ADAM SMITH INSTITUTE
 
Adam Smith wrote in his Wealth of Nations that, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” He goes on to conclude that proposals for new regulations “ought always to be listened to with great precaution”. His words from 1776 remain as true as ever in London today.

Transport for London’s latest regulatory proposals are a sop to the Unions. They will hammer innovative businesses like Uber, reduce competition, raise prices and worsen the quality of transport Londoners receive.

Proposed rule changes include a ban on showing available cars for hire “either visibly or virtually on an app”, and a mandatory wait time of 5 minutes from booking a journey to getting a car, even if a car is available immediately. These two rules alone would undermine the core of Uber’s business model – you won’t be able to see cars on the app and you’ll be left needlessly waiting on the street.

The rule changes would harm many drivers too, particularly those who work part time, with a ban on working for more than one operator at a time. “Controls on ridesharing” would halt plans to introduce UberPool and other upcoming digitally enabled transport services. TfL are also looking at new tests, advertising controls, payment rules and a requirement that companies “seek TfL approval before changing their Operating Model”.

TfL innocently claim the consultation seeks to “raise standards across the industry” following an “exponential” growth in the private hire industry and technology.  Yet according to City-AM the taxi unions are boasting about their influence over the consultation, and Addison Lee is happy they are putting the “genie back in the bottle”.

Regardless, these proposals would protect incumbents at the expense of innovators and flexible jobs. This is hardly consistent with the Government’s ambitions to cut regulations, promote the Tech City, and make services ‘Digital by Default’. Londoners looking for instant, cheap and quality transport are the ultimate victims.

This all reminds me of Bastiat’s satirical parable from 1845 in which the candle makers petition the French government to block out the sun, lest their business be harmed by unfair competition. Fortunately, Uber has established a counter petition, which you can sign here.

http://www.adamsmith.org/blog/planning-transport/transport-for-londons-taxi-conspiracy-against-uber/?
---------------------------------------

 The Institute of Directors has warned that heavy-handed taxi regulation could “damage London’s reputation” for innovation following the announcement of new rules today by Transport for London.

As such the IoD has called on TfL to level the playing field for private hire travel in the capital by making it easier for private hire companies and black cabs to compete with the likes of Uber, rather than introduce arbitrary and protectionist regulations.

Simon Walker, director general at the Institute of Directors, said: “Transport for London is right to take an interest in the way companies like Uber have disrupted the way we travel around the capital. But their proposals for further restrictions to an already heavily-regulated industry are backwards and would damage London’s reputation as a city which celebrates innovation and embraces change.

“Boris Johnson, George Osborne and Sajid Javid have set themselves up as passionate advocates of the free market. How they proceed from here is a crucial test of those ideals.

“It is always easier to lobby for protection than try and compete against disruptive industries. But this is not a case of old companies whinging about the new kids on the block without valid cause. The traditional private hire and black cab industries have legitimate concerns about how to compete while they are shackled by pointless, twentieth-century regulations which do not reflect the way we live, work and travel.

“These new rules would embed economic inefficiency and create artificially high prices for passengers. Imposing a minimum five-minute wait time will just mean passengers stand on the side of the road looking at their car, unable to get in – wasting time, clogging streets and costing money. Outlawing companies from showing available cars on an app is a Luddite solution to a problem which doesn’t exist.”

And Walker called on the government to look at the regulation placed on taxi drivers as a way of leveling the field.

He said; “Stripping back arcane regulation would be a much more effective way of helping private hire and taxi operators. Like Uber, they should be allowed greater flexibility over fares, and encouraged to try out new models like ride-sharing and smart phone displays which passengers want.

“One can only hope TfL are proposing such arbitrary, restrictive and inefficient regulations to demonstrate how counter-productive they would be in practice.”
MeasureMeasure

http://techcitynews.com/2015/09/30/heavy-handed-taxi-regulation-could-damage-londons-reputation/?