| Joel Bowman, checking in this weekend from Művész Café in Budapest, Hungary...
Europe is leading the way... backward!
From the straßen of Berlin to the calles of Barcelona...
Trafalgar Square to the Arc de Triomphe...
Madrid to Milan... and beyond...
Jilted taxi drivers across the European continent cut their engines this week to protest what they see as unfair competition to their coddled little guilds. Apparently, given the choice, customers prefer to use smartphone-based services such as Uber to get them from A to B.
Overpriced and unreliable, licensed taxis are being left at the cabstands. Please read on...
The Uber Revolution Storms Europe
Uber works beautifully... which is why Europe's taxi drivers decided to stop working entirely. In a series of carefully coordinated tantrums, European taxi drivers yanked their collective handbrake and turned off their collective meter on Tuesday, all in protest against Uber... and a similar app called Lyft.
The mobile applications work by pairing drivers up with passengers who download the app. The apps themselves (which anyone can download for free here, for Uber, and here, for Lyft - currently only in the U.S.) allow passengers to view their potential driver's position (via GPS) and to compare drivers' ratings, as determined by the app's community of users, before choosing the right one for them.
Think of the ratings system like a Trip Advisor or Yelp... but for transportation. It works to keep both drivers and passengers honest and well-behaved. For anyone who's already used the app-based services, you've no doubt noticed the difference.
These apps have become an enormous success... which is why Europe's cabbies are rising up in protest. "No more!" they boldly declared this week, wedging their idle vehicles up and down strategic chokepoints around the continent's already congested metropolises.
"If we can't have the roads to ourselves," they seemed to say, "then nobody shall have them."
In London alone, as many as 12,000 cabbies brought the city to a near standstill, blockading key arteries from Whitehall to Parliament Square and beyond. Estimates put the cost at around £125 million in lost revenue.
A "right bloody disaster," in other words.
Across the Channel, and with characteristically cynical humor, Parisian drivers slowed to a snail's pace along their own capital's main routes, conducting what they termed an impromptu "escargot."
Pretty funny... except if you needed to catch a plane... say, from Paris to Budapest (as this editor did). The congestion in and around the city was exacerbated by a simultaneous trade union strike at the nation's train stations. If it weren't for an enterprising young "débrouillard," with whom we were more than happy to conduct some off-the-books, "System D" business, we might not have made our flight at all.
Three cheers for the strikebreakers, the blacklegs and the scabs!
As anyone who's lately tried to score a taxi ride in Paris (impossible)... or been startled by the outrageous fare of a black cab in London (a small fortune)... knows, smartphone app-based alternatives like Uber and Lyft offer massively superior service to that available in the traditional, stagnant marketplace.
After all, if these disruptive upstarts didn't offer better services, nobody would use them... and the protesting taxi drivers would have nothing to complain about. It's only by virtue of the fact that these alternatives are so popular that this competitive threat has become an issue at all.
It's the Government, Stupid!
To be fair to the cabbies, the underlying problem here is really the government's meddling in the transport sector. It is the scourge that rendered the taxicab business so very brittle and inefficient in the first place. By presenting barriers to entry in the form of prohibitively expensive licenses and stifling regulation, state intrusion in the market virtually guaranteed that it would one day be ripe for disruption.
Across Europe, governments charge drivers up to 200,000 euros ($270,000) per taxi license, thus making it a very lucrative business... for the government. Punishments for operating a taxi without government badges, medallions and other assorted permission trinkets (depending on the jurisdiction) are equally severe, making it a perfect protection racket for the state.
And then, even if you have the cash, licenses are not easy to obtain.
In London, perhaps the most notorious of all European cities when it comes to making the grade, drivers must complete a grueling and ridiculous course known as "the Knowledge" before being granted a license. The archaic test is reportedly little changed since it was introduced... back in 1865! On average, a wannabe cab driver will take 34 months and 12 "appearances" (attempts at the final test) before acquiring permission to pick up a fellow human being and give him a lift down the street.
Of course, the whole process is monitored by the Public Carriage Office, a strong-arm government agency which takes its cut at each and every stage of the game: training, studying, testing, etc. If a private firm were to engage in such behavior, it would be charged with racketeering, and that firm would be known simply as "The Mob."
It is true that such extensive training typically ensures taxi drivers know their way around... and to an impressive degree, it must be said. But it's a bit like being able to recite pi to 10,000 places. The moment someone in the room produces a calculator (or a smartphone), your snowflake-unique talent suddenly melts in your hand.
Cabbies would presumably argue that "the Knowledge" is by far and away superior to any GPS known to mankind. And they should be free to argue their case... just as passengers should be free to make their own choices: A cab fare from a state-licensed driver with the corresponding 200,000 euro (plus taxes) built into the price... or a quick and easy ride you can order from your phone without all the hassle and bureaucracy.
Getting Around
Apps like Uber and Lyft seek to work around the state's artificial barriers by conducting payments through the apps themselves, rather than through meters in the actual vehicles. In other words, no money changes hands between the passenger and the driver during the ride. As (most) current laws stand, this workaround exempts drivers from having to obtain those costly licenses/medallions/permission badges to enter the marketplace. These savings can then be passed on to passengers.
For the same reason, drivers need not carry cash (their float) on hand, thereby reducing the risk of being targeted by thieves, a notorious problem for the cab-driving community. Ditto for passengers.
Great solution! Everyone wins, right?
Not quite.
Rather than turning against the government for having impeded the market's natural progress and development in their now-anachronistic service sector, the taxicab unions are actually turning toward the government to help them swat away the competition!
Found in Translation
Here's what a few confused individuals had to say. (Note: European slang can be difficult to understand so, with that in mind, we've taken the liberty of providing some rough translation notes below each remark.)
First up...
"Uber isn't properly regulated," complained one London cabbie. "It's a slippery slope. Quality of life will go down if these services are allowed to operate."
Translation: People shouldn't be trusted to make decisions for themselves, nor be allowed to contract with whomever they so wish. They must be forced - under threat of law - to choose the only game in town: us.
And here, another...
"We have to have a license to own a cab, we have to have a driver's license, a cab driver's license," griped another driver, also in London. "For some reason they [Uber] seem to be outside the law."
Translation: The government extorts money from us by forcing us to buy their permission cards. The obvious "fair" solution, therefore, is not to fight against those perpetrating the extortion... but for that same government to extort money out of everyone, equally.
And then this...
"Uber cabs are stealing our clients," hollered another driver, this time in Paris. "We are regulated to death, while they circumvent the law."
Translation: Regulations are killing our industry... the obvious fix then is for everyone else to be regulated too!
Driving Traffic... in the Wrong Direction
As it turns out, clogging up arterial roadways and causing hours-long traffic delays is not the best way to curry favor with your transport-reliant customer base. Presumably, there's a reason some people drive cabs rather than, say, work on strategy teams for public relations campaigns.
Prior to the latest wave of protests, most people over on the European continent had no idea what (San Francisco-based) Uber even was...
"Hasn't it something to do with Nietzsche's proposed solution to the creeping problem of nihilism, dear?"
"No, no, no... you're thinking of Übermensch, darling."
Striking taxi drivers might not yet be on Uber's payroll... but it seems as though their grand, headline-grabbing stunts have already spurred a wave of interest - and business - for the rapidly expanding startup.
The company reported an enormous spike in downloads of its mobile application on Wednesday, the day after the strikes.
The app's UK and Ireland general manager, Jo Bertram, told newspapers that Uber had enjoyed its biggest day of sign-ups since it launched in London two years ago - an 850% increase in downloads compared to the previous week.
Think the Law of Unintended Consequences... or something like that.
There Go the Luddites
Like the stagecoach drivers they replaced, the modern-day cabbie is similarly under threat of disintermediation. His profession looks set to go the way of the horse and buggy driver, in other words, confined to quaint little rides around city parks at romantic, sunset hours...
As for the consuming public, the battle lines are clearly divided...
On the one side: a slew of innovative companies that are lining up to offer consumers better quality service at more competitive prices.
On the other: a swarm of disgruntled Luddites who would rather choke off their respective cities' traffic altogether than join the inevitable march of progress.
Our advice to cabbies is the same as it is for passengers:
Ditch the state... embrace the market... Download Uber.
Cheers,
Joel Bowman
for Free Market Café |
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