Nick Ferrari on the Mayor’s Uber decision
Policy Exchange can claim some credit – perhaps not the right word – for Sadiq Khan’s stunning decision to end Uber’s operations in London last week.
It was a Policy Exchange pamphlet of mine, published last year, that first suggested that the mayor and Transport for London could use Uber’s need to have its operating licence renewed as a way of getting it to behave better.
We did not, I stress, say that Uber should be taken off the road. We said it should have a new licence, on condition that it addressed some of the well-founded public interest concerns about its operations.
We said that it should become UK-based for corporation tax and VAT, to ensure that it pays its share towards the taxpayer-funded roads on which it entirely depends. We said that it should agree to impose a daily 12-hour limit on its drivers’ hours, as it already does in New York, to address concerns about its safety.
We disappointed some black cabbies by saying that they, too, must change to out-compete Uber, not just demand that someone else makes the competition go away. I wrote: “There’s a place for Uber in London – a big one. It has expanded the market and brought taxis within more people’s reach. Even if we could get rid of them – and we can’t – that is not what Londoners want.”
It turns out, however, that you can get rid of them – or at least that Sadiq wants us to think so. Taken at face value, revoking Uber’s licence is not just wrong in principle. As many others have said, it sends the wrong signal, at the worst possible time, about London’s openness to business and innovation.
It could also be bad politics for the Mayor. Of course all the paperwork will have TfL’s name on it, but no-one really doubts this was his decision. He was on TV, taking ownership, within about five minutes of it being announced, obviously expecting a round of applause at Labour conference the next day. I’m not sure he expected the size of the backlash.
This is one of those issues that has got through to people. For many, Uber is an affordable luxury, even a badge of identity. It created hugely animated discussion in my office, and probably in every office with people under 40. It’s a fascinating test of how left-wing London really is. Suddenly, metropolitan progressives who spend their lives bloviating on Twitter against tax-dodging companies and zero-hour contracts have got angry that their personal convenience is at risk.
Sadiq may have created an issue that dramatises how red tape can affect people’s own lives. He may have done something that could rescue the Tories among two of their weakest groups, young people and Londoners.
His action might also be bad tactics. The struggle for control between Big Tech and democratic government will be one of the defining battles of the next 20 years. It is vital that government wins; that our lives are decided by laws and democratic elections, not by the denizens of Silicon Valley.
The mayor, knowingly or otherwise, has launched perhaps the biggest salvo yet in that struggle – but on relatively weak grounds and against a company with a big public following. If Uber forces a political backdown, or wins in court, the company could actually end up stronger than before.
Having said all that, perhaps we shouldn’t take this action at face value. Perhaps it was a negotiating tactic. And if it wasn’t, it should quickly become one. There is clearly a negotiation to be had – one which can lead to the right outcome on all sides.
Yesterday, both sides sounded like they could be in talking mood. Tom Elvidge, Uber’s London general manager, observed to the media: “We’d like to know what we can do… to sit down and work together to make this right.”
TfL sources responded, according to the newspaper, by saying that talks were possible – and Khan himself said: “I want to be absolutely clear that there is a place in London for all private hire companies that play by the rules… I suspect it will take some time before this situation with Uber fully plays out.”
I believe, of course, in competition. But it needs to be fair competition. Uber has a huge advantage over its competitors. Unlike them, it pays very little tax – £411,000 on turnover of £23 million in 2015, and no VAT at all. And effective competition also requires respect for the rules and the regulators. Uber’s treatment of both has often been disrespectful.
Uber needs to make a serious, substantive offer – on limiting drivers’ hours for safety, on dealing honestly with the regulator and the public, and on paying the taxes it should. In return, Khan and TfL could say: we’ve given you a fright, we’ve reminded you who is in charge in this country, and we’ve brought you into line. It would be a victory for everyone.
Our original recommendation – that the licence should be renewed, but on these strict conditions and for shorter periods to ensure compliance – remains the right one. It is still the best outcome for all sides.