Why on earth are Conservatives trying to stop Uber breaking London’s black cab cartel?
You have a car. I do not. I have money. You do not. I need to go somewhere. You are willing to take me there. If you do that, I will give you money. At the end of this process, I will be in the place I want to get to, and you will have some money. Everyone gets what they want.
Simple, isn’t it? Two people agree between them to a mutually beneficial exchange. So simple it makes you wonder why anyone else needs to be involved. But of course, someone, or rather something else, does want to be involved: the state.
The state takes a very close interest in taxi services. That interest is threatening to smother Uber, a firm that does something close to what I describe in that first paragraph.
Until now, that protectionism had not come to Britain, where the value of free markets is generally better understood than in places like, say, France. Sadly though, London is turning a little more French, by proposing daft regulatory burdens that will make it harder for Uber to do business.
By no coincidence, this follows a long and loud campaign by the Licensed Taxi Drivers Association, which speaks for black cab drivers. To be clear, the LTDA is a cartel, which the OED defines as “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition”.
Of course, the LTDA doesn’t admit to being a cartel. It says that the restrictions it places on the number of people who can drive black cabs are all about serving the customer, providing them with a well-maintained vehicle and a driver who knows his way around London.
Which is fine, but shouldn’t customers get a say? If, as the cabbies allege, Uber supplies drivers who cannot speak adequate English or who do not know the way to their destination, some consumers will not use their services, perhaps opting to pay a premium for those features, which black cab drivers say they can supply.
Yet Transport for London doesn’t want informed consumers making free choices between transport providers.
Some of its proposed restrictions are almost explicitly anti-competitive: companies “must not show vehicles being available for immediate hire either visibly or virtually via an app”. That’s right, the state wants to stop people knowing about potential suppliers of a service they want to use. Bonkers.
But that’s not the maddest thing about London’s attempt to kill Uber. The maddest thing is that London is run by a Conservative. TfL answers to Boris Johnson, who knows very well that markets make people richer and happier and more free, that competition between suppliers should be encouraged, not thwarted.
If you doubt that a free contest between commercial rivals benefits consumers, consider this: as a result of Uber’s entry to the London market, black cab drivers are now offering their own app-based deal that means significantly lower fares for customers.
Lower prices mean consumers have more money to spend on other stuff, including more taxi journeys. Everyone wins. That’s the magic of the market.
Yet Conservatives are trying to break the spell. The party of Margaret Thatcher is conniving in an attempt to use state power to stop the market for taxi services becoming more free and competitive. Instead of levelling the playing field so that intelligent adult consumers can choose for themselves how to travel and spend, Conservatives are restricting choice and protecting a cartel. Think again, Boris.
TfL is consulting on 25 proposals for private hire companies – several of which could seriously affect Uber: