Tyler Cowen writes in Bloomberg:
The new Britain appears to be a nationalistic, job-protecting, quasi-mercantilist entity, as evidenced by the desire to preserve the work and pay of London’s traditional cabbies. That’s hardly the right signal to send to a world considering new trade deals or possibly foreign investment in the U.K. Uber, of course, is an American company, and it did sink capital into setting up in London — and its reputational capital is on the line in what is still Europe’s most economically important city. This kind of slap in the face won’t exactly encourage other market entrants, including in the dynamic tech sector that London so desperately seeking.
Cowen argues that the ban on Uber in London shows that post-Brexit Britain is likely to be more heavily regulated than people might think. I’m not convinced.
1. TfL’s ‘ban’ isn’t on Uber-like ride-hailing services, it’s against Uber itself. Other ride-hailing services, such as Gett, myTaxi, Kabbee and Addison Lee already operate in London.
2. Unlike countries such as Denmark, which de-facto banned ride-hailing services by introducing a law requiring mandatory fare meters and seat sensors, London has explicitly amended its regulatory structure to accommodate ride-hailing.
3. This regulation, far from being onerous and bureaucratic, actually delegates responsibility for setting fares, conducting background checks and managing safety, to the platform itself.
4. TfL’s ruling calls out Uber’s use of controversial “Greyball technology,” specifically designed to thwart sting operations by regulators.
Uber has a chance to reapply for its license. Let’s see if it’s willing to clean up its act.