Arresting Uber execs doesn't solve France's problem with digital disruption
- Summary:
- Rioting French taxi drivers won't put the digital disruption of Uber back in its box, no matter how many executives the police arrest.
So how do you deal with digital disruption that you perceive as a threat? Well, if you’re a French taxi driver, you resort to overturning and burning cars and blocking main routes to and from the airport.
And if you’re the French authorities witnessing rampant acts of vandalism and criminal damage against a particular firm, what do you do? Well, you arrest the heads of the company that’s being attacked, of course.
Following last week’s outbreak of civil disobedience by registered taxi drivers in Paris, the French police have now arrested the heads of Uber’s European and French operations.
Pierre-Dimitri Gore-Coty, director general of Uber in Europe, and Thibaud Simphal, director-general of Uber in France being held in custody and questioned as part of a seven-month investigation into Uber in France, which has been declared illegal by French courts and by the French government.
An Uber statement said :
We are always happy to answer questions the authorities have about our service and look forward to resolving these issues. Those discussions are ongoing. In the meantime, we're continuing to ensure the safety of our riders and drivers in France given last week's disturbances.
Uber has said that it will continue operations in France until a court rules against its UberPOP service. This has been illegal since late last year, but enforcing that has been problematic, with the New York Times alleging that Uber is simply paying off any fines imposed on drivers.
In March, the Cour d’Appel de Paris agreed that Uber had raised substantial issues about the legality of the ban and said that the highest appeals court needed to make a decision. That gave Uber a stay of execution. Meanwhile for its part Uber has filed complaints with the European Commission against France, Germany and Spain for trying to shut it down.
Whatever the final result turns out to be, tensions last Thursday spilled over into violence. The most famous victim of the trouble was rock star Courtney Love who took to Twitter to inform the world that her car was smashed up and her driver 'taken hostage' after she was caught up in the violence, asking:
This is France?? I'm safer in Baghdad.
The scenes in Paris inevitably sparked a lot of French Revolution comments, although many have chosen to compare the reaction of the cab drivers to those of the Luddite movement in the North of England during the Industrial Revolution, when bands of workers attacked and burned new mechanised forms of production.
That was certainly the angle taken by Om Malik in The New Yorker:UberPop (known as UberX in the United States) is, in its own app-based way, akin to the arrival of large knitting machines manned by unskilled labor, threatening the livelihoods of a certain class of workers. It took only five years for what once seemed like a fuzzy idea—limos on demand—to become the source of riots in the streets.
It was skilled workers raging against the influx of unskilled labor.
Actually a more interesting interpretation was provided by Michael Hiltzik in the LA Times, who wrote:
Unlike the Luddites, cabbies aren't protesting the influx of unskilled labor, since the skills of a cab driver and an Uber driver aren't dissimilar; what they're protesting is the influx of unregulated labor. Uber drivers and their vehicles don't have to meet the standards imposed on taxi services by local authorities. Some of these are aimed at health and safety of drivers and passengers, and some were designed to cap the supply of taxis, thereby placing a floor under drivers' income.
Also caught up in the chaos last week was Gartner analyst Mark Raskino, supposedly making an easy day trip from London to Paris and back. Instead his day descended into complicated re-planning and re-scheduling. Raskino’s observations on the riots are worth a read, making the very sensible point that digital disruption in a market sector is often assisted by incumbent providers who rest on their laurels:
People react strongly when they fear their livelihood is being suddenly threatened and they can’t see an alternative. Uber is causing great change to the way cars and drivers are provided, in cities all over the world. Its methods are fast paced and market disruptive – deliberately so. But such transitions don’t have to be so sharp and antagonistic. It takes an acquiescent set of incumbents to let a disrupter start to run amok in a sector. Markets and workforces can adjust to change much more smoothly and with less pain, if there is progressive planning. That requires existing market leaders act with timeliness and forethought on new technology opportunities – rather than dragging their heels all the way.
Taxi operators in many major cities have dawdled over the last 5 years, when presented with the opportunity to embrace the possibilities of smartphone technology. Experiments have often been only halfheartedly supported. But consumers want convenience, so they will quickly gravitate to the power of location based services and easy payment solutions. Regulators have often been slow to adjust, or to review and act to control new entrant models. Digital change inaction has been a root problem.
In our modern societies, customers quickly vote for new and better – with their feet, clicks, or touch screen prods. So the cost of sleepy digital inaction, could be major damaging labor disputes in your industry too. Because as we have said before every industry will be digitally remastered. The products and services of your industry will be transformed. If you don’t make it happen – the gap will grow and someone will step in to disrupt it. However, if you act now to start the transition in a smooth and orderly way, your customers and your staff will have the few years they need to adjust with grace. As with all industrial progress – in the end we get better products and services that everyone enjoys – and usually, better jobs too. It is a choice whether we get there by strife, or by strategy.
My take
The great irony here of course is that it was in Paris that Uber was born, when founders Travis Kalanick and Garrett Camp couldn’t find a cab trying to get back to their hotel from Le Web conference.
There have been protests against Uber in other cities of course. Anyone trying to get through London during the most recent rally by the black cab drivers there was on a hiding to nothing, but there was at least no violence. The scenes in Paris were a disgrace from that point of view and the lack of more forthright condemnation from the French government is notable and regrettable.
Speaking at the EU summit in Brussels the day after the violence, President Francois Hollande backed the registered taxi drivers:
Non-compliance with tax and competition rules is illegal. UberPop should be dissolved and branded illegal and cars should be seized.
It’s unfair competition, he complained - which is an entirely predictable response from a left-wing leader of a government that revels in regulation and protectionist legislation.
I’m no Uber fan - plenty of evidence of that to be found - and I’ve never yet set foot in an Uber cab. But I really can’t argue with Uber’s response:
There are people who are willing to do anything to stop any competition. We are only the symptom of a badly organised market.