THE licensed-taxi system can be a racket. Many cities suppress the number of permits they hand out, guaranteeing that the system favours drivers, not their poor passengers. For proof that demand can be deliberately kept well short of supply, consider New York City. In 2014, the badges that are required to operate a yellow taxi there were selling for over $1m each. Anyone trying in vain to find a taxi on a rainy morning in Manhattan could easily tell you the market was loaded against the customer.
In much of the world, that model has been disrupted. New firms such as Uber are successful because they are determinedly on the side of the customer. Hailing a car on a ride-sharing app is cheap, convenient and reliable. Which is why taxi drivers hate it.
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Big cities across the world, from London to Hong Kong, have witnessed protests by cabbies, often backed by their powerful unions, trying to protect their cosy cartel. Luckily for passengers they have mostly failed. Since Uber has made inroads in cities like New York, the premium on taxi badges has plummeted (as has the number of sodden people waiting for a ride). When Gulliver last visited New York, and a yellow taxi to the airport failed to materialise, a hastily booked Uber arrived in minutes.
Unfortunately, the app is still forbidden in some countries. Recently, your blogger flew to Spain, one such laggard. Touching down in Barcelona after midnight, Gulliver had already braced himself for the lengthy queue that would await, given the lack of competition to the taxi rank. (He would normally take the bus, even at that hour, but happened to be staying a some distance from the centre of town.) In fact he had severely underestimated the horror. Outside the airport he found a line snaking perhaps 150 metres around the terminal building (snapshot above). Is there a more depressing sight at 1.30 in the morning?
Uber says Spain is the only large country in Europe in which it is not to allow operate. In 2014, a judge ruled that the firm represented unfair competition for taxi drivers. Uber has spent its time since trying to move back into Barcelona and other cities. Taxi drivers, naturally keen on long queues for their service, are once again resisting.
Talk to the locals, and many pine for change. In any case, the arrival of Uber in a city can have a more profound effect than just making everyday life easier or increasing productivity, as people spend less time searching for a ride. A recent paper by Carl Benedikt Frey of Oxford University found that the when Uber sets up shop in an American town, taxi drivers’ earnings fall by 10%, compared with those places where it is absent. But while the overall number of licenced taxi drivers did not seem to be affected, the number of self-employed drivers rose by an estimated 50%.
Life for those extra drivers can certainly be harder than for those with a taxi licence. (On March 1st, Travis Kalanick, Uber’s boss, was moved to apologise after a video was posted of him telling one of the firm’s drivers, who had complained about low fares, “Some people don’t like to take responsibility…They blame everything in their life on somebody else. Good luck!”.) Undoubtedly, some drivers are disatisfied with their lot. But many others seem to appreciate the freedom that working whenever and wherever they like brings.
They could certainly do with them in Spain. Gulliver was in the Catalan capital to attend the Mobile World Congress, a convention that buzzes with the energy of 100,000 people all trying to harness mobile technology to drive the world forward. Standing in an endless queue outside Barcelona airport, that irony was not lost on him.