Uber Is About to Face a Landmark Battle in Europe (fortune.com)

In a case which could affect other app-based startups, Uber will seek to convince Europe's top court next week that it is a digital service, not a transport company. The outcome could determine whether app-based startups should be exempt from strict laws meant for regular companies. From a report on Fortune:The European Commission is trying to boost e-commerce, a sector where the EU lags behind Asia and the United States, to drive economic growth and create jobs. The U.S. taxi app, which launched in Europe five years ago, has faced fierce opposition from regular taxi companies and some local authorities, who fear it creates unfair competition because it is not bound by strict local licensing and safety rules. Supporters however say rigid regulatory obligations protect incumbents and hinder the entry of digital startups which offer looser work arrangements to workers in the 28-country European Union looking for more flexibility, albeit without basic rights.

Comments

Re:Government is overweening when

[Anonymous Coward]

Government LUDDITES STOMP on app appers who make apps! The overweening government can't app apps. Only the app appers can app apps!

Apps!

We'll all be "contractors" soon.

[Anonymous Coward]

Supporters however say rigid regulatory obligations protect incumbents and hinder the entry of digital startups which offer looser work arrangements to workers in the 28-country European Union looking for more flexibility, albeit without basic rights.

See, these folks are spinning it as an opportunity for folks - "be your own boss!", "Be an entrepreneur!", etc ....

But they still rule your work. You still take on the business risk but aren't compensated for it. That's the trend - to push market and other business risks onto the worker - as well as the tax liability and hassle - and not compensating the worker for it.

A 25% commission and booking fee on top of that is way too steep for what they (Uber) do. They have no risk and very little expense while the drivers deal with the headaches of owning the capital equipment and taxes and whatnot. It's great that by becoming an Uber driver, you can skate around taxi regulations, but never the less, it's a bad deal. Uber just supplies an app and a payment system (BFD), but the drivers are the ones who are supplying the real service and capital equipment. I

Re:We'll all be "contractors" soon.

[mrclevesque]

"A 25% commission and booking fee on top of that is way too steep for what they (Uber) do."

right, and some even call it the 'sharing economy'.

Re:We'll all be "contractors" soon.

[GuB-42]

But it is a "sharing economy".
Drivers share their income with Uber.

Um... so what?

[rsilvergun]

these laws and regulations exist for a reason, and it's not to put a stop to everybody's fun. It's because people were being abused.

If you let people ignore laws because you're changing nomenclature then there is no law. If it looks like a duck and quacks like a duck, it's a duck.

Re:Um... so what?

[BasilBrush]

There's a reasonable argument that there's a right number of Taxis. Too few and people don't get a proper service. Too many and there's congestion. Too many empty taxis waiting round.

Free marketers would say that the market would find the right level. But that's religion, not reality. A free market finds A level, not necessarily the right level. A free market would normally end up with too many taxis, and poverty wages as they all compete for few jobs at low rates. You can see that happening in parts of the world where they are not regulated.

With regulation, you make sure there aren't too many taxis by limiting the badges. And you make sure there are not too few, by setting what the rates are.

Having said that I think the app based model offers a lot of advantages. But they should be accepted within the regulated system, not operate outside of it.

Re:Um... so what?

[fluffernutter]

Listen I know with Trump and everything equality seems to be going out of style, but it is a pretty shitty society that turns their backs on that 2%. In fact that is pretty much the gold standard of how well a society treats its members. And anyway if you count all the people who may be raped or attached in some other way it is far higher than 2%.

Re:Um... so what?

[psmoot]

There's a reasonable argument that there's a right number of Taxis.

No, I don't think there is. The number is very fluid. It changes from minute to minute and from location to location, and from person to person. I personally have no idea how you'd go about figuring it out. I don't even know how you'd decide one value is better than another because that's a judgement call, not an objective fact.

Free marketers would say that the market would find the right level. But that's religion, not reality. A free market finds A level, not necessarily the right level.

It's not religion any more than believing a wise and well informed third party can deduce the right value.

Somehow we need to come up with the number of available taxis right now. I'm a rabid free marketer, just so you know my biases. I have no idea how many people need rides right now, how congested the streets are, how many drivers have cars and nothing to do, how much money they'd need to give up their next best alternative. It's a really, really complicated problem and I think it's uncomputable. There's no way a taxi commission or taxi company can come up with a single "right" number of taxis.

Even assuming you were omniscient and could measure everything, you'd still have to make a subjective judgement. I may be a cheapskate who doesn't mind congestion. You might be Daddy Warbucks who really likes being whisked through deserted streets. The guy reading this post might be Scrooge McDuck who likes crowded streets because it screams "profit opportunity". Who gets to make the call and why should be believe him or her?

Regarding poverty wages, I think it's a little arrogant to say what wages someone should be allowed to accept. I don't think many ride sharing drivers do that as their only source of income. Many people (I'd believe most but I can't prove it) drive around a bit to get a little extra spending cash. Do you really think you know their circumstances so well that you can confidently say it's not worth their time? How can you possibly know that?

Regarding congestion, how about we wait for that to be a problem before we act? My inclination is every ride sharing car probably reduces congestion and at least they don't drive around aimlessly looking for rides like traditional taxis do. Fun fact, a UCLA professor did a study of traffic in Westwood (I think) where they found most of the city street level congestion was people circling the block looking for parking. Just sayin'.

Re:Um... so what?

[roman_mir]

and it's not to put a stop to everybody's fun. It's because people were being abused.

- no, that's irrelevant, it's not because 'people were abused', many people are abused in many ways and this includes abuse by government. This is because governments are made of politicians that buy power from the mob with giving out promises and 'free' stuff. Governments should not be regulating any businesses at all for any purpose. There shouldn't be any income or property related taxes either. Government should only spend what they can get in taxes and shouldn't run deficits. Governments should scale down with every economic downturn and not choose winners and losers, not print money, not manipulate markets and interest rates, not destroy individual freedoms. Yet they do all of that and people are constantly surprised at the economic disasters that follow.

Re:Um... so what?

[Half-pint HAL]

You need to call a taxi... but not if ride-shares (so called) have put them out of business.

The reason you can't use a phone to order an Uber, is because in many jurisdictions, that is illegal. Once the taxis are out of business, those laws can be repealed.

That doesn't guarantee it will happen though. Running phone lines is expensive, and that eats into profit. Uber's business model is one of cherry-picking profitable business, not of getting full coverage; whereas one of the main points about regulated taxi and private hire car services is that you can mandate that a license holder has to cater for different classes of passenger. That means that a medium-to-large taxi firm must have a certain percentage of accessible vehicles, and now practically all black cabs bought new will have ramps and straps for wheelchair access and securing the wheelchair once in the vehicle, because it makes economic sense. Game theory used to mean that the possibility of a few extra fares made accessible features of no economic value. Now, the absence of them has regulatory implications as well as the possibility of marginal lost trade, so "better to be safe than sorry" meant that the features gained economy of scale, and now a disabled person in a city like London or Edinburgh can hail a cab like the rest of us, and 99% of taxis will be able to stop and pick them up.

All these people who think that regulation is a bad thing should have a look at why regulation was invented in the first place. It was made to protect the public, and if in some cases that has been corrupted by vested corporate interests, the solution is to deal with those interests, not to remove consumer protections completely.

Duh

[Locke2005]

Just because you organize your taxi service over the internet doesn't mean your exempt for all other laws, regulations, or requirements for a taxi service. This applies to every other dot com whose business model is basically "Do a business that has been around for decades, but using the internet!" AirBNB? You need to follow the same rules as any other room rental agency. Amazon? People buying things over the internet still need to pay sales tax. Backpage.com? Soliciting prostitution is still soliciting prostitution.

Re:Duh

[PvtVoid]

Just because you organize your taxi service over the internet doesn't mean your exempt for all other laws, regulations, or requirements for a taxi service. This applies to every other dot com whose business model is basically "Do a business that has been around for decades, but using the internet!" AirBNB? You need to follow the same rules as any other room rental agency. Amazon? People buying things over the internet still need to pay sales tax. Backpage.com? Soliciting prostitution is still soliciting prostitution.

Didn't you get the memo? We're in a post-reality world now.

Re:If this is the case, beward companies.

[tlhIngan]

Ebay will be called an auction place and have to abide by rules in every town.
Paypal will be called a bank and have to obey laws.
Every tech company figures they're semi avoiding laws at least cuz it is new. The motto in tech ask for forgiveness, not ask for permission. If you limit yourself, you might not ever have a good idea to make billions. I've had many ideas that turned into multimillion or multibillion dollar companies, but I didn't do them myself because I didn't have a crew to do them with. It doesn't bother me, but just reassuring that my ideas are good.

eBay is an auction site and the sellers and buyers do have to abide by local laws. Like in Germany, eBay has had to remove Nazi stuff listed for sale, because it is illegal to sell those in Germany. eBay has also had to remove listings because they've violated laws.

Paypal IS actually a bank in the EU.

Anyhow, if the EU wants more e-commerce, why not start with something straightforward like selling of merchandise? Or even working on copyright and IP laws which would allow the sale of music, tv shows and movies throughout the EU without being country specific? That would seem to be the low-hanging fruit blocking EU-wide e-commerce.

Going after someone like Uber is going to be hard. Because there are some laws you want them to follow (e.g., non-discrimination). And depending on the country, if a taxi driver doesn't want to carry a fare that's hired them, they're forced to call another taxi AND THEN wait with the fare until the replacement taxi arrives. (This is so the refusing taxi can't go and get someone more lucrative in the meantime, as well as if it's bad weather, the fare doesn't have to wait in the weather).

I'm not arguing that at all

[rsilvergun]

nice straw man, btw. What part of Uber is a ride share service? Uber is actively seeking drivers with the same techniques companies use to find employees. They're also treating those drivers exactly like employees. Crucially by controlling how much they charge and punishing them for refusing low paying rides. There are other ways though.

If they're going to treat people like employees when it's to their advantage they're also going to treat them like employees when it's to the drivers advantage. People literally died for those protections. In China and South America they're still dying. WTF is wrong with you that you'd turn a blind eye to that?

What about prostitution?

[mea2214]

If I start up a service to connect Johns with women who are willing to serve them for money can I claim this as a "digital service" and not an escort company?

They lie

[aepervius]

" Supporters however say rigid regulatory obligations protect incumbents and hinder the entry of digital startups which offer looser work arrangements to workers". I can't speak for all countries, but the requirement to be a taxi driver in germany is : 1) have a commercial insurance on the car 2) pass a governemental driving license exam 3) have "measured" counter for range counting to make sure the client is not ripped off 4) agree to have a minimum number of taxi at train station for people to easily get one and rule making so you can't refuse a course based on distance. Nothing in that protect incubent and hinder digital startup. They jsut do not want to respect the law because it cost money, whereas taking any joe blow from the street and pushing all risk on the client and driver cost nothing. They just want to cream up the thing without the cost.

Re:If this is the case, beward companies.

[mjwx]

Ebay - Point out which laws and regulations they've violated? Ebay isn't a holding company like Sotheby's, it's more like a swap meet. Ebay do not in any way handle, represent or sell the merchandise, only facilitate the transaction.

Paypal - Already done. Many governments have already said they're a bank and have to abide by banking rules.

Uber isn't running a new form of disruptive technology. They're running an old fashioned black market cab company. This may be legal in some areas (I.E. in the UK) but that doesn't mean they get to ignore local laws. If I started a brothel and called it "body sharing" and only took bookings via an app, I don't get to skirt laws on the sex trade or operate where the sex trade is illegal. Same as if I started selling beer on a street corner and called it "beverage sharing", I cant use an app to get around the fact I'm operating an unlicensed bar.

Besides this, with the rate Uber is losing money they wont be around much longer anyway.