It is unusual for small entrepreneurs to riot with intent. Marxist theory classifies the small businessman, the petit bourgeois, as a conservative conventional creature. And yet France has seen many members of this class out on the road recently, blocking traffic and burning vehicles belonging to other members of their own class. The rioters are protesting against the continued operation of UberPop services despite bans. They want a return to the conventional, conservative certainties of normal cab services.
Uber is the classic example of a disruptive business that uses technology to overturn established ways to do things. GPS-capable smartphones and cars, and mobile internet, are now ubiquitous. Credit-card penetration is significant. Put those together with the fact that personal transport can be easily bought on hire-purchase and this is all an Uber-type service needs. Similar services will launch anywhere and everywhere as smartphone and credit-card penetration hits critical levels. Given that alternatives to credit-card payments are easily enabled via mobile money transfer, just smartphone penetration may be enough to drive Uber or Uber-clones.
The interesting thing is that Uber has shaken up the old model of cab rentals in almost every country where the service has launched. Different nations and different municipalities within different nations have different rules and regulations for licensing cab services. But none of those cab models could cope with an Uber. This just shows how hidebound all those models were.
In terms of essentials, cab services probably have not changed conceptually anywhere since the days of the horse-drawn hansom cab. The municipality charges a cab owner for a licence and issues such a license at its discretion. The cab service generally charges an agreed-upon tariff or a set of tariffs. Cabbies wait around at likely "cluster points" where customers are easily available.
There are local differences, of course. London cabbies have to pass a stringent test of local geography, known as "The Knowledge". New York has a restrictive "cab-token" policy, which means that each NYC cab medallion is valued at nearly $1 million.
But none of the old models, not even the radio cab models, envisaged a situation where cabbies could compete to take fares based on their own convenience, as well as that of the customer. That required the availability of fine-grained location data in real time. Given GPS and smartphones, that is now easily available. Putting together an app where fares can punch in their needs and drivers can be matched accordingly is inevitable.
Almost all the issues that have arisen with Uber services can be dismissed as nit-picking based on the application of obsolete laws. Web-cab services violate the terms of various taxi acts in various countries. Ride-sharing is illegal in many places; running unlicensed cabs is illegal; Uber-type services are deemed to offer illegal competition. Or else, shibboleths such as passenger safety (not just of women passengers) have been raised.
But the anger in France has boiled over because the services are difficult to effectively end, even once banned. That in itself should lead to a review of the situation. Why would people be prepared to break the law in order to avail of or to provide illegal cab services? Presumably because the web-cab services offer something more valuable than their conventional rivals. Uber is filling a big need that no earlier model recognised or addressed.
The logical corollary is to review the relevant rules and regulations. If there is such a high demand for location-specific, web-based cab rentals, then governments should be looking to legitimise services that safely address that demand. It is foolish to attempt to suppress that demand by insisting on adherence to outmoded rules. Uber itself may not necessarily be the beneficiary of changes in mindset. But web-cab services are just too convenient. They will become the global norm, sooner rather than later.
Twitter: @devangshudatta
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