WEB & TECH / MAY. 26, 2014
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Are Taxi Apps Really Costing Jobs?

All over the world Apps such as Uber and Hailo which allow you to order and track a private driver from your smartphone are being painted as the devil by traditional taxi drivers. Taxi drivers are out for blood because they are adamant that unless these Apps are banned hundreds of thousands of jobs will be lost. This would obviously be extremely damaging for all involved. But will these kinds of Apps really cost hundreds of thousands of jobs? Or are traditional taxi drivers just scared of a bit of competition in a market which they have always had a monopoly over? Perhaps the second is really the more plausible answer.

First of all it is important to understand how Apps like Uber and Hailo operate. Uber, the largest and most controversial of these companies describe itself as a “pick-up” service. It allows users to see the name and photo of a background- checked private driver. Taking 20% of the fare, users are also able to track their driver arriving in real time.  Uber also has the option to let approved friends or parents follow the route on their smartphone.  It also provides an email of the route to ensure that the driver did not take them on the scenic route for a higher fare. Uber sees these options as providing good value for money and safety for their users.

In many respects Hailo is a copy of Uber, it operates slightly differently though, as it was originally designed to work in traditional taxis. The idea being that it would just provide some features that are similar to Uber, such as real time ordering and tracking. Hailo’s chairman Ron Zeghibe, saying that it was "a working tool for drivers, with a whole series of aspects which made their working day more useful and effective". However, recently Hailo has applied for a private license so it is essentially becoming the same as Uber. This has not gone down well with traditional Taxi drivers.

Traditional taxi drivers around the world are getting more and more agitated about these kinds of Apps. In fact, in many cities around the world such as London and Paris they are striking in order to force the government into banning them.  In Spain, the National Taxi Federation is calling for Uber to be banned saying that it could cost 100,000 jobs. In Berlin, there was a slight victory with the government gaining an injunction against GPS enabled Apps in Taxis. However, it really has come to nothing as the city chose not to enforce the injunction fearing the legal costs if the injunction was overturned on appeal. 

In London, not only has the London Taxi Drivers Association (LTDA) threatened strikes which would bring the whole of London to a standstill, but they have also become violent. Recently Traditional Taxi drivers angered at Hailo’s application for a private license attacked the London offices of the company. Several people were hurt and the police were called. Violence also erupted in Paris in January when drivers protesting against Uber started attacking Uber cars. This kind of action by the Unions is unlikely to win over the hearts and minds of the consumers.

It seemed quite strange when the London Taxi Drivers Association general secretary, Stever McNamara described Uber as “dangerous for Londoners”. This is interesting as the violent people threatening strike action are his members.

The LTDA also described U.S. based Uber which is backed by companies such as Google and Goldman Sachs as “an American monster that has no qualms about breaching any and all laws in the pursuit of profit, most of which will never see a penny of tax paid in the UK.” 

Uber retorted by saying that competition was “always good for the customers because it makes all of us up our game in terms of quality and service.” While it is certainly true that tax will mostly be paid in the U.S. surely what is best for the customer is a bit of competition. After all this is not the NHS or some other government institution. Taxis are private and they are making money for themselves. The only difference is that they have always had a monopoly. If you take that monopoly away are you really going to force all of those people onto the street? Or are you just going to make them up their game a bit?  The latter is probably more likely. Uber has been operating for several years now and the Taxi drivers are not starving in the streets.

So what do you think? Do you think it is really about protecting people’s job and safety? Or is it really just about protecting a monopoly? 

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