Earlier, Ross Clark made a defence of Uber and argued that it was a net positive for consumers and workers. Here is the case against from James Bloodworth.
Transport for London’s (TFL) decision to rescind Uber’s license to operate as a cab firm in London came as a shock to almost everyone on Friday. It discombobulated those people who wondered why a technology company – Uber has always claimed to be merely an app rather than a taxi firm – had a cab license in the first place. But it also surprised those of us who had come to assume Uber had grown too powerful to be challenged by regulatory authorities.
TFL have sanctioned Uber, which has around 40,000 drivers in London, for its apparent failure to satisfy public safety concerns. The Mayor of London Sadiq Khan (pictured above) has backed the move by TFL, while Uber has already launched an appeal against the decision and launched a petition (which has so far gathered over 500,000 signatures).
The decision has polarised opinion not only because a Labour mayor is in City Hall and some critics see this as a political move engineered by Sadiq Khan (though they seem reluctant to present any hard evidence to support the claim). But also because it seems to go against the prevailing tide: Uber has for the most part been given an easy ride by global regulators. There have been exceptions of course, such as in Italy where the app has been banned outright; but Uber’s model of ‘disruption’ has functioned quite successfully on the basis that the authorities will invariably back down if you stand your ground.
The decision to ban Uber from London will, I imagine, be overturned on appeal. For all the current hysteria on the part of Uber fans, this will result in an improved transport system for everyone. The broader case for or against Uber is a moot point in this respect: unless one believes in a completely unregulated transport system, there must come a point when the existing rules are enforced. I have not heard a persuasive argument as to why Uber should be exempt from rules which others must adhere to.
But even critics of Uber such as myself can admit that the decision to prohibit Uber from operating in London has potentially deleterious consequences. The livelihoods of 40,000 people, many of whom are already struggling financially, are under threat. This is another layer of insecurity heaped onto an already precarious existence. Many Uber drivers have taken out eye-watering finance deals on hybrid cars – deals which they assumed they could pay off by putting hours in on the road. The blasé dismissal of this precarity – ‘they ought to just get another job’ – by some liberal critics of Uber leaves a decidedly bad taste in the mouth.
But widespread reverence for Uber among affluent Londoners misunderstands the extreme model of capitalism on which the company is built. It is a business model that functions by offloading traditional business risk onto its drivers. It does so by promulgating the fiction that its drivers aren’t really its drivers at all, but are instead a mosaic of individual business people. By this move alone Uber avoids paying VAT1; but it also dodges the tab for things like holiday pay and the minimum wage.
Uber’s aim, in the words of its former CEO Travis Kalanick, is to make transportation “as reliable as running water”2. In order to do so, Uber requires a fleet of drivers constantly circling around London at all times. The result is that you, as a rider, can whip out your phone, fire up the app and summon a driver whose car will appear within seconds. This is why Uber puts no cap on the number of drivers it recruits (and foolishly, TFL hasn’t either).
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