Anyone who uses public transport and owns a smart phone should be familiar with an application called Uber. Uber is a revolutionary form of taxi service. Basically, you log in and enter your location and intended destination. From there, you can view the amount it would cost you for the ride (calculated via GPS and some servers) and how many passengers the car would carry. The fare is normally contingent of a number of events for example traffic and weather.

If you have used Uber, you will also know that it is the most convenient application since sliced bread. It’s fast, convenient, and the taxi drivers are friendly (you can even leave reviews of your drivers). Thus, Uber has spread like wildfire to over 60 countries in the world. But recently Uber has run into a series of legal problems in London and other major cities of the world.

TFLIn London there are several forms of public service vehicles. They are regulated by the Transport in London (TFL).There include black cabs, Licensed Private Hire Vehicles and Minicabs. All these must be registered and licensed by the TFL. Black cabs are the most common, and they are allowed to pick up passengers off the street. They also have a minimum charge of £2.40 (about KSH 375 at the current exchange rate). These fares are metered and also regulated by TFL. It is not clear why TFL themselves meter the fares, but it could be to ensure there is no undercutting in the business.
Minicabs must also be registered and licensed by TFL. It is illegal to use unregistered minicabs. This is for the safety of the clients; a record of the journey is also kept in case of any eventualities that may arise.

The issue before the court is whether the app Uber breaks the law by acting as a meter. Black cab drivers argue that by the fact of calculating fare price, it is acting as a meter, and is therefore illegal. The safety of the clients cannot be guaranteed in the same way as it is by the licensed operators. Lastly, fare price is unpredictable and could change easily and without much notice.

I honestly think this is a minute issue that can be resolved by people sitting down and talking, perhaps with an arbitrator. However, the High Court in London has to decide on this matter.
taxi_2053243cTaxi business is run in a cartel-like manner – albeit legal ‘cartels’. Innovation, which is at the core of technology, is a distorter. It distorts systems that are working, but mostly it is to make life more efficient. Uber came in to distort taxi systems in the world and made taxi service more efficient. The same is true of AirBnB, which has distorted the hospitality industry. Online shopping has also distorted conventional shopping.

For Uber, the existing taxi business and governments are fighting back. Uber are confident that it will wriggle itself out the various legal problems it faces. In fact, Uber executives insist that the problems are only fuelling an increase in the number of downloads the app is getting. However, it remains to be seen whether this company can innovate itself out of the legal hurdles it faces, and whether it can change it model so as to adapt to the rules and regulations of the diverse countries it seeks to operate in.

Article by Sammy Kedirah