Uber Loses London Licence – the Regulator Strikes Back

So, is the decision by Transport for London to take away Uber’s licence the end for the gig economy?

Does it mean all those other firms that have disrupted traditional industries; Deliveroo, Air B’n'B, many firms in the recruitment and interim labour market that our colleague Andrew Karpie writes about, are all doomed as the battalions of regulators and traditional interests fight back?

No, we suspect not.

The benefits that these firms offer to the consumer are too significant to be forgotten or disregarded. And there have been knock-on benefits too – my local taxi firm now sends me a text with the driver's details before he arrives – inspired no doubt by Uber’s  good practice. And we should remember that some of the people who work for these enterprises, probably quite a high proportion, love the flexibility that these new models of “employment” offer.

But TfL has pointed out some of Uber’s failings – a complacency perhaps around their processes for approving drivers and managing events when something goes wrong. And there are other signs that governments and regulators are taking a tougher line with these disruptive firms. Google faces a huge fine from the EU for abuse of their monopoly position. Amazon is coming under fire for not doing more about merchants on their site avoiding UK Value Added Tax (VAT), and indeed tax is going to become a bigger issue we suspect as these digital giants are perceived not to be paying their “fair share” in many of the countries in which they operate.

All of this though does not mean we are going  to go back to the old days of black cabs, physical book shops and the Yellow Pages. Rather, it is a sign that we are entering the next stage of maturity of the digitised world. The issue of how monopolies can be created in this new world will have to be faced, for a start, just as governments a hundred years ago or more faced similar issues in the oil industry and elsewhere.

In terms of employment models, we will see a lot more activity as governments try to come to terms with these new “gig economy “ ideas, maintain their tax base, introduce workable regulations, and also give workers some protection – without killing off what is going to be a major source of employment (and wealth) for many years to come, until the robots take over anyway.

We suspect that Uber will appeal, perhaps lose that appeal, but get their licence back within a year or so. But if that allows some competition to strengthen their position, that may be a good thing in the long term. We have sympathy with the drivers; less so with the entitled customers whingeing about TfL’s move, or some of the lobbyists saying this is a sign that London is not a real “digital city”. Nonsense. It just means that TfL has a responsibility to citizens when licencing taxi firms, and it is not happy that Uber has met the conditions for the safety and security of passengers.

Digital is wonderful, but we can’t allow a wild west where every innovation is given a free ride (as it were) just because the hipsters like it!

Voices (2)

  1. Mr Pete:

    Should it not be “loses” rather than “looses”….? (Editor’s note – now corrected – thanks!)

  2. The Lady Doth Protest:

    And also in today’s news – Addison Lee. Nope, not self-employed – they’re classed as “workers.”

    Yea, though the National Insurance and Tax collectors rejoice, those who would’ve classed each driver as an SME weep a death of a thousand cuts…

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