The Scotsman (quite a good read)

For many outside London, Glasgow or Edinburgh the Uber taxis debate will seem irrelevant. After all, in most other areas there are just the local taxi companies, and the issue is accessing them.

Choice is limited and cost the set tariff. Even the licensed cab or private hire divide is of no consequence, where hailing a cab isn’t an option and where every pick-up has to be booked.

However, there are plans by Uber to expand into Aberdeen and other areas may thereafter follow. So the decision by Transport for London to refuse to renew their licence is of interest nationwide. It’s also being appealed and could well be 
overturned with changes or assurances given. So, the roll-out could continue.

The model came from America but hasn’t been without its issues there. Uber has threatened to withdraw from Montreal and Quebec after the Provincial Government indicated it was increasing the training hours required before becoming a cabbie and having the police conduct security vetting.

It has caused a deep divide in London between those who support and oppose Uber. Some complain about being deprived of the opportunity for cheaper fares. On the other side there’s the evident delight of many cabbies who feel threatened by competition.

In many ways, though, it’s not just a London or taxi issue but a microcosm of changes ongoing in our society. The Uber format is part of a wider debate on the direction of our economy. It could be called the Uberisation effect, or after any number of other new economy operators who have moved into spheres of life and transformed them through their apps or their format.

Many products and services have been made more widely available in some ways and often at a cheaper price. However, it’s also affected regulation of trades or markets. It’s undermined trades unions, closed down local shops or traders and atomised a workforce whether employed on a large site or operating individually in their cars or vans.

The effect on them hasn’t been so pleasant and far from benign. It’s not just left-wing trade unions but trade and small business federations who are now fearful for their future. It’s part of a change in society from being citizens in a community where services are local and regulated, even if slightly more expensive, to becoming individual consumers where all that matters is the bottom price.

Of course, much change is both inevitable and beneficial. There can be no 21st century Luddism and, mixing my metaphors, the genie is out of the bottle. These apps and formats are here and can’t be uninvented. But that doesn’t mean that they still shouldn’t be regulated and that the lowest price must always be best.

Uber will argue whether in London, Montreal or anywhere that they are regulated, but in many ways, they’ve driven a coach and horses through the rules. Regulation of taxis is complex, as I recall from being Justice Secretary, and requires trying to protect the rights of the trade, consumers and wider society. In many ways the trade is the master of some of its own misfortune.

Initially there were just taxi licenses and drivers were vetted and in many areas required to undergo examinations such as “the knowledge” as it’s termed in London, to ensure they knew the city and its sights. Plates were also issued for vehicles and were limited to protect from over-provision, though regular sampling was undertaken to ensure a sufficiency for public need.

However, for whatever reason private hire was invoked running a parallel service with fewer requirements for drivers and lower supervision of vehicles. That was initially meant to be limited and for hotel and airport transfers, but subsequently has become a duplicate trade simply by phone bookings and available apps.

Technology has blurred the lines between the two, as anyone seeking a cab at an airport will know, where the difference is hard to spot. Private hire and mini cabs boomed not just in London but in some Scottish cities, undermining the licensed black cab trade and also being targeted by organised crime looking to launder cash.

To be fair, the private hire trade has largely been cleaned up but regulation of both cabs and vehicles is still less rigid for private hire than for the black cab trade, yet they compete for the same custom and drive on the same roads. Then came Uber, who could be described as private hire on speed.

Some will say ‘so what, I simply want a cab and the cheapest’. But there are dangers from an unregulated market and not just the issues in security and quality highlighted in London and Montreal. Even in Scotland the major issues tend to have predominated within the private hire rather than black cab trade.

An entirely free market can be counterproductive. Many years ago Dublin decided to deregulate. It resulted in many seeking to make an extra euro or two on a Friday or Saturday night doing taxi work. There were more cabs perhaps, and maybe even an effect on fares. But it undermined the professional trade as they were driven off the road through being unable to make a living. The service became worse as there were then fewer cabs at non-peak times such as a rainy Tuesday morning when the weekend extra shifters were doing their other jobs.

Regulation isn’t simply about protecting society from nefarious individuals. The limitation on numbers is about adequate public provision, not trade protectionism. Of course, not just apps but sat nav has changed some aspects. But having properly accredited drivers with appropriate skills and in vehicles independently scrutinised is a good thing.

Uber sees itself as opening up the market for the benefit of individuals, whether new drivers or customers seeking cheaper fares. But it undermines a regulated trade that’s served us well.

As my mother was fond of saying: “You can know the price of everything and the value of nothing.”

http://bit.ly/2xCMsks

Kenny MacAskill (former)
Cabinet Secretary for Justice.