Philip Mcleod

The McLeod Report - London, Ontario

A regular commentary on civic affairs in London, Canada by journalist Philip McLeod.

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The Uber-ized marketplace

LATEST REPORT #1,099: The technology tidal wave has already changed the way we get our entertainment, our information and our mail; it has changed how we buy and sell things. And most of us benefit, many jobs have been negatively impacted. Taxi cab drivers could be next. 

Friday, April 24, 2015 – London Ontario

Public ambivalence toward the potential marketplace upheaval caused by companies such as Uber, the technology driven anti-taxi ride-sharing company, is revealing.

On the one hand, a lot of people, especially young people, seem to like the idea that taxi fares might be lower, much lower even, if (when) Uber comes to London. On the other hand, the fact this international company seems to thrive by thumbing its nose at existing government regulations seems not to bother anyone – except, of course, cab owners and drivers, and government officials.

The technology tidal wave has already changed the way we get our entertainment, our information and our mail; it has changed how we buy and sell things. And while billions of people around the world have undoubtedly benefited, in the process millions of jobs – including many here in London – have been negatively impacted. 

Now technology is about to change at least one of the ways we move back and forth across this city. As many as 1,000 jobs, many of them currently filled by newcomers to London, could be affected. 

But here’s an interesting consideration in all this: Is technology also in the process of significantly altering how we are governed?

Uber is an American company headquartered in San Francisco which develops, markets and operates the mobile-app-based transportation network also called Uber. At latest count it operates in 55 countries and more than 200 cities. 

The Uber service works like this: You download a free application to your smart phone and use it to submit a trip request to Uber, which is then routed to crowd-sourced drivers. When the ride is over, the charge – usually much lower than regular taxi fares – is billed directly to your credit card.

Currently Uber is advertising for drivers here in London, although a company official said this week a final decision has not yet been made about launching the service here. 

While the Uber official told city council’s community and protective services committee (CAPS) it loves to be regulated, it has no wish to be regulated in the same way taxis and limousines are currently here in London, or elsewhere in most of North America.

Therein is the rub. 

The taxi business in London, as elsewhere, is heavily regulated by City Hall. Council sets the fares, regulates the number of taxi licenses available, and approves all the rules under which taxi cabs and limousines can be operated and by whom. There are several reasons why council believes this is necessary, the principal one being public safety.

That control, though, has several unintended consequences.  Because there is a limit on the number of licenses issues, a grey market has developed that sees them change hands for upwards of $50,000 a plate. 

As well, on weekends when the bars close long after public transit shuts down, hundreds of people are looking for rides home. For customers that means waiting and waiting until a cab is free. For cab drivers it is a lucrative and captive business.

The Uber system puts no limit on the number of cars and drivers available so it can flood the zone at bar close, snapping up most of the available customers. That essentially reduces the value of a taxi license to zero, meaning a lot of holders in London are going to be hugely out of pocket.

While as a license holder you should expect the city to enforce its regulations, the simple truth is City Hall does not employ nearly enough bylaw officers to do this. And as one cab driver noted at the CAPS meeting this week, for companies like Uber a few tickets here and there is simply the cost of doing business.

Governments govern by regulation. More and more technology is rendering regulation passé because technology-driven newcomers set their own rules. For example, the City of London insists a retail businesses must buy an expensive license to set up shop here. But you could easily flout that regulation with an internet-based retail order desk in your basement that sells goods shipped from away by courier. 

The Canadian Radio and Television Commission (CRTC), a federal government agency, tries to tell us what we can watch and how, regulations quickly overcome with any device that connects to the World Wide Web. Netflix anyone?

Should we care? As The Globe and Mail pointed out in a column this week, most often we don’t. Those who protest tend to be the ones most negatively affected. That was true at the CAPS meeting – only cab drivers and owners showed up to speak, their customers couldn’t be bothered.

  In fact, mostly we welcome the technology bonus because now we can steal our music, mostly without consequence; get all our information and then some for free; buy from around the world at prices lower than you can shop downtown; exchange commentary with friends and relatives in nanoseconds; and soon, probably, get home after last call with less hassle and lower cost.

And all of it with virtually no government regulation.

There’s a lot to be said about a world in which the marketplace rather than government decides how things work, possibly on a day-by-day, even minute-by-minute basis. 

But just for argument, suppose some entrepreneur used the same business-building philosophy as Uber and decided, to hell with the city’s regulations, we’re opening an amateur strip club right next door to you. Would that change your mind about the marketplace mayhem (an example of which you’ll find here) Uber seems determined to let loose?

As Uber might say, sorry about your luck Chuck.