Alberto Mingardi  

France seeks liberalizations, but bans Uber

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Mixed signals from France. The Financial Times, among others, has stressed the potential of the liberalisation plan pursued by the new Economy Minister Emmanuel Macron.

The bill aims at lowering barriers to entry in liberal professions--notaries, pharmacists, et cetera. The remnants of the guild system would be weakened by opening liberal profession partnerships to external capital. Sunday opening hours will also be liberalised, albeit timidly: as a rule, shops should remain closed on Sundays, but it will be easier to obtain a waiver, particularly in tourist areas.

All of this may seem trivial to American readers, but it is indeed a significant step forward for France (see here a comment by French think tank IREF), a country well-known for a pervasive hostility towards market mechanisms and economic freedom in general. Monsieur Macron has been credited for this new course, which takes into account the need for creating new growth opportunities--particularly for younger people entering the labour market. France's youth unemployment is 24%.

Interestingly enough, however, France has also just announced that it will ban UberPop (which in the US goes by the name of UberX) starting in January of next year. This in spite of a court decision that allowed Uber to continue to operate in Paris. The spokesman for the Ministry of Interior apparently commented on French TV that

Currently, those who use UberPop are not protected in case of an accident," Mr. Brandet told the French news channel BFM TV, on Monday. "So not only is it illegal to offer the service, but for the consumer, it's a real danger.
These are of course very different arguments: one that UberPop is illegal because the law requires all drivers who chauffeur paying passengers to have a license, and one that deals with the lack of appropriate insurance. But the fact that they are officially made together signals that the pressure on Uber is growing all over Europe.

The rape of a woman in Delhi by an Uber driver has created a window of opportunity to crack down on Uber services, having a good card to play in the public debate. Now, I found a bit bizarre the idea that Uber car drivers are more likely to be rapists than taxi drivers: is rationing the taxi supply enough to drive taxi drivers to be immaculately honest? Of course, local government doesn't issue license plates to people with a criminal record: but my impression is that controls do not go much further than license issue. Nicole Gelinas has a very wise comment, on the issue.

However, in the European debate juxtaposing "Uber" and "rape" might just be working. A sense of anxiety and want for "security" may end up being instrumental in maintaining the status quo.

What is surprising in France is that the ban on Uber comes at a time when the French government aims to convince the world that its approach to competition and markets is changing.

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CATEGORIES: Eurozone crisis

COMMENTS (4 to date)
Hazel Meade writes:

It's not really all that surprising considering the resistance that Uber has received in the US. Europe is simply behind the curve.

Fortunately America has a pretty strong tradition that you can't target specific companies for regulation, so as a result, anyone that wants to target Uber has to go after ALL ridesharing services, and then has to justify why ridesharing services deserve different treatment than taxicabs, and so forth. That's allowed Uber to push back. By contrast, it seems like in France they are much more willing to tolerate arbitrary restrictions aimed at particular companies and accept that as the norm.

Mark Bahner writes:

In 10 years, Uber is in deep trouble due to competition from self-driving cars***, and in 20 years, no one will pay for a human-driven car.

***Unless they go into the self-driving car business. They seem like smart folks, so maybe they'll do that.

Jay writes:

@ Mark Bahner

I think 10 years is a bit optimist. I am not at all confident that the legal/legislative system will work through the liability issues with self-driving cars in double that time let alone the technology being there within 10 years.

Mark Bahner writes:

Hi Jay,

I see higher-end (say, $40,000 and up) cars being computer-driven in 5-10 years.

Elon Musk "90% self-driving" by 2016

A collection of driverless car forecasts

It seems to me that taxi services (and possibly long haul trucking) are the "killer app" for computer-driven vehicles.

Let's say that, 5 years from now, a computer-driven car costs $20,000 more than a comparable version with a human driver. But now consider that a taxi can easily be driven...maybe 17 hours per day (7 am to midnight)? And essentially 365 days per year. And at $15 an hour for the driver...that would be $81,000 a year. So an owner of a taxi company would be very wise to switch at least some cars over to computer-driven as soon as possible.

It's of course hard to say what foolish things legislatures and courts will do. But it seems pretty clear that computer-controlled cars are already safer than the average (often-distracted) human driver.


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