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Elon Musk Versus the Taxi Meter

Therese Raphael writes editorials on European politics and economics for Bloomberg View. She was editorial page editor of the Wall Street Journal Europe.
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The slick, falcon-doored Tesla Model X unveiled last week in California seemed a million miles from the cranky drivers of London's iconic black cabs who brought parts of this city to a standstill. It wasn't just those doors, or the Bond-like "Bioweapon Defense " button or the even more Bond-like 3.2 second run to 60 miles per hour -- 2.8 seconds if you go for the "Ludicrous Mode" extra. The "Auto Presenting" front door (no hands needed) gets closer to the nub. Musk doesn't advertise it, but this vehicle is pretty close to driving itself. 

The driverless revolution puts the Your City-versus-Uber battle being played out around the world in a rather different light. Driverless cars are coming sooner than most people think, and that will inevitably mean driverless taxis. Many of Uber's regulatory and courtroom tussles over whether it is an employer or whether its drivers take enough rest time may soon look pointless. London's cab wars are a case in point. 

QuickTake Driverless Cars

There will no doubt still be a role for regulators, not least where issues of safety are concerned, but the government's job now is to clear the underbrush of regulation.

Sadly, London's regulator doesn't seem up to the challenge. Transport for London has been like a referee at a match where one side is playing English football and the other Australian rules. It can't quite decide what game it's refereeing, or the rules. And it has completely lost sight of what the fans want.

QuickTake The Sharing Economy

TFL unveiled proposals last week include a minimum five-minute wait for a driver, an English-language test and a ban on drivers working for more than one operator. None of these make any sense from a customer perspective, as was clear by the 130,000 signatures Uber has gathered in a petition against TFL's move. They make even less sense in a driverless world.

Uber has said adopting the proposals "would mean an end to the Uber people know and love" while the Institute of Directors, which represents small- and medium-sized businesses in Britain, warned that they "would damage London's reputation as a city which celebrates innovation and embraces change."

The company may not win hearts by declaring itself exempt from existing rules, but the direction of travel has been clear. Between 2009 and 2011, the number of private-hire vehicles (such as minicabs and the cars Uber drivers use) in London increased by only 3 percent. The number has ballooned by 26 percent since 2013 (Uber arrived in the summer of 2012), compared to a mere 1.5 percent increase in the number of black cabs. Nobody questions the appeal to consumers of using phones to find available cars, and being able to climb aboard in under five minutes, knowing how much the ride will cost (a lot less than in a black cab).

Department of Transport

TFL insists that its "overriding concern" is passenger safety, but how the new measures would enhance safety is a mystery. On the contrary, one could argue that making people wait longer in some neighborhoods for a late-night car could be a safety risk.

A more productive area of focus would be scrapping metering regulations that look absurd in the light of current technologies. TFL has asked London's high court to rule on whether Uber's app constitutes a taximeter, as black cabs claim. As a private hire vehicle, Uber can't offer metered travel like black cabs. The real question is, so what? In a sense, any instrument that measures distance and time and charges according to a formula has to be called a meter. But the price transparency Uber offers is a lot better than the meter anxiety that comes with being stuck in traffic and watching the numbers tick higher. Consumers should be able to chose which they prefer. 

It's hard to imagine an Elon Musk world with taxi meters, which means one of them has to go. At the moment, the manufacture, testing, calibration and auditing of taxi meters is governed in excruciating detail by layers of  EU and U.K. law. How meters are labelled, color-coded and sealed (see diagram below) is  set out in detail and overseen by the quaintly named Public Carriage Office.

Transport for London

Complying with these regulations may benefit manufacturers and auditors, but they are a cost for cabbies that gets passed on to consumers. Current metering laws are outmoded and both Uber and the cabbies can benefit from scrapping them. 

The black cabbies and their spacious carriages and proud tradition -- something tourists will no doubt continue to appreciate even in a driverless era -- speak to the heart; but the head is with Uber. A lack of innovation, excess regulation and high costs have left London's black cabs pitifully behind in the game, despite some belated attempts to modernize. As one Twitter user put it last week, evoking the era of the now-extinct videocassette recorder:

"I commend #Blackcab drivers wanting to preserve their living but fear they are on the #Betamax side of the argument."

When cabbies made parts of central London a parking lot last year, Uber was quick to cheer. The Silicon Valley ride-sharing company tallied the cost to the city of the taxi-stoppage at 125 million pounds ($190 million), basked in free publicity and claimed that driver sign-ups rose by 850 percent. The black cabs would do better to focus on innovation.

Smaller operators of licensed vehicles, who have been competing with the black cabs for years, tend to be more philosophical. After decrying the way that "Uber and Google" are destroying the business, Billy Noonan, a manager of a London minicab company who has been in the field for 32 years, admits "I see so many good things about Uber, I'm not stupid. I have kids who use it."

He adds, "You can't stop the future. Driverless cars are here. Things don't take 100 years to change like they used to." 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Therese Raphael at traphael4@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net