Uber is not innovative. It thinks it’s above the rules and London is right to want it out.
The recent decision by Transport for London to revoke Uber’s operating license at the end of September 2017 has prompted shock far beyond the city’s borders. Some condemn the transport authority for killing 40,000 “jobs,” others cheer now that the exploitative app will no longer be able to operate, while another group mourns the potential loss of their cheap taxi service. But wherever one stands, it’s hard to deny that Transport for London is justified in its decision.
Uber acts as though its roots as a technology company and the fact its service is available through an app on your smartphone places it in a different category than other transportation companies. As a result, it continually ignores the safety regulations and labour rules that other companies have to operate under. And it’s precisely for this reason that it’s able to undercut its competitors. Not because it’s playing fairly, but because it’s exploiting its workers and refusing to observe the same standards as other companies.
Transport for London has taken the bold and courageous step of saying that if Uber continues to want to operate as a rogue transportation service, it can no longer do so in London. It must follow the same rules as everyone else, or it can waive goodbye to its 3.5 million customers in the city. Specifically, in justifying its decision, the transport authority listed problems with Uber’s approaches to reporting criminal offences, obtaining medical certificates, and performing criminal record checks, as well as its use of a software program to evade global regulators, as reasons for banning the rail-hailing service. If Uber really wants to be a safer alternative to black cabs, it should have no problem abiding by these regulations, yet, curiously, it refuses.
It’s also important understand why Uber is able to offer cheaper fares than black cabs and other transport companies. Uber would have its users think this is simply because it uses an oh-so-innovative app as the core of its platform, but this isn’t true. It offers lower prices for three important reasons:
- Uber ignores regulations that other companies do not.
- Uber exploits its drivers by denying them minimum wages and benefit packages, forcing them to pay all the costs associated with operating their own vehicles, and consistently slashing the rate they’re paid so they need to drive longer hours just to earn the same amount.
- Uber doesn’t charge the actual cost of a ride to its users. Fares are subsidized by up to 59% with venture capital money — not because Uber is benevolent, but because it wants to drive out the competition and achieve a monopoly.
This last point is an important one. Uber relies so heavily on subsidizing its fares to keep its users that achieving a monopoly is the only way it can survive; because only through pushing out its competition will it be able to raise its prices high enough to make its business model sustainable. Any private company set on monopoly will not play nice with its competitors, and that’s not the kind of company we need providing such an essential service as transportation in one of the largest cities in the world.
Every Uber trip is a vote for an Uber monopoly. Every Uber trip is a vote for exploitative labour practices which deny drivers security and fair wages. Every Uber trip is a vote for a service that thinks it’s above respecting basic regulations design to ensure the safety of its passengers. And Transport for London, along with many Londoners, is right to want it out of the city.
Finally, those who rely on Uber need not be scared that the loss of Uber means they will no longer be able to call rides from an app on their phone. Austin went a year without Uber and Lyft — again, because the companies didn’t want to follow the rules — and a number of services arose in their absence using different business models that continued to offer convenience, while respecting the rules and paying drivers fairly. There’s no reason the same couldn’t happen in a London free of the exploitative control of Uber.
