The dispute between licensed taxi drivers and Uber which resulted in protests in London by Black Cab drivers throws up some interesting legal issues. Essentially Uber is using a smartphone application for ordering taxis and calculating variable rate fares based on peak time usage. By using new technology Uber is able to deliver a taxi-style service cheaper than licensed taxis (most of the time) and is challenging the stranglehold licensed taxis have in cities all over Europe. In London the protests centre around the fact that the technology allegedly operates in the same way as taxi meters. As taxi meters are only allowed in Black Cabs the allegation is that Uber is operating in an unlicensed and unregulated way. Hence the Black Cab drivers decided to block Trafalgar Square to bring their argument to the attention of the public.
On one level people will undoubtedly look at the issue and perhaps feel that taxis are over-reacting to new competition which is using technology in an innovative way. The situation is very similar to the plight facing retailers who now have to compete with cheaper on-line providers. However, from a licensing perspective it is important to note that there has always been a distinction between licensed Hackney carriages (taxis) and mini cabs or hire firms. Strictly speaking you cannot simply jump into a mini cab and expect it to operate like a taxi as it will not have requisite insurance and should you be in an accident it is highly likely you will not have cover. That is why mini cabs have to be booked by telephone or on-line.
The licensed taxi trade is effectively arguing that Uber is trying to have the best of both worlds by being booked like a mini cab but calculating fares like a taxi. Oddly this is likely to be just as damaging to mini cab operators as it is taxis.
The strange fact of the argument is that neither side has yet raised competition law as a possible challenge. From Uber’s perspective it could argue that licensed taxi associations are either dominant entities in the cities in which they operate or that the individual taxis have effectively former a cartel. Either way the net effect is to foreclose geographic markets throughout Europe preventing new forms of competition such as Uber. Equally, the taxis could argue that as Uber is the proprietor of new and arguably unique technology it is abusing its dominant position to compete unfairly. Uber will also be relying on a series of co-operation agreements to ensure its technology works and a challenge could be brought against the parties to the agreements to test whether they are anti-competitive.
As the dispute centres around something that is new it may be appropriate for one side or the other to approach the Competition & Markets Authority, given it is less than three months old, to ask whether it has a view on the proposed arrangements. Approaching the CMA may be a slightly more modern way to deal with the dispute rather than barricading the roads around Trafalgar Square.