London’s Uber Ban is Blow to Fair Competition

Wayne Chen

Arguably the most name-dropped, most revered and most targeted modern tech startup company, Uber has been banned in many places including Austin, Vancouver, Denmark and Taiwan. Yet none of these places was as symbolic of a market to Uber as London, which decided not to renew Uber’s operating license after its expiration on Sept. 30. With the black cabs among the priciest taxis in the world starting at 3.50 pounds for a ride, the ban nearly reinstates a monopoly status for London’s black cabs: the status quo can remain, as there is no clear alternative for Londoners. Moderate restrictions aside, moves intended to wipe out the existence of companies like Uber are not only detrimental to free competition but also undermine the importance of startup culture within big cities.

Many of the initial concerns raised against Uber’s operation were reasonable. In the past, Uber infamously used its complex technological algorithm to deceive authorities from some of its supposedly illegal practices, including circumventing their vehicles from authorities trying to hunt them down. However, rather than illegal, many so-called violations were nothing beyond lacking an operational permit, which could have ultimately been due to its conflict of interest with the existing drivers workforce — the taxi drivers.

With a powerful union protecting their interest and numerous guidelines preventing London’s 22,000 black cab drivers against any price slip, thereby ensuring that other than riding the Tube or the often unreliable buses, the only way to go about the city can easily cost more than 10 pounds, a hefty amount of money for Londoners.

Uber’s existence bypassed many bureaucratic challenges that made black cabs absurdly expensive and provided a new business model that is both affordable and popular. It should have been perceived as a healthy competition for taxis, challenging all sides to sustain lower prices for the passengers. Instead, it was perceived as a taxi-killer and a safety hazard, and somehow legislated out of its right to operate. Yet the excuse barely holds, as more serious offenses take place on a daily basis within London’s mass transit system. London Mayor Sadiq Khan’s obsession with the relatively small number of offenses compared to other transit services is not a demonstration of prioritizing safety, but rather protecting the interest of a politically powerful group of cab drivers.

By no means is Uber an entirely ethical and good-natured company. However, as a city that aspires to attract small businesses and establish its reputation as a city for all, ban on Uber is an unnecessary and incredibly bureaucratic move. As London’s arguably biggest competitor on the world stage, New York City should not replicate the same mistake and outright ban Uber, reasonably regulate it and subject it to similar rules as other competitors in the field.

Opinions expressed on the editorial pages are not necessarily those of WSN, and our publication of opinions is not an endorsement of them. Email Wayne Chen at [email protected].

 

A version of this appeared in the Tuesday, Oct. 10 print edition.

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1 COMMENT

  1. With apps like Gett, MyTaxi, Kabbee, and Addison Lee all offering alternatives to traditional taxis and competitive prices (especially after news of Uber’s license denial), I fail to see how the move is anti-competitive.

    The fact that a company utilized intricate technology to avert authorities and continue illegal operations hints at a cultural disrespect for established norms and codes of law. Hopefully, the arrival of a new CEO and a reshuffling of the BoD will catalyze a culture change. Nevertheless, the TFL has no obligation to grant a license to a company with a precedent for challenging the decisions of governments.

    Let’s be clear: the TFL did not give Uber a license, they did not decide to ban all ride-sharing services. Capitalism dictates that an Uber replacement, if talks between TFL and Uber are fruitless, is not too far away.

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