Really TfL? No Uber in London?

Published in CityA.M. on Tuesday 26 September 2017
From Red Flag Laws to the Uber Ban, transport as always been a battle of innovation vs. precaution

Transport for London (TfL) has just informed Uber today (22 September 2017) that it would not be issued a private hire operator licence after its current licence expires on 30 September 2017.  Only a few days ago on 8th September 2017, Taxify, the Didi-backed car-booking app that is seeking to rival Uber, has been forced to halt operations in London for breaking rules on private hire operators, just days after it launched (For those who do not know, Didi is the biggest Taxi hailing firm that defeated Uber in China and it is expanding into many countries around the world).

For many consumers, Uber is one of the best things happened in London in recent years, which brings a little affordable comfort to many Londoners and its millions of visitors to supplement the expensive, out-dated, unreliable London underground, the slow and diesel smoke puffing double decker buses, and the ridiculously expensive Black Cabs which is akin to a mild form of extortion, not to mention the terrible congestion and congestion charges that restrict people using their private cars.  Yet TfL wants to kill off one of only a few bright spots in London transport. 

In both cases, the decisions were made on the ground of regulations.  Perhaps it is time to revisit those out-dated regulations to unleash the creativity and innovation that is more essential for London than any other time in history. 

The Digital Economy

We are in the digital age.  The UK Research Councils alone invested £154.15 million in the last few years to support research in its flagship Digital Economy Programme; and the UK government and its various departments and agencies are all committed to supporting the digital economy – from the London Tech City to numerous other initiatives across the country.  The EU invested billions of R&D funding over the years to support the digital economy too, particularly through its Frameworks Programmes, and Horizon2020. 

However, look at the global digital economy landscape, the US has Google, Facebook, Amazon and eBay, the born-again Apple and a plethora of other digital economy firms, including sharing economy firms typified by Uber and Airbnb.  In China, the famous trio of BAT lead the way – Baidu, Alibaba and Tencent, with a plethora of other digital economy firms, from JD.com to Didi Chuxing and bike sharing firms such as OfO and Mobike, which are now entering the UK and Europe (and other countries).  In contrast, the UK and Europe not only failed to produce any serious Unicorns in the digital economy that would get anywhere near the scale of Facebook, Google or Alibaba and Tencent - duo no small part to rigid regulations that stifle innovations - Transport for London now wants to shut down Uber and deny people the little convenience of the digital economy brought to us by our friend from across the pond.   

Back in 1865, the LocomotiveActs (also known as the Red Flag Act) was passed in the United Kingdom, a policy requiring self-propelled vehicles to be led by a pedestrian waving a red flag or carrying a lantern to warn people about the vehicle's approach.  This has – for a while – prevented motor cars travelling faster than a horse-drawn carriage.  Similarly, in the United States, the state of Vermont passed a flurry of Red Flag Laws in 1894. The most infamous of the Red Flag Laws was enacted in Pennsylvania in 1896, when legislators unanimously passed a bill through both houses of the state legislature, which would require all motorists piloting their "horseless carriages", upon chance encounters with cattle or livestock to (1) immediately stop the vehicle, (2) "immediately and as rapidly as possible... disassemble the automobile", and (3) "conceal the various components out of sight, behind nearby bushes" until equestrian or livestock is sufficiently pacified.  Fortunately the bill did not become law, as the Governor of Pennsylvania used an executive veto. 

Imagine if we had to drive a car - or bus - with a person walking in front it weaving a flag to warn pedestrians today.  We can all laugh at how ridiculous these Acts were even if they served a particular purpose back then, and perhaps even made sense to some people, TfL is now probably doing a similar thing to Uber.  Regulations could not – and should not – stop technological advances and innovations that would improve people’s lives.  Uber clearly improved many people’s lives in London and all around the world, offering employment opportunities to a large number of people, and providing affordable and convenient door to door transport services for a huge number of consumers.  If there are issues and concerns, then TfL should work constructively to address them, not throwing the baby out with the bathwater. 

Time to Retire Out-Dated Regulations and Institutions for the Digital Age

This reflects a much deeper problem in the UK where everyone talks about supporting creativity and innovation, but many out-dated rules and regulations – and indeed, institutions – are making it difficult to implement meaningful changes.  We have all suffered the hassles and disruptions by the unreliable and expensive London Underground.  In February 2017, London underground drivers went on strike again, causing chaos and misery for millions of commuters, not to mention the huge economic and other damages to businesses and individuals.  It turned out that the reason for the strike was that eight train drivers (yes, 8) were unhappy about being moved from one depot to another.  How could a handful of train drivers hold a whole city to ransom when technologically we don’t really even need train drivers at all?  The technologies for driverless trains have been available for decades, which could serve London far better than human drivers, at huge savings to millions of people, but we are all repeatedly held to ransom by the powerful trade unions, stopping efforts to modernise the London underground system, at high costs for commuters and for the economy. 

According to a report by the Telegraph in early 2016, the pay and work conditions are exceedingly generous for London's tube staff.  Thanks to the unions' multi-year deal with London Underground, keeping pay above inflation, a newly-qualified tube driver starts on a salary of £49,673 a year. This can rise after five years to £50,000 - £60,000. The drivers get £24,133 at the start of their training period rising to £30,166 after completing initial assessments - with their starting salary, on completion of their 12-16 week training, rising to £49,673.  Their starting salary easily dwarfs the starting salaries for workers in other sectors.  In fact they can earn more than some hospital doctors. Meanwhile, the average salary for the British worker is £26,500.  To put this in context, a newly-qualified soldier starts on around £17,945, while a tube driver rakes in nearly three times as much. The capital's tube drivers make about twice as much as nurses, policeman, fire fighters and teachers. In order to become a tube driver, only GCSEs in Maths and English are needed, with some medical or electrical knowledge being useful too.  This is one example where a small group of people hold the whole city to ransom.  Now the black cab drivers are trying to use their influence to kill off Uber.  We need to reform out-dated regulations and institutions, not killing off innovations.

We are in the Digital Economy, and progress will be made with or without Britain.  As the UK exits from the European Union, we have a serious choice to make: to embrace change and new opportunities and thrive in the brave new digital world, or continue to hide behind past glory and out-dated institutions and be left behind.