drivers to passengers - an established practice in Germany that nonetheless operates in a legal grey area of rules governing commercial transportation. REUTERS/Kai Pfaffenbach/Files (GERMANY - Tags: BUSINESS EMPLOYMENT CRIME LAW TRANSPORT)

Le Regard Libre N° 18 - Vincent F. Pickert (our guest of the month)

With Uber being banned in several regions—such as Spain, Nevada, and India—along with anti-Uber protests in Paris and debates at the Toronto City Council, tensions are rising around the California-based giant. Indeed, this alternative to traditional taxis is causing concern: anyone can, at low cost and with just a few clicks, use or provide taxi services. For Uber Pop—the service that has sparked the most controversy—no license, training, or certification is required; simply signing up on the app is enough.

Unfortunately, this disruptive technology suffers from its very innovative nature. Taxi unions, politicians, and citizens accuse Uber, respectively, of unfair competition, failure to comply with the law, and the destruction of traditions—in London, for example, with the famous «cabs.» In the name of conservatism and fairness, this «sharing economy» service is being banned in more and more parts of the world.

These «regularization» policies not only violate the principle of economic freedom—they are simply useless. While the service set out to compete with a long-standing taxi monopoly—one that had become inefficient and unwilling to improve its service—the multinational now faces inflexible unions that would rather resort to bans than revise their business model. These bans are endorsed by politicians who yield to pressure from these unions and who falsely claim to be acting in accordance with public will.

What solutions are there, aside from the one proposed by Salima Moyard, a Socialist member of the Geneva Grand Council, who advocates introducing a tax to finance a common subsidy fund for taxis serving underserved areas (a solution worthy of a planned economy)? Deregulation. Or rather, the complete abolition of any and all rules, privileges, or permits. By allowing Uber to operate wherever it wishes, by eliminating taxi privileges (such as the use of bus lanes), or by doing away with the costly licenses that taxis are required to obtain in order to operate, we will create genuine competition in a free market, with a service focused on the consumer (and thus the public) rather than on protecting personal interests.