Treating Uber as a taxi service levels the playing field for traditional taxi services
Though Uber’s Argument that it is a virtual taxi-stand—the aggregator says it is a platform linking passengers with cabs—may sound logical, this made for a hard-to-resolve regulatory dilemma. Uber-linked taxis compete with traditional taxi services, but are not subject to the same rules as the latter in most jurisdictions. Uber has made money—as have the taxi-car owners and drivers using its service—in this grey zone, where many rules, from price-caps & floors to fleet-size requirements and taxi-service licences, don’t apply to it. To be sure, some jurisdictions have tried to regulate it—Delhi and Karnataka have introduced some form of fare regulation for cab-aggregator apps. But that doesn’t have the same rigour as the regulation that applies to radio-cabs or even city taxis. Against such a backdrop, the European Union’s top court ruling that Uber should be regulated as a taxi-company should offer some clarity to jurisdictions around the world that don’t want to crimp an Uber’s disruptive potential, but also don’t want that realised at the cost of traditional taxi services.
It is true that new-age businesses make business-operations more efficient and even unlock areas of business that had not been explored so far—Airbnb, for instance, makes lets home-owners rent out idle space in their homes. At the same time, many of these also exist in regulatory grey zones, which may, in some cases, be the reason why they are more efficient than traditional businesses in the space, or attract more customers. For example, if e-tail were to be treated on a par with retail in many jurisdictions, it wouldn’t be able to offer the same discounts, the same low-/no-cost delivery, etc. Regulatory gaps hobble traditional businesses as much as they give new-age ones a chance to thrive. The solution therefore is to subject both, an Uber and a radio/city taxi to the same set of rules—either ease rules for everybody or net those that are currently outside regulation’s ambit.