The decision by Transport for London (TfL) last week not to renew Uber’s operating license in the British capital brought both praise and condemnation, and sparked a wider debate on the merits of the service operating in over 96 European cities.
London’s mayor Sadiq Khan supported the decision by the transport regulator, which cited the firm’s approach to reporting criminal offences and background checks on its drivers as its primary concern. Three days later over 700,000 have signed an online petition calling for him to reverse the decision. Uber’s CEO Dara Khosrowshahi has apologised for mistakes made, saying that they “got things wrong along the way” and that Uber must change in light of what happened. Khosrowshahi did not specify exactly what these mistakes were, but the concession was enough for Khan to ask the transport regulator to meet the company CEO.
Uber’s expansion has often been problematic, bringing the company into conflict with local judiciaries from Austin to Paris. A pattern often emerges: the company will move into a new area before being forced to adapt services to court demands. Uber will appeal and either win, or like in Austin, Texas – where they were forced to comply with regulations stipulating the finger printing of drivers – they will reluctantly halt operations for the foreseeable future.
So is London any different? Will the conciliatory tone struck by Uber’s CEO be enough to reverse the decision? What does the future hold for companies like Uber and the digital economy whose expansion they spearhead? In an interview with FRANCE 24, Denis Jacquet – entrepreneur, author and observer of the digital economy – gave his thoughts on the news from the British capital and what may lie in store.
FRANCE 24: How does TfL's handling of Uber compare with the approach taken by other cities and countries?
Denis Jacquet: There have been attempts to stop the digital economy in the US, UK and Europe, to make sure they comply with the rules set for a different type of economy, when the internet didn’t exist. The way it was handled in France was to gather everyone around the table and to determine what the new platforms should and shouldn’t be doing, and negotiate with the traditional drivers to see what they would accept. So it was suprising to hear that in London these guys were suddenly out of business…It is the first time I’ve seen such a hard stance taken.
F24: Is this the wrong way to negotiate with this kind of business model?
D. J.: At some point, when customers say they love it, it’s very hard to stand against those who will happen to vote for you at the end of the day. So when people in New York and Paris used to wait hours for a taxi and now you call one in 3-5 minutes, I think people are now so used to this kind of comfort that they will make their voices heard. It’s very suprising that they [TfL] didn’t talk to the drivers, and that they didn’t ask customers their opinion.
Should we stop the digital economy from growing? After Brexit then Uber, it’s like going back to the Stone Age.
F24: How is Brexit significant? Do you see a trend emerging?
D. J.: I think it’s a coincidence, as it is a US company not a European one. But it sends weird messages to the world, first with Brexit then going after the digital companies. I’m not saying Uber is perfect, but at some point politics is about communication and the signals you send worldwide.
F24: Uber has faced difficulties in France in the past, with the banning of their UberPOP service. Does Macron’s public support of entrepreneurship mean the next few years will see a further expansion of enterprises like Uber?
D. J.: Yes, but they will expand anyway. People want to order from their smartphones, not go about things in an old way. Plus these are worldwide companies, so if they are blocked in a particular area the pressure from the economy and the customer will mean at some point the need will be met.
F24: Does France benefit from this kind of economy?
D. J.: In France we have a huge rate of unemployment; we are unable to provide people with jobs. So at the end of the day we should be happy that these platforms provide employment for so many people. But it’s not an excuse to say ‘Ok, no regulation’. That doesn’t mean applying the [existing] labour rules to this new economy, but to at least set a base where there is training [for drivers], social welfare, and a minimum of protection.
F24: The job creation argument is often used in support of Uber, yet the company has invested millions in researching self-driving cars. Is full automation the future? What are the possible knock-on effects?
D. J.: Automation will kill millions of jobs everywhere, but it is a way for the economy to proceed and to use this profit to pay for the growing pensioner population. Our economy is unable to pay for this: automation is simply one answer. But it’s a scary situation and your question is important. Will automation for short-term profits mean long-term loss? People like Uber will try to replace human activities by automation, but what do we create in return? Five million truck drivers in the US may be without jobs by 2023. What will we do with these people? They will not become data scientists or marketing managers at Google. It’s a huge challenge.
Unfortunately most of these companies really don’t care about their employees. They will dump them as soon as automation becomes an option. Many people will be unhappy and at some point this will translate into political votes, because if people think that the past is better than the future, they will vote for those who promise a return to the past.
Date created : 2017-09-25