Taxis and hire cars declare war on Uber

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By Leith van Onselen

The fight against Uber’s ridesharing service, Uber-X, is getting ugly, with taxi and hire car companies resorting to making citizens’ arrests against drivers illegally carrying passengers. From The SMH:

Hire car owner Russell Howarth has now carried out multiple arrests of uberX drivers, and other drivers are attempting to mobilise in various ways against what they see as an existential threat to their pay and conditions…

The incident demonstrates the volatility of situations where the incumbent industry attempts to turn the tables on its upstart competitor…

Anger within the industry is growing. On the messaging app “Telegram” a community of 170 members are discussing ways to fight back against Uber. “My suggestion is throwing eggs at all uberX,” one driver said on Saturday. “If every cabbies carry two eggs on their shift and whenever we see them throw it”…

“There’s a huge amount of anger,” said the president of the Australian Taxi Driver Association, Michael Jools.

“You have all these guys ready to take up arms – almost in a literal sense,” Mr Jools said…

The company says that each Uber trip is covered by its $US5 million ($5.8 million) contingency liability cover in addition to each driver’s own full insurance policies

Talk about a farce. The only reason why Uber-X is popular at all is because it offers better service than the incumbent taxi and hire car industry at lower prices. Seriously, if someone wants to save money and use Uber-X, and the driver is licenced and has the requisite insurance, then why should government policy stop it?

As I keep saying, the net result from Uber (and ridesharing services more generally) should be more reliable and more affordable transport options for consumers, a more efficient utilisation of the transport fleet, and better pay for drivers currently caught in taxi licence holders’ monopolist net.

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Ultimately, if an idea is a good one – and Uber’s most certainly is – it won’t just quietly disappear. Technology will eventually win the day, just as the invention of the personal motor car won the battle against the horse-and-cart and railway industries, which also lobbied governments to erect all kinds of barriers aimed at preventing their operation.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.