On Friday, September 22nd, TfL announced that they will not issue a private hire operator licence to Uber after the expiry of their current licence at the end of the month. This prompted quite a bit of discussion at my work. Eventually, someone asked what I thought was a good question: why all the negative comments about Uber?
For me there are two reasons for my generally negative views.
- Regulation has value and controls behaviour.
- Capital flows are market and moral questions.
In my view, workers’ rights and conditions and passenger safety are suitable areas for regulation. If you’re going to have regulation, you must have a regulator who can act. Acting requires cooperation. TfL’s statement is mostly a complaint about a lack of cooperation. Uber has a responsibility to investigate assaults, including reporting allegations in the first place. TfL maintains they have not done so. Uber denies passengers service, using software called Greyball. It appears they use this to target and deny passengers they suspect are regulators. This is further evidence of a lack of cooperation.
Depending on your view of the most effective means to protect our shared commons, the actual statistics (to some degree) matter less than the cooperation, or lack thereof. I expect that the assault rate for Uber drivers would be somewhere around the general level for licensed minicab drivers, for example.
Uber has operated in London for five years. Those five years have changed the market. At some point in those five years Uber went from a scrappy little startup attempting to disrupt incumbents to a highly influential company; one now valued around $70 billion. But strong regulatory oversight does make it harder for innovation. An effective approach would have been to allow regulatory oversight to ramp up in concert with the impact of the company. Doing this is hard, the alternative, however, is letting companies arbitrage regulations and regulators.
Politics is tough; governments change. Governments change so that we have some ability to change things we don’t like. Regulation should always kick-in.
The second reason is that — again, in my view — capital flows are moral questions. That is, in-market measurement of success is not enough. Customer utility is not the be all and end all. Every action, internally within a company, and externally in the market can be judged according to a moral system. Against my moral system, Uber deserves criticism. I remain a critic of them even though they are successful, offer good service and are cheaper than the alternatives. In this case, my moral objections are pretty similar to the regulator’s objections. But even if they weren’t, I believe a moral view of a company’s behaviour is a legitimate frame for criticism.
In short, this incident is to be celebrated, on one hand, as regulatory interventions re-asserting themselves. While on the other hand, Uber remains a company to be criticised for poor behaviour according to some moral systems. But both of these views are simply my views. I would hope that Uber is able to react to this feedback in a way that makes them a better company, if they can’t then I won’t shed a tear about losing them from London. Certainly, Dara Khosrowshahi — the new CEO — appears to be using this as a teachable moment.
The problem now is that millions of people are facing a loss of access to transport (due to many minicab companies closing down in the face of Uber) and 40,000 drivers are facing the loss of their jobs. TfL’s five years of laissez-faire attitude bears some responsibility. But even if it didn’t, TfL has a responsibility to act once more in aid of the passengers and drivers of London.
Lyft in the US should view this opportunity as a gift. A large city has been trained to order cars using their phones, and soon will have no cars to call. 40,000 drivers will soon be looking for passengers. Lyft could enter London, promise cooperation and better behaviour, charge a higher price and ride to the rescue of all. Lyft would be quite right to be cautious: how beholden to the LTDA is TfL?
I would hope that someone from TfL is trying to get in touch with Lyft. And I hope that Lyft is answering that call.