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Sharing Economy Revolution Turns Violent in Paris: What Can We Learn?

| Monday January 20th, 2014 | 17 Comments

uber-parisParisian cabbies have unleashed hell on Uber cars over the last week, smashing windows and slashing tires. They see Uber as unfair competition…

One of the reasons we love the sharing economy is its ability to turn an entrenched industry on its head for the greater good. Generally the entry of a sharing economy concept into an industry means more efficient, cheaper access to a service and often new economic opportunity for enterprising individuals. It also often results in less consumption of energy or material as people “rent” goods like tools or even cars rather than owning them.

However, turning an industry on its head is not always a graceful maneuver.

Lets take taxis.  Taxis are a notoriously entrenched industry in most cities. Heavily connected and governed by  deeply bureaucratic rules and complicated commissions, their numbers, fares and availability are highly regulated.  As a result, in many cities, getting a cab can be both expensive and difficult – and in the case of San Francisco, futile. New companies like Uber, Lyft and Sidecar have created a secondary market for rides, powered by fast, reliable mobile technology and generally driven by independent people who simply happen to own a car and are looking to make a few bucks on the side. The result has been a huge increase in available rides at competitive prices – and a lot of upset bureaucrats and cabbies.

So are taxi drivers justified in being angry?

On the one hand, losing one’s monopoly is bound to be painful – especially in the case of a city like New York, where taxis are governed by a “medallion” system that sells the right to operate a cab for close to a million dollars each.  That money and more is paid to local governments who grant cabbies the privilege to offer rides to people.  As a result, the pinch that new sharing economy startups put on cabs is also felt by local governments right in the wallet, adding a second level of complexity to the issue.

However, it’s hard to have much sympathy for the mafia-style tactics that some cab drivers and companies have employed to slow down change. Smashing Uber cars in Paris is only the latest example.  Cab lobbies have used their influence in local government to force cease and desist letters upon startup companies and created bizarre rules like a mandated 15 minute waiting period for ride share companies in Paris before picking up a ride (they want to add even more time).  Cab lobbies are the reason the Las Vegas monorail stops short of the airport, creating an immeasurable waste of fuel and time as people wait up to 45 minutes for cabs at the terminal. They allegedly did the same thing to the Green Line at LAX.

Hence the open door to competition

These aggressive tactics, combined with high prices and poor service are what have left the industry vulnerable to competition from disruptive technology, and from the looks of the market, traditional cabs are dinosaurs.   There’s simply no objective line of reasoning that suggests traditional taxi systems have any advantages over new startups. So what’s a taxi owner, who holds a million dollar medallion to do? That’s a question that will need to be solved by taxi companies and the local governments they’re in bed with. My idea would be to ramp up their professionalism and offer the standardization of service that some people crave (not everyone is comfortable with random people picking them up).

The hotel industry has compensated for Airbnb by offering things no homeowner can provide – luxury, room service, awards points etc… Car rental companies have compensated for car-sharing services by buying them and embracing hourly rentals.  I’m certain that somewhere down the line there’s an opportunity for traditional taxis to join the party, but kicking and screaming certainly isn’t going to help them get there.

Anyone got ideas?


▼▼▼      17 Comments     ▼▼▼

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  • Rachel Galindo

    Most taxi drivers are independent subcontractors with minimum or non existing labor protections. In Los Angeles, Taxi franchises actively discourage drivers from organizing, the attempt from the writer to demonize taxi drivers for being “heavily unionized” are false, deceiving and misleading. Use the union to demonize those that are truly unionized. And I’m just pointing out one aspect of this heavily bias, opinionated writing.

  • laughtiger

    You moron — this has nothing to do with the “sharing economy”. Uber is not a “sharing” company, it is a right-wing project of crass deregulation. You’d be upset too if your job was being taken over by thugs like Uber. And you wouldn’t be wrong to fight back.

    The real sharing economy is completely different:

    http://pando.com/2013/03/19/collaborative-consumption-is-dead-long-live-the-real-sharing-economy/

    • Ken

      So you really want to try and hold the water back? This isn’t a fair fight. Technology always wins when it delivers more productivity and convenience. It’s not even about politics… People move to the path that serves them best.

      • laughtiger

        I want to move forward, not around and around in circles. How about checking out that link about the real sharing economy? A real sharing economy would be a real innovation, and a real innovation. The fact that Uber, AirBnB, and companies of that ilk try to steal the name is a good indication that a real sharing economy could be a real threat to the status quo and the corporate, propertarian system those companies are a part of.

    • http://www.triplepundit.com Nick Aster

      What are you talking about? Uber, and especially Uberx is run by independant people with their own cars. It’s a quintessential sharing economy company. Thugs?

      • laughtiger

        Uber is not remotely a “sharing economy company” … for what the term “sharing economy” really means, check out the link I sent. The term is debased beyond recognition when applied to mere rentals or vehicles for hire.

        As for Uber being thugs, they are indeed. Armed with millions in venture capital backing, they strongarm local regulators into doing their bidding and have no compunction about playing dirty (see the recent news about Uber sabotaging rival Gett) and weaseling out of responsibility (such as the recent death of Sophia Liu in San Francisco, run over by an Uber driver). As they attain international status they have more power and sway than any cab company ever has. Expect them to wield it.

        Finally, when you say drivers “own” their cars, what you mean is they “owe” their cars. This puts drivers even more under the thumb of Uber (or any cab company with a similar model) than in the traditional model in which cabs were leased by the day or week, etc. Uber’s profitability is achieved by pushing more of the costs and risks of doing business onto the drivers. Who it treats, incidentally, terribly.

        • Dave Shires

          You’ve got to be kidding me. Taxis are the thugs here, resistant to change. Uber (et all) were almost banned in San Francisco and elsewhere by precisely the same strongarm tactics you’re denigrating.

          I can’t speak for Uber vs Gett or Lyft or whatever, but my experience has clearly shown they all offer a vastly superior product at a competitive price to taxis. My conversations with Uber drivers have suggested they are quite pleased with their earnings and work as little or as much as they want.

          THe kid who got run over was a tragedy but had nothing whatsoever to do with Uber.

          What do you mean they “owe” their cars? I don’t think you know how Uber or Lyft work. If you own a car you can be a driver, it’s that simple. They don’t owe anything to any parent company.

          Who cares if drivers take on more liabilities? They clearly don’t seem to be bothered by that and maybe it’ll mean better service still….

        • laughtiger

          You “owe” your car if you’re making payments. And Uber drivers are at the mercy of Uber’s ability to change the fare structure whenever it wants. In San Francisco and Boston they have started unionization campaigns and had strikes.

          And yes, the drivers who think this through are bothered by it. The others are starting to catch on.

        • Pisseduber

          Laughtiger has a point. I drive for Uber and was fairly happy, except for the unreasonable expection that you average 5 stars out of 5, almost ride or lose your job. (you actually are hurt by 4 star ratings, go figure). They force you to buy riders bottled water or suffer poor ratings by advertising that drivers will have bottled water for free, however the driver has to pay for it. Just last night, right before the weekend rush, they sent out an email telling us they are immediately cutting our pay by almost 30% from 2.45 per mile to 1.80 per mile and tell us, don’t worry, you can just do 30% more rides and make the same money, because we will be busier. Guess what? we weren’t busier…. because we were already busy enough. On top of that, they offer promotions promising 20 dollars per hour and then don’t pay you unless you mention the missing money.

        • http://www.triplepundit.com Nick Aster

          I have read that article, and I agree with everything in it. I was not aware of the issue with Gett, and agree, that’s pretty dodgy. However, I think you’re wrong about the power Uber has (at least at this point). San Francisco took a long time to warm to Uber and Taxis remain a far more powerful lobby for the time being.

        • laughtiger

          Uber has far more money than the “taxi lobby” which hardly exists in many places. They are a multinational corporation. There has never been a cab company of that size and influence before, as far as I know.

  • gfriend

    My concern: How to keep the positive aspects of the “sharing economy” and “collaborative consumption” from fueling a race to the bottom that shreds a century of hard-won labor, safety and ethical protections. Yes, please read that Pando link noted in the comment stream. And—for some perspective on the “unions=monopoly” catechism—maybe some 20th—and 19th!—century labor history while you’re at it.

  • http://www.triplepundit.com Nick Aster

    Note – the point of this article wasn’t to praise Uber (Frankly I think Lyft and some of the others are more “sharing economy-esque”). It was to point out how violent and obstructive tactics by an entrenched industry are being used to stifle a better product. Not just a better product for customers, but probably more democratic for drivers too.

    In trying to figure out how ride sharing and taxi-style rides will look in the future, regulators and innovators need to involve all stakeholders in the discussion. It looks like both sides of the tax-ride service may be failing at that. But there is zero question that companies like Uber provide a vastly superior product, the question is what happens to the taxis?

    The Uber Black Car service, which I’ve never used, is one thing. UberX is another. The latter is clearly a sharing economy service and I’m puzzled at the level of hostility here in the comments about that.

    • laughtiger

      How do you figure that “Uber Black” is not “sharing economy” while “UberX” is? The only difference between the two is the amount of money the driver has to invest in the car and the insurance coverage. Other than that, the same service is provided. Why would one be “sharing” and not the other?

      • http://www.triplepundit.com Nick Aster

        I was under the impression that Uber Black contracted with existing fleets of limos, not individuals… but maybe I’m wrong.

        • laughtiger

          Uber Black drivers may be part of a fleet, or they may be individual owner-operators. The only difference between Black and X (besides price) is that Black drivers have commercial insurance and presumably a license of some sort to be a commercial carrier. Other than that they provide the same service and get paid for it. So what makes one “sharing” and the other not?

  • http://www.427mt.com/ Emilie Mazzacurati

    Hi Nick – you raise a really good issue. I’ve had the conversation with taxi drivers in Paris many times, and even within the industry there’s a big disconnect between the ‘old’ taxi drivers who’ve owned (and repaid) their medallion for a long time, and typically lobby against any increase in the number of medallion because it would lower the value value of the medallion they own, which is their best insurance / retirement policy, and new entrants amongst drivers who sublease the right the drive the taxi, usually at the worst hours, and never quite make enough money and don’t have a safety net.
    So while I most wholeheartedly welcome any suggestions to bring more cabs to the streets in Paris, and I generally think disruption in entrenched industries is good, it’s also important to figure out a ‘fair’ outcome for all stakeholders.
    Maybe there should be an added tax for the Uber of the world so that people who really make a living out of driving taxis don’t loose their livelihoods overnight? And then as we’ve seen in California, there is a role to play for regulators (the CPUC, in our case) to ensure the new systems provide the same guarantees with regard to safety for passengers, drivers and anybody else around, and regulators can be a little slow to catch up on this kind of things.
    It sure sounds like a broad, collaborative, stakeholder process could come up with some creative solutions that would meet most everybody’s needs. At the end of the day, there are people trying to get across town and willing to pay money for it, and people willing to drive them around, it shouldn’t be that hard to find a solution!