This isn’t about about why taxis are terrible and Uber is great, it is about how the consumer is king even in France and how real innovation takes off just as quickly here as it does elsewhere.
Let me explain. The Paris taxi industry has for a long time been protected cash cow, lovingly tended by one large organization making millions every year out of the status quo.
To anyone armed with a little spare time and the internet, it’s easy to find out why the taxi monopoly in Paris has lasted so long. “Friends in high places” doesn’t even come close to describing it.
Before Uber et al however, the reality was that whatever consumers thought of the system, they were forced to accept it. Tourists complained, Parisians screamed and yet no transmission mechanism existed to translate the will of the consumer into meaningful change.
The system had been created by the administrators, in the finest traditions of the dirigiste state. No amount of complaining could break that rigid system. The taxi industry isn’t unique in this respect, but it is almost uniquely symbolic of the potential for change which unexpected innovation can bring.
Protected by the system, no amount of consumer pressure could bring about improvements. There was a disconnect in the mechanics of the market.
Uber arrived quickly and introduced a transmission into the machine where none existed previously. To continue the metaphor, consumer power was suddenly transformed into something which could spin the wheels of change; and spin them it did.
As the smoke settles from this flurry of burning rubber, taxis are suddenly roaming the streets looking for fares. Taxi ranks which lay unused for decades have suddenly filled up with cabs. Taxi drivers are being forced to work as, shock horror, taxi drivers, rather than prepaid minicab drivers like they were before.
Uber etc has now won, and guess what? Paris is the better for it. Why? Well here is the part that the taxi drivers (and many others) never understood . Talk to a Paris taxi driver and he’ll often refer to “the pie” (in French, le gateau) . The pie is the whole market as he sees it. There is enough pie for everyone he’ll say, I just want my “fair share”.
An admirable sense of fairness which alas doesn’t extend to declaring earnings, a point which when pointed out led to some unpleasant on-board exchanges. Solidarité is not a one-way street. Taxi drivers have never grasped the irony of getting a rebate on fuel via their tax return, whilst at the same time ensuring that they declare as little as they can on the very same form.
This notion of the pie as being some sort of fixed amount to be shared out is the fallacy which Uber et al have proved. As the price has fallen, demand has increased, supply has gone up and quality improved, suddenly this pie is getting much bigger.
People are using Uber more often than they used taxis. They are spending more because it is enjoyable to do so. Uber isn’t only eating the taxi drivers’ pie, it is bringing its own pie to the table.
There will be more pie for everyone now that competition has increased. Consumers will spend more, jobs are created and all because people are allowed to act selfishly and get home cheaply and conveniently.
This improvement in the taxi service is better for the planet (less private cars), better for tourism, better for business as people no longer rush for the last metro. It is quite simply better all round.
It hasn’t been the end of civilization as we know it, it has simply been the French consumer exercising his or her right to profit from innovation. Given the chance, consumers in France are no different to consumers elsewhere. They might not have as much money in their pockets but given the chance to increase their pleasure they act in the way of consumers everywhere.
Seeing the taxi monopoly swept away so quickly has reinvigorated my belief that the potential for France in the immediate future is very bright indeed. There are many other sacred cows to be faced down.
The Loi Macron has taken some baby steps in the right direction, but if the case of Uber teaches us one thing it is that the French state doesn’t need to rely on political posturing and headline grabbing law changes.
French consumers love affair with Uber succeeded where years of reports and proposals failed. The Attali report in 2008 prescribed a liberalization of the taxi industry in France, and the newly elected government of the day could hardly move fast enough to reassure their friends that no shake up of the taxi industry was going to happen on their watch.
It might feel counter-intuitive to the current and indeed future governments to leave things to the market, I appeal to them to make “Laissez-faire” a pillar of their policy .
Trust the French consumer to follow his instincts, trust French entrepreneurs to give those consumers what they need.
Time wasted in recent years on micro managing the taxi question could have been better spent on tackling the big issues which the government faces today more than ever. Don’t be fooled when people decry this as “Uberisation” and tell you to be afraid of what happens next. This isn’t “Uberisation” this is progress, and France has nothing to fear.
Martin Dixon is a director of the FBCCI writing in a personal capacity. Click here for a full version of this blog.
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