Since 1779, when English textile workers began destroying labor-saving machinery because they feared the new equipment would adversely impact on their livelihoods, technological advances have elicited hostility and opposition from those threatened with displacement. Wednesday's taxi driver strike over the impending arrival in Canberra of the ride-sharing company Uber had a certain Luddite air about it, with some protestors carrying signs which read "Ban Uber", and "Stop Uber. Save taxis".
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The 100 or so cab drivers and operators who descended on the Legislative Assembly received a somewhat sympathetic hearing from Territory and Municipal Services Minister Shane Rattenbury. His take-home message was clear, however: the government would not, and could not, prevent Uber from rolling out its Territory service. All he could promise was that the government would regulate Uber "similar to what the taxis have to go through already".
In cities where Uber already operates, consumers have flocked to the app-based service in large numbers, lured by the ease and rapidity with which a ride can be ordered, the cheapness of the fares (compared with traditional cab charges), the ease of payment, and the cheery and polite drivers. The vexed issue for traditional cabbies is that their fixed costs – comprising taxi licences, booking network charges, public liability insurance, vehicle checks, driver security checks, and so on – are high. But a tight regulatory framework has restricted new entrants to the industry, allowing existing operators to demand, and receive high fares. With the old taxi model about to be overtaken by progress, and business suffering as a result of public service cuts, it's easy to see why Canberra cab drivers fear Uber's arrival.
Laying a heavy regulatory hand on Uber in Australia, even trying to ban it as administrators and governments have sought to do elsewhere, would be a futile and pointless strategy at this point. Uber's readiness to take on its opponents by legal means, through advertising, and by rallying support through social media, has proved highly effective.
To its credit, the ACT government seems to recognise that Uber will deliver efficiencies and savings to consumers and that, accordingly, it should be accommodated rather than resisted. Enabling this, however, could involve tough decision-making. Compelling Uber drivers to undergo police checks and medicals or even to obtain a new class of licence should not be difficult proposition. Third party insurance, however (currently around $9500 a year for licensed cabs), will be a tougher nut to crack. If it's judged not to have sufficiently evened up the playing field, the government may also face calls from licence holders for compensation.
The government may have benefited financially from taxi licence fees and quotas, but any sense of obligation to compensate existing operators should be resisted. Business models the world over have or are being disrupted by technological change. It's not government's role to pick winners, nor to compensate a privileged few. Just as the Luddites learned that you cannot put a brake on progress, so the taxi industry should prepare for change.
