Uber Bans are Bad for Cities, and London is No Exception
In a tale as old as time, a city has opted to cut the engine on Uber, and the consequences are likely to be less than desirable. The culprit? Mayor Sadiq Khan and the city of London. The Motive? That’s not as clear.
There are several ways to evaluate ride-sharing in the public square, and Uber delivers at every turn. The service is a net benefit to the safety, economy, and environment of the city it serves. Transport for London raises questions as to the motive behind its decision when the numbers are scrutinized and Uber is not found wanting.
Transport for London (TfL), the regulatory agency responsible for Uber, declared the company “not fit and proper” to hold an operating license, listing a number of reasons on their website in a public statement. Fit and proper is a formal standard in the UK that certain businesses are required to meet to ensure organizations meet their industry requirements.
Ostensibly, Uber was banned for public safety reasons. TfL cited Uber’s approach to reporting criminal incidents, conducting background checks, and the use of an app called Greyball. In a piece for the Guardian, Mayor Khan said that “providing an innovative service is not an excuse for it being unsafe.”
One look at the numbers says London made a terrible decision.
Take, for example, the criminal reporting issue TfL has with Uber. Proponents of the decision point to Uber’s reputation for sexual assault. According to the Sun, 32 reports were made against Uber drivers in London over the period of one year. A startling number, until you divide it by the number of trips Uber provides during that time — over a million a month on average. That creates a .00027 percent chance at worst (though the number is likely inflated because that is based on one million rides a month, and doesn’t factor for whether criminal claims were substantiated).
Counter Uber’s record with the fact that there were 122 sexual assault claims made that same year against other transportation services, including taxi drivers, and you begin to wonder why the same safety standards are not being applied to ride services across the board.
It’s no secret that the Black cab associations want to see their biggest competitor shut out of the city. Reducing competition allows cabbies to charge higher rates and take a bigger slice of the pie when it comes to overall ridership. After TfL made its decision, cab bosses came out in support of the ban, calling it “the right call.” It doesn’t help matters when TfL tweets “Cabbies have to memorise 25,000 streets and 100,000 landmarks,” in advertising a play about black cabs just two days before they gave Uber the boot. It is likely a coincidence, but not a good look either way.
Ultimately, the decision is a public policy matter, and an Uber ban doesn’t make sense. Officials must not only take into account the alleged problems with Uber, but also the benefits it brings.
Among those benefits is job creation. Uber said in a statement that it has 40,000 drivers in London. These drivers range from single mothers who can use Uber’s flexible hours to make much needed income to drivers like Pal Sighn, a 60 year old Londoner who relies on his Uber income to pay his bills and provide for his family.
Secondly, there are opportunity costs to consider. Uber has made traveling in London cheaper for everyone — so much so that a petition has garnered over 500,000 signatures in protest of Uber’s ban. For every pound saved on a ride, that’s another pound that can be spent elsewhere in the economy. Because riders are able to buy their next priority instead of spending it on transport costs, the spending becomes more efficient and each pound becomes more productive. Cheaper rides also make transport more accessible to people who can’t afford expensive rides.
Third, there are environmental concerns that have to factor into policy-making. For every person that takes an UberPOOL carpooling service that would have otherwise driven, they reduce CO2 emissions. Uber and UberPOOL also lead to fewer cars on the road, and free up scarce parking spaces in big cities. This leads to cleaner city air, cleaner city streets, and less time spent commuting, which in turn leads to a more productive workforce.
On top of questionable motives on the part of TfL and a vast number of economic benefits that Uber provides, we have to consider whether the ban itself will actually be effective.
London is not the first city to ban uber. US cities like Portland, OR, and Austin, TX and foreign cities like Brussels, Belgium have previously banned Uber. Here’s a nifty map that breaks down the current list of locations in which an uber ban is in place.
The problem with these bans in specific cities is that they often cause more problems than they create. For one, sometimes Uber chooses to continue operating in said cities. Operating in the black market compound the issues that regulatory agencies like TfL have in the first place: lack of oversight, increased risk of danger, and a lack of tax revenue, to name a few.
Otherwise, Uber might decide to leave the city all together. When it happened in Austin, it was a disaster. It created an unregulated, unmoderated service on a facebook page. That’s right, former Uber and Lyft users turned to a facebook page with more than 30,000 members to request rides. Because this is done on facebook, there is no background check performed on any driver offering a ride. The fares exchanged are determined on a rider-driver basis, not through an app, which means earnings are under the table. Austin created a ride-sharing black market.
Uber’s absence in Austin also lead to such an overload of demand during SXSW that Uber and Lyft’s smaller competition, RideAustin, crashed for hours. Oh yeah, and it might have caused a brief increase in DWIs before leveling off as other local ride-sharing apps filled the void.
Uber is a controversial corporation, and it has been surrounded in its share of scandal. A bad reputation is not enough to justify a ban of the service, though. The cost of allowing Uber to operate in London is far outweighed by the cost of revoking its license. In terms TfL might find persuasive, more people are better off in London while Uber is in town than when it leaves. Let’s hope that TfL sees it that way too as Uber undergoes the appeal to stay in the city.