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fighting the future
London Leans on Uber

It’s old-fashioned cronyism made new: The Mayor of London is throwing the weight of his government behind taxicab unions’ efforts to stop the growth of Uber and other private ride-hailing services, which offer the same service as taxis at a lower cost. The Financial Times reports:

Sadiq Khan will announce measures on Tuesday to protect London’s black cabs, as new figures show how they are being edged out of the market by private taxis such as those working with Uber. […]

In an effort to bolster the black cab industry, the mayor of London plans to give them access to 20 bus lanes and to quadruple the number of officials enforcing private hire car regulations. TfL will spend £65m on helping black cabs switch from diesel cars to more eco-friendly models.

Meanwhile, private hire drivers will have to pass a stricter driving test, an English-language test and always have commercial insurance that covers passengers in an accident, even if the driver works part-time. The police will record offences, collisions or sexual offences by drivers more consistently, Mr Khan will promise.

To be fair, Uber’s disruption of the London taxicab industry has been particularly ruthless. London cabbies have long been notorious for their mastery of the City’s labyrinthian web of streets, tunnels and parkways—a skill known as The Knowledge. All black cab drivers have passed a test requiring upwards of three years of study.

Taxi fares traditionally reflected the skill of a well-educated fleet of drivers. And taxi policy was seen as a success of the high-cost, high-regulation blue model approach to markets—despite the high fares, London cabbies were famously competent and reliable.

Needless to say, GPS technology has rapidly diminished the competitive advantage of drivers with an encyclopedic knowledge of the British capital, and the market is re-adjusting accordingly. And while the city should provide training and support for displaced cab drivers, it cannot fight the future forever. When Uber rolls out self-driving cars, it will be impossible for a large taxi industry to remain competitive, no matter how much it is subsidized.

Throughout history, new technologies have threatened well-organized constituencies, and those constituencies have used political power to fight to suppress them. This impulse is certainly understandable. But governments have a responsibility to respond to the broader public interest, which is best served by the economic growth and social surplus created by ride-sharing. On both sides of the Atlantic, the war on Uber is one policymakers are destined to lose.

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  • Fat_Man

    I have used cabs in London. And I have experienced the drivers getting lost and taking me to the wrong destination. I think the Knowledge is a fairy tale for rubes from the sticks.

    • f1b0nacc1

      You will find very, very few Londonites who believe that “The Knowledge” is anything more than clever marketing…what it really is is a very obvious barrier to entry to keep prices high…

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