“Got chased by a mob of taxi drivers who threw rocks,” tweeted the singer Courtney Love from Charles de Gaulle airport.
She was caught up in what is becoming a global trend: the backlash against Uber. French taxi drivers were protesting on Thursday at vehicles operated by drivers working for the Californian business, which functions like a taxi-hire company, but via smartphones and without directly employing its drivers.
The taxi drivers were protesting at seeing their livelihoods threatened: it costs more than €100,000 (£71,000) for a taxi licence in Paris. Uber drivers, though, pay nothing, using their own cars and just paying a proportion of their takings to the company for the rides they pick up. There has been similar anger, though not riots, in New York where taxi licences, called “medallions”, can cost a million dollars. And regulators, courts and police have been raising concerns around the world, too.
It’s been a tough week for Uber. The protests in France, where UberPop (as it is called locally) has been declared illegal yet still operates, came just a week after California’s Labor Commission decided that Uber drivers there were employees, not contractors – a distinction that could impose significant costs and responsibilities. Uber had not responded to a request for comment at the time of writing.
Uber’s troubles signal a troubled birth for a 21st-century concept: the sharing economy. In this brave new world, untapped capacity – such as idle cars and rooms – is made available for hire, increases efficiency and lowers the price of those goods and services.
It is not just Uber that is facing resistance over the sharing phenomenon. Paris is also the scene of another collision between a company from the sharing economy and the authorities: about 2% of all apartment units in the city are available for rent through AirBnB, which connects apartment owners and short-term renters. With 40,000 listings at the start of April, it’s the company’s largest market in Europe, ahead of London with just under 25,000 and Barcelona with 16,600.
Investigators from Paris city hall have been trawling the city and can impose fines of €25,000 for any unlicensed short-term rental; in 2014, 20 owners of 56 leased properties were fined a total of €560,000. The fines come despite a deal made in March, whereby AirBnB would collect and pay tourist taxes for out-of-town visitors to apartments. Hotels, too, are angry at seeing their revenues eroded by the upstart.
AirBnB has met resistance elsewhere too, usually from local governments concerned they are missing out on taxes. Barcelona and Berlin have both brought in tough regulations that will stifle AirBnB’s growth. But London, by contrast, relaxed old laws following a 2014 government review of what might hold “sharing economy” companies back.
Forecasts suggest such businesses will be huge: PriceWaterhouse Coopers forecast last year that total revenues for the five largest sharing economy businesses could be £9bn in the UK by 2025, and $335bn globally. If the taxi drivers of Paris and labor commission of California will let them, of course.
“In some ways, the sharing economy is a throwback to the pre-industrial age, when village communities had to share resources to survive,” said John Hawksworth, PwC’s chief economist. “They built up trust through repeated interactions with people they had known all their lives.” Digital systems mean trust can work globally, and with people we’ve never met, he argued.
But as Love discovered, the sharing economy can create significant tensions. Some view the taxi drivers’ anger as a repeat of the Luddite protests of 1811, when textile workers protested and smashed up labour-saving looms and frames, and just as doomed to fail.
“These new services are more than just a cheaper alternative to traditional providers,” wrote the Los Angeles Times . “They’re a breakthrough for people who have something to offer the public but no way to do so effectively on their own.”
By providing a platform for drivers, or part-time workers, or spare room owners, it argued, the new companies unleash new sources of economic activity that was previously suppressed.
The deeper question though is whether such peer-to-peer systems erode wages and worker rights even while they create jobs. Uber claims drivers can earn significant amounts of money, but studies and undercover experiences by journalists have demonstrated that requires huge, or even impossible amounts of time.
One writer discovered that to earn Uber’s promised median $90,000 a year after expenses in New York, she would have to work 365 days – each of 27 hours.
Meanwhile, in Paris the biggest threat is that the taxi drivers will withdraw their labour – or sue their “employers” out of existence. With California having struck the first blow, there may be trouble ahead.
A spokesman said: “Uber works very hard to provide a safe, reliable service. We are very focused on the safety of both riders and drivers so the violence is troubling and cannot be condoned. We understand the concerns and clearly need to do more to explain how new technology creates new job opportunities, which thousands of people throughout France are already using to earn a better living.
“A million users of Uber in France already love the service. There are legal questions which the French Constitutional Court will answer and, while all recent decisions have been in favour of uberPOP, we will wait for that ruling. We are always happy to answer any questions authorities may have and we remain keen to sit and talk with the government to find a solution.”
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