Uber in London: the battle between public and private regulation

[This is a reblog from Essex Law Research: “Uber in London: the battle between public and private regulation“]

Dr Yseult Marique and her co-author Enguerrand Marique have published a chapter, entitled ‘Uber in London: The battle between public and private regulation’, in the collection Uber & Taxis: Comparative Law Studies, which was edited by D Renders and R Noguellou (Bruylant 2018).

 

The expansion of Uber as a major transport provider over the last ten years transforms deeply what is expected from transportation policies in many capitals around the world. It also draws the attention on the digital economy and its social and economic consequences for drivers. Tensions arise about the best ways to tackle the externalities arising from the digital economy: should Uber be banned all together as it has been the case in Spain and France? Should it be more strictly regulated as in California? Or should the market be left to bring competition and self-regulation of some kinds? To try to better understand the strategies followed across the world, the book Uber & Taxis: Comparative Law Studies brings contributions pertaining to 22 countries together, looking in a systematic way into two specific areas: first, how were taxis regulated before the advent of Uber and similar digital platforms? Secondly, how has regulation changed since Uber appeared and how does it address the specific social, economic and environmental challenges posed by Uber?

Our book chapter tries to answer these questions in the specific case of London. London is especially emblematic for its taxis and black cabs. It has also undergone a dramatic expansion of private hire (‘PH’) (such as Uber) in a very short time: in 2011, there were only 77,000 taxis and PH drivers throughout England. In 2017, the taxi and PH market in London represented ca. 150,000 drivers, i.e. nearly 40 % of the overall 356,000 licenced drivers on the English market. Very few aspects of this market are regulated. The quality of taxi drivers, the standards of vehicles and fares are subject to regulation mainly. However, the number of taxis is not limited, and taxis have no monopoly: besides taxis, PH has been operating since the 1960s and regulated since 1998. Therefore, the market is left largely unregulated regarding its outcomes themselves.

Such an expansion brings specific challenges for London in terms of the number of drivers to control and how to ensure that this control could be maintained at an appropriate level. It also means that many Uber drivers were not professional as black cab drivers had previously been, making the need arise for a range of driving practices to be policed (e.g. taxi ranks and priority lanes). Yet, London manages to address these challenges without new powers being delegated to it or without having to invent new regulatory tools. In short, the regulatory toolbox is at first sight satisfying. Let us unpack this claim before reflecting on it.

Transport for London’s (TfL) toolkit includes licensing, which has two main noticeable features: a) a fit for purpose test for drivers and b) a licensing fee. These two features have been tweaked in the case of Uber. Firstly, the fit for purpose test is no longer applied by Transport for London itself in the PH system (such as Uber). It has been transferred to Uber which now bears the risks of poor assessment of drivers’ qualities (i.e. withdrawal of the license). Secondly, the licensing fee became more differentiated. In the case of Uber, it has been multiplied by 1000 (Yes!) and stands now at £ 2,900,000 payable over 5 years. Other aspects such as a technical test, an English test, waiting times, tariffs and taxi meters, and hotlines have all been subjects to discussions and tensions. For instance, establishing a hotline for non-urgent matters is a significant burden for Uber, while not proving efficient. Similarly, the use of a taximeter, and of smartphone computing time and distance into a price, has been challenged, but ultimately accepted by the courts. Small differences remain to distinguish taxis from PH. For instance, upon a reference for a preliminary ruling to the European Court of Justice by English courts, the court recognized that ‘instant hailing’ was distinct from ‘hailing’. Waiting time and waiting areas cannot end up decreasing public safety. Yet, regulatory principles basically have not been changed after the advent of Uber in London.  

The regulation of Uber in London triggers three comments. First, the main problem brought by Uber is not the availability of regulatory tools to address Uber’s innovative features, but the need for TfL to adapt its enforcement strategy. In looking for ways to ensure compliance in a changed environment, more inspectors are needed, which is costly for TfL, yet extremely important to ensure clients’ security all over the city. Here, TfL made Uber bear in the first place the extra costs that it generated for TfL. Secondly, the London Mayor is not satisfied with the current solution and he has asked the national level to get broader powers to regulate private hire (and to impose a maximum number of licence). Thirdly, Uber is only one part of the transport policy in London. The overall policy objective in London is to ensure more sustainable transport, which means that too many cars – Uber car or otherwise – are not welcome in London. A range of measures are thus taken to seek to limit their use in general. At the same time, a broad range of transport means is welcome as it makes mobility more flexible. In short, London can see Uber both as a blessing and a curse – what matters is not to ban it, only to keep it within reasonable measure. This leads TfL to seek to tweak Uber’s licence to adapt it to the ongoing changes in the ways in which mobility platforms work. Here a striking development is the fact that Uber is now operating in London under a short-term licence that is regularly renewed subject to modifications. Such practice of short-termism compels economic actors to behave on their best at all time, mindful to take social interest to hart rather than thinking about price cuts in the long term. A creative way to keep Uber under TfL’s control without making any drastic innovative changes to the regulatory tools?

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