London traffic became even more congested recently as 12,000 taxi drivers staged a protest by blockading various streets throughout the English capital.
Their dissatisfaction finds its genesis in the regional expansion of Uber, an app that allows potential passengers to connect with nearby taxi drivers.
The criticism being levelled at the app is because taxi drivers feel that there are a lack of checks and balances in place to ensure that only licensed drivers register on the Uber interface. They claim that the app is contributing to the deregulation of the industry and is thus making it more difficult for law-abiding cabbies to make a living.
An article published in UK publication The Week revealed that Uber was essentially functioning in a grey area, somewhere between cabs fitted out with a meter and minicabs (which have to quote a price up-front).
Although vehicles using Uber aren’t necessarily kitted out with a meter, the app calculates the price of the fare based on the distance travelled in much the same way that a meter does.
The San Francisco-based company recently expanded into New Zealand, and its services are now available in some Auckland suburbs.
Roger Heale, the executive director of the the New Zealand Taxi Federation, says that he doesn’t think that the occurrences in London serve as a precursor of what might happen in New Zealand in the future.
“We are monitoring the situation, but it’s not something we are predicting will happen here, because the New Zealand market is quite different from that in UK,” he says.
However, Heale does express concern that the entrance of Uber into the market might further exacerbate certain issues that are already prevalent in the industry.
“I think there are three issues: firstly, a lack of updated legislation; secondly, private hire is increasingly starting to push the bounds; and lastly, these two factors are making the situation very costly for registered taxi drivers.”
He says that the combined effect of these factors is blurring of the lines between the private hire and taxi industries.
“The biggest difference between the two has been compliance. Taxi drivers have to meet certain rules and regulations in order to operate, while this isn’t the case for private hire. Another difference is that traditionally private hire services had to be booked in advance and couldn’t be hailed down in the street.”
He says that the fact that the legislation delineating these difference hasn’t been updated means that the emergence of technological advances makes it increasingly difficult to enforce the rules.
“If now, you can just tap tap and book a car through an app while standing in a pub, then how is this different from hailing down a cab on the street?”
As a corollary, Heale believes that some drivers might be dissuaded from registering in favour of operating under the more flexible standards of services like Uber—and this could pose some risks to passengers.
“People need to understand the risks involved with companies like these,” he says. “Uber has no background checks on drivers; its vehicles aren’t checked for road worthiness; there are no cameras in their cars; and, if something goes wrong, the operators will just drop the driver.”
The final point Heale makes is that, unlike registered taxi services, private hire companies aren’t legally obligated to operate 24 hours a day—meaning that those who rely on the service might find themselves without transport when they need it.
Despite these criticisms, Uber comms manager Evelyn Tay says that the organisation abides by strict standards.
“In Auckland, we work with fully licensed and accredited taxi drivers to help them earn more money for their families,” she says. “These drivers pass all the tests and checks required to be a taxi driver, as well as holding an extra registration from the NZTA. Our safety and quality measures means we are an extremely safe and reliable service.”
At this stage it’s still too early to speculate on what impact Uber might have on the New Zealand market, but the taxi drivers in the industry have already shown their proclivity to strike when they deem it necessary.
However, as the London cabbies have learnt, this might not be the best course of action to take when it comes to Uber. Somewhat ironically, in what is arguably the best example of inadvertent marketing ever, downloads of the app increased by 850 percent due to press coverage of the strikes.
“Consumers were voting with their fingertips, riding Uber, downloading Uber and standing up for more consumer choice as evident by the 850% download over last Wednesday,” says Tay. “With more options, riders win, drivers win and cities win. That’s what we saw in Europe this week.”
And this isn’t the first time bad publicity has resulted in an increase in consumer interest. In 2013, after it was revealed that products been sold in the UK as beef were actually horse meat, sales of equine-sourced products increased markedly. As it turns out, the scandal showed consumers that horse meat, which sells for less than beef, doesn’t actually taste all that bad.