Uber and the Italian Taxi Driver - English

The Battle Against Uber

By Stefano Casertano17.04.2015Economics

Roman taxi drivers are competing for business against Uber. Is the online service the future of the market or should it be regulated? The struggle is representative of Italy’s wider issue of conservatism against progression.

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QUIQUE GARCIA/AFP/Getty Images

There is a little story in Italy that reveals a lot about the country: the tale of “Uber.” The service is meant to allow private drivers to transport people in their cars. The popular company, backed by a pool of international banks, is causing widespread anger and protest in the two Italian cities where the service is active.

Roman taxi drivers are especially exasperated. Some members of this very diverse group have gone on “night hunts” of Uber drivers as a form of entertainment and to provoke a reaction. They are worried about the unstoppable erosion of their market. Rome in particular is served by a multitude of car hire options (including a consistent amount of illegal ones) which the city is not able to manage or contain.

The Chaotic World of Car Hires

Landing in Fiumicino, a 45 minute drive from the city, is an experience reminiscent of landing in a crowded African airport. A loud legion of drivers awaits passengers with names written on signs. Some even show a touch of modernity, displaying names written on tablets. As visitors make it beyond this first line, a second group awaits: drivers displaying obscure badges on their chests, shouting “Need a ride, sir?” If one is smart enough to make to the official taxi line, there is something else to watch out for: if the taxi is licensed in Rome, a ride to the center costs a fixed amount (€40). Yet, if the taxi is licensed from other towns (like Fiumicino), you can end up paying twice as much.

One interesting anecdote involves a British tourist asking for a taxi ride from Rome’s main station to Fiumicino. She entered a cab, and the next taxi driver in line was jealous. He opened the door of the first car and tried to grab the tourist. As she resisted—aided by her driver—the competitor went back to his car, opened the trunk and extracted a katana sword, _Kill Bill_ style.

Uber is a new contribution to this chaos. The company has engaged in a widespread battle to disseminate the message that their service represents “the future” and that the definitive success of the sharing economy won’t be halted by those conservative, sword-wielding taxi drivers. Uber, they claim, will bring taxi costs down, and everybody will be happy in the end.

There is room to argue regarding the extent to which Uber really represents the future. In Russia, it has been commonplace since Soviet times to offer a ride to strangers in exchange for money. Years ago, I landed in Moscow at 3 a.m. and was eventually rescued by a private driver. Yet, it is clear that the ultimate goal of capitalism closely resembles scientific socialism, so we won’t explore this point any further.
Uber is depicting taxi drivers in the media in the context of Italy’s malaise: the true embodiment of conservatism preventing this beautiful and tormented country from expressing its full potential. However, I believe it’s time to be on the taxi drivers’ side. I have nothing against Uber, but I understand the taxi drivers’ point as well, and it’s a relevant one.

Taxi Drivers Have it Hard Enough

Italian taxi drivers are not just subject to a jungle of unregulated competition. They also endure idiotic obstacles including not only the most expensive insurance in Europe, but also the highest income taxes after France and Sweden, and high fees on the bank accounts in which the keep they money left over. On top of all of this, they must also pay very high annual taxes just for the privilege of owning a car.
If one is to kick-start Italy again, I would not start from the bottom with taxi drivers. I would start by implementing a thorough deregulation of insurance and banks, to bring down costs for taxis; then reduce the state tax on gas, and possibly also the yearly taxes on car ownership. Then one could say that taxi drivers have the chance to “fairly compete” with a company like Uber, which relies on extended large-scale economies and pays large chunks of its taxes abroad.

Last but not least, a taxi driver license in Rome costs up to €120,000. If the state wants to introduce a new service, the burden of the reduced value of the license cannot be borne only by license owners. Any “liberal” reform includes a sort of compensation for the incumbents; the alternative is introducing the reform by force, and this seems to be the approach in this case.

As a point of comparison: Berlin has reacted differently than Rome by forbidding Uber altogether. The same city is thinking about introducing fixed rent rates for apartments, and has already forbidden AirBnB. Berlin’s choices seem to go beyond the decayed form of Socialism developed in Moscow and Cuba, with private taxi services and room rentals for tourists. Berlin wants to go all the way back to the purest form of Trotskyism, and one is left wondering whether there is more freedom in chaotic Rome or over-regulated Berlin.

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