Wednesday, June 11, 2014

Stop the taxi, I want to get out!

It's Luddism--textile workers smashing powered looms, early in the 1800s--for the 21st century, and not just in England, but throughout Europe;
In Milan, in northern Italy, a protest was taking place throughout Wednesday, although disruption was not expected to be on a similar scale as elsewhere, with boycotts expected of key sites such as railway stations and squares. Cab drivers also staged demonstrations in Rome and Naples.
Protests were taking place in several German cities, including Berlin and Hamburg.
But the worst of the disruption was in Paris, where train services were also badly affected by strike action. 
Does the current British government have the right stuff? Destroying machinery was made a hanging offense with the Destruction of Stocking Frames, etc, Act of 1812. Of course that government had plenty of troops available after defeating Napoleon, to turn against unruly artisans. Which is pretty much what the cabbies are;
This week London black cab drivers are to stage a protest which they say will bring the city to a halt. They accuse the regulator, Transport for London (TfL), of allowing Uber to break its rules by installing meters in cars. That's how they describe the smartphone app which uses GPS to measure the distance travelled and calculate the fare, and you can see their point.
Not that it''s only foreigners;
Hailo...was founded by a group which included three London cab drivers to put the taxi trade in touch with customers via a smartphone app. Hailo has also done pretty well and is expanding overseas. There was even talk of a stock market flotation which would have taken it straight into the FTSE 100.
But with London taxi fares substantially undercut by Uber, Hailo is beginning to feel the heat in its own backyard, and the way it is responding to that threat has angered many cabbies. Hailo has applied for a private hire licence, with the intention of offering minicab services alongside black cabs. "They've looked around the world and seen that's the way things are going - they need to offer something different," a person close to the company tells me.
That's pretty much what Joseph Schumpeter said would happen (Creative Destruction) when people are free to innovate. So is the backlash;
Furious taxi drivers have seen this as a betrayal. There have been demonstrations at Hailo's offices, and the company admits that it has lost quite a few drivers in recent weeks. Many of the cabbies I've met have never been that enthusiastic about the app, seeing it as a necessary evil rather than a real improvement in their trade.
But it's the customers who will decide what is a 'real improvement', if the government leaves the free to choose.
But Hailo itself says in a blog post, "There is no point burying our heads in the sand… A taxi-only app will get isolated and customers will take their money to services without any cabs on offer. It is already happening. Let's win back that work." A clear acknowledgement then that Uber is hurting the business.
Schumpeter himself was pessimistic; Can Capitalism survive? No, I do not think that it can. Rory Cellan-Jones, the author of this BBC piece, thinks otherwise;
The London taxi drivers may not like the way the world is changing, and they may have a point about an imbalance in the way their new rival is regulated. But do they really think they can prosper in competition with a $17bn US company like Uber, while refusing to embrace a home-grown innovation?
There's nothing so powerful as an app whose time has come?

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