Uber Told It's A Cab Firm -- Time For The Gig Economy To Grow Up

Uber's been having a pretty tough time of it so far this year -- and today's announcement, by an EU court, that it really is a cab company after all, is just the latest of a series of setbacks.

To be honest, today's EU announcement doesn't change a lot in the UK because it's already regulated as if it were a cab company. The concern for Uber is that the ruling will mean it needs to be regulated in new markets as a cab company, not a tech supplier. The subtle difference is that this opens it to the various rules in different cities across Europe. 

Some new markets may accept Uber, while others may not. Where Uber is licensed as a cab company in the UK, three cities have already turned their backs on the service. The latest was York, but the one that caught all the attention -- and the one that must have hurt the most -- is London. This followed a series of complaints about the service's drivers and the revelation that the app had tried to cover up a massive data breach.

Ultimately, I believe, Uber's big problem is that the black cabs that are an icon of the capital now have all the technology that Uber offers. App users can order a black cab and be advised of the licence plate and the ID number of the driver behind the wheel. So it's just as easy to hail a black cab as it is to order an Uber and you can double check that the driver is the correct person.

Let's not forget that a black cab driver will have been vetted after having passed "the knowledge," whereas Uber's claimed vetting procedures appear to be not up to scratch.

Londoners are being reminded of this tech advance through ads from the Mayor of London's office. As commuters make their way to office parties, the message is out there that the tech features one associates with Uber are available through a black cap app too. This is coming from the Mayor who banned Uber, remember. He's out there paying for ads to remind people to use an app to hail a black cab while Uber prepares its appeal not to have its licence renewed.

The other problem for Uber is, people aren't stupid. The gig economy provides flexibility for the workforce, but in general, it also leaves the taxpayer sharing the risk of an entrepreneur. If work doesn't come in, people have no guaranteed hours or contract of employment, so social security makes up the shortfall.

The ultimate irony with a US tech giant, of course, is that this risk sharing isn't rewarded. Smart accountants have a tendency to funnel off revenue through legal, although morally questionable, tax minimisation measures that often involve overseas tax havens.

People and the authorities they elect don't buy the whole tech platform argument either. If you book taxis through Uber, it's a taxi service. It can't wash its hands of any responsibility in the process beyond linking passengers and drivers, like some anonymous dating service.

My view of Uber hasn't changed -- amazing disruptive technology that has, and will continue to change, taxi hailing forever. But it is technology in the wrong hands that will be snapped up by the established taxi firms, so it stands out less. Then the only thing it's left disrupting is driver vetting and passenger safety.

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