The recent clash between Uber and the London ‘black cab’ establishment has brought to light how heavily regulated the British taxi industry really is. Black cab drivers and supporters frequently claim that private hire companies should be subject to the same kind of regulation as them, and that the differing levels of regulation give private hire companies an unfair advantage.
In a sense that is true. Competitors in the same field being subject to different regulations does not allow them to compete fairly, to the detriment of industry and customer alike. But why is the answer always to increase regulation against the less burdened private hire companies? Why aren’t the taxi drivers calling for their own onerous regulations to be reduced? Surely that would remove the unfair advantage.
For the casual customer, the difference between a traditional taxi and a private hire vehicle is fairly insignificant. One is hailed on the street, the other booked in advance. Both consist of a driver in a car who takes passengers on generally short urban journeys. The only difference that really stands out to the consumer is the alarming rift in price.
Why then, do taxis have to conform to a stricter set of regulations? If one accepts, for the sake of argument, that some regulation is necessary in the basic fields of passenger safety and mechanical maintenance, why should taxis have to conform to a certain visual appearance or design style? Why, in some cities, are their numbers limited by law? Why in London must their drivers be mandated to spend the better part of three years passing the most strenuous geography exam in human history?
These are things that do not come within the purview of ensuring customers have safe journeys to their destinations. Rather they are indulgences by local authorities; pointless controls in matters that should be up to the providers.
If a provider wants to subject its drivers to ‘the knowledge’, it can, and if passengers value that they can choose that provider. The same goes for a traditional black cab vehicle design, a certain colour scheme or a particular seating arrangement.
It would be pointless for a local authority to require WiFi, another non-essential luxury, yet that is something which the market is now bringing in of its own accord.
The problem lies in the fact that these are practical arguments. The arguments coming from the black cab side of this debate, and from their opposite numbers in cities around the world, are not based on practicality. They do not operate from a ‘passenger first’ point of view. This is less about transport, and more about a certain culture.
It comes ultimately from a sense of entitlement about the right to a job, or the right of an industry to exist. Whether or not that job or industry serves a useful purpose is almost irrelevant in this culture. The idea seems to be that someone in a particular job is entitled by some means to remain in it, and that practicality and market should be set aside to ensure that continues.
The industry does not exist for its employees though. The industry exists because a passenger needs to get from A to B. That is the sole purpose of the entire operation. Job loss is regrettable, but would it be sensible to keep taxis running if their ridership declined anyway, for a different reason?
The present regulatory situation creates an unfortunate false dichotomy between regulated high-pay jobs and a minimum wage alternative. Free market competition should produce an environment where multiple providers are able to compete, not just for passengers, but for staff as well. If one operator pays better than another, it will attract the better staff, thereby giving that operator a competitive advantage.
The sad truth is that this industry has never had the chance to operate in such a manner. The bus industry, conversely, has to some extent. This is evidenced by emerging ‘gold’ and ‘sapphire’ brands with specially trained drivers and adverts boasting £400 per week wages. These are the products of a deregulated, competitive industry.
When deciding the future of an industry, the question has to be what the purpose of that industry is. Its purpose is not to provide employment, nor is that the purpose of any industry. Employment is a type of trade, one of many forms of exchange a person can engage in to their profit. It is not the sole means of making money, it is not the only way to operate in society and it is not a birth right.
The purpose of both the taxi and private hire industries is to provide transport. While some basic regulation may serve that end, debatably, unbalanced, over-reaching regulation does not. What does is a system in which the consumer is put first and given control. That is a free market system, where consumer will determines the form of the industry.
Black cabs may have historical value, but their relevance is diminishing and that is a natural progression. If demand exists for them, they will continue. That is for the passenger to decide – not the driver, and not the local authority.
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