2 thoughts on “The next Mayor must save London from Uber-regulation”

  1. Posted 01/10/2015 at 15:14 | Permalink

    Good piece, but not so sure about the juxtaposition of the US and Europe in terms of embracing innovation. After all, the taxi cartels in US cities are every bit as entrenched and the regulators every bit as captured as those in the likes of Paris. By the same token, Uber has had considerable difficulties as regards being accommodated by regulators in the US, although there are so many different jurisdictions there and so many different approaches to them by Uber that it’s not easy generalising. But plenty of evidence online that Uber’s not been easily embraced by the US system. Of course, that’s not to doubt the point about Silicon Valley-esque innovation, but actually accommodating it in the US is a different matter.

    Interesting point too about how TfL’s proposals would entrench Uber and create a vested interest, but at a rough guess I’d say its long-term market dominance and power in terms of branding etc might be a bigger issue for laissez-faire purists.

  2. Posted 02/10/2015 at 10:34 | Permalink

    Thank you, Stuart. You make a good point about cartels and regulatory capture in the U.S. However, I think the kind of anti-innovation protectionism we’ve seen in continental Europe would be unthinkable in the States. Yes, taxi cartels remain even after the advent of Uber, but there has been no suggestion to ban or severely impair ride-sharing apps. There are ongoing court cases about specific concerns raised by Uber’s business model (insurance liability, employment status, tax), but as far as I know only a few jurisdictions have attempted to prevent Uber from entering local transport markets, and the trend (for instance, see Nevada) is decidedly towards opening up transport markets rather than clamping down on new entrants.

    I disagree with you about Uber’s market power and dominance. It is one of those cases, common in the innovative industries, where a large market share conceals a high level of contestability and incumbent vulnerability (as with Google). Especially if you consider the fact that users typically carry several different transport apps on their phones (Hailo, Kabbee, GetTaxi etc) and that you can ask for fare estimates on each of them, I think Uber would have a hard time “locking in” customers, unless it genuinely offered value-for-money. What’s more, as historical data on previous price trends from each app become available, it’s easy to imagine a “fare amalgamator” emerging which could tell you, with a high level of accuracy and in real time, which service among all the different ones is most competitive for your particular route, timing, number of passengers, and so on.

    On the other hand, regulatory moves in Europe have scared off other U.S. players (notably Lyft) who were considering entering the European market, so there we are seeing the very initial signs of regulatory entrenchment of incumbents!

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