Alberto Mingardi  

Will the EU help Uber?

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The Financial Times reports that the European Commission is planning an in-depth study into the European taxi market, most likely to find a way out to the Uber dead end in which quite a few member-states are finding themselves. Opposition to Uber is, however, more than a European trend: see this useful map.

Taxi regulations are national, whereas the supply of cabs is typically rationed by city governments. The FT explains:

The commission, which received complaints from Uber after some of its services were banned in France and Germany, told the FT it supported the development of new and innovative mobility services.
While services such as Uber should not circumvent national rules, member states have to respect the general principles of EU law such as proportionality, non-discrimination and freedom of establishment, the commission said.

As far as Uber is concerned, I bet the company looks to this development as a promising one. City governments are most likely to be captured by taxi drivers, who typically represent a powerful local interest group. Instead, the EU Commission is quite detached from municipal political battlefields, in which the politicians' tendency to work for the conservation of the status quo and the power of highly concentrated interests will work against Uber. So, for Uber, a super-national regulator is possibly the best option, as of now, to disentangle the regulatory problems it has. Such a regulator is the most likely to consider the evolution of personal transportation dispassionately, instead of playing a game of votes.

Is there a downside? For one thing, though the voice of taxi drivers isn't likely to sound as loud in Brussels as in Milan or Madrid, it would be disingenuous not to think they'll be, somehow, part of the bargain too. The Commission proposes new laws, but the European Parliament should, at a certain point, approve them. European Parlamentarians are, after all, voted by member states' citizens.

Therefore, a European centralized decision over the Uber cars' status may look, on paper, more favorable than the one local authorities would be inclined to make. But it is unlikely to be a "home run" for Uber, since a balance between different interests should be struck. On the other hand, a European almighty intervention may determine a regulatory framework which will be wider (as it will encompass all European member states) but also, almost by definition, more rigid. If the Commission closes the door to some experimentations (say, the UberX service for example), it will take much longer to re-open it, than would be the case if the municipality of Madrid does so. Local governments may look like arch-enemies of Uber as of now, but local legislation can be more permeable to change--even when opposed by entrenched interests--particularly in the face of genuine popular demand.

We'll see how it goes. Business is usually relieved when government comes to the rescue. But there are prices to pay. Uber so far, at least in Europe, identifies by and large with a willingness to open the door to new experiments, to the benefit of consumers. How strong the voice of consumers is usually heard in Brussels is a matter of contention.


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CATEGORIES: Competition




COMMENTS (1 to date)
Pithlord writes:

Quite a tension between libertarian hostility to rent-seeking political log rolling and support for decentralized government.

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