So yesterday, a lot of London cabbies protested against Uber, which drove up awareness of Uber, which led to lots of chortling about how those stupid taxi drivers just gave free advertising to the competition and they should just get with the times and accept that the industry is being DISRUPTED! and this is the future…
Hold. UP.
London cabs come in two forms: the traditional black cab that everyone knows (and which for my money is the best taxi on earth) and the minicab. Minicabs are called for in advance and deliver you to a certain spot for a set fee, while black cabs have meters and pick up on the curb (you can just hail them at random). Only black cabs are allowed to run meters, and part of qualifying to drive a black cab is the Knowledge. The Knowledge is basically an internal GPS for every street in London, in your head, from memory. It takes years to perfect, it’s documented to cause actual physical differences in the brain, and it’s part and parcel of having the fastest and most direct route to your London destination.
Comes now Uber, where the smartphone app is used to hail a cab – but the service isn’t a fixed cost. It’s metered over distance, like a taxi, but because it’s using a smartphone app and not an actual taximeter, Uber claims that they aren’t competing with regular black cabs and shouldn’t be regulated as such. And naturally, there’s no Knowledge to pass; your driver is presumably navigating by Google Maps or some such.
The cabbies of London are pissed, and rightly so, as are taxi companies around the world, and rightly so. More and more, it’s becoming apparent that Uber’s entire business model revolves around evading the legal regulation normally associated with taxi service, whether it’s the medallion system in New York or the Knowledge in London or liability insurance requirements in California or vehicle inspections in Virginia. The argument appears to be “we are neither fish nor fowl and no rules should apply to us, and oh by the way, these drivers are all independent contractors so it’s all on them when the car explodes or plows through a crowd of pedestrians, not us at all.”
Two things:
1) This is the classic “independent contractor” dodge, the ongoing drive to eliminate actual staff and the costs associated with them. What used to be a question of driving a pickup truck to Home Depot to pick up day laborers is now all over the economy, whether it’s just temps from Manpower or adjunct instructors instead of faculty or some random with a pink mustache stuck to the front of their ride. Over a decade ago, I forecast a world where nobody would have staff below the managerial or lead level; all the grunts would be contractors and the company would be happy to duck things like health care or retirement or benefits at all. Nobody much cared until it started hitting the white-collar world, but here it comes.
2) It’s all fun and games undercutting taxis with your huge stack of venture funds, but as soon as the company has to turn a profit, how much are people going to make? How long is it sustainable? Can someone in San Francisco – the only place where Uber’s ever been remotely usable for me – actually make a living and afford a home doing nothing but driving for Uber? (Setting aside San Francisco’s housing issues being distorted by the tech bubble in the first place.) And what’s to stop them being undercut by Lyft, or Sidecar, or by taxis using Hailo or Flywheel? When all cabs are summoned and paid for by app, where’s the value-add for Uber?
But the really dickish bit is that Uber keeps handwaving these issues away – in Virginia, they blew off a $35,000 fine and then an injunction and continue to operate anyway. It’s the apotheosis of Silicon Valley in 2014: things like existing regulations and the rule of law are an inconvenience, to be ignored when you feel like it, and “disruption” is the highest of all values irrespective of the real-world implications.
Uber wants to be the Wolf of Market Street. Fine. Buy the ticket, take the ride. I’ll take something else.