Uber Protests Poised to Block Roads From London to Madrid

Uber Technologies Inc., the car-sharing service that’s rankling cabbies across the U.S., is facing its biggest protest yet from European drivers who say the smartphone application threatens their livelihoods.

More than 30,000 taxi and limo drivers from London to Milan plan to cause traffic snarls in tourist centers and shopping districts. They are asking regulators to apply tougher rules on San Francisco-based Uber, whose software allows customers to order a ride from drivers who don’t need licenses that can cost 200,000 euros ($270,000) apiece.

While similar demonstrations this year have led to smashed windshields and traffic chaos in Paris, a united front in Europe highlights the challenges for Uber’s expansion plan after a funding round that values the company at $17 billion, almost five times the figure in an earlier round. Out of some 128 cities it serves, only 20 are in Europe, including Manchester, Lyon and Zurich.

“European cities have tended to regulate taxi drivers much more than the U.S.,” said Charles Lichfield, an analyst at Eurasia Group in London. “I do think the protests have a better chance of succeeding.”

More than 3,000 Parisian drivers are planning to block the Charles de Gaulle and Orly airports as well as the A1 highway that circles the French capital starting at 6 a.m. local time, according to the FNAT taxi association in France.

Madrid, Milan

Madrid drivers plan to strike for 24 hours starting at the same time, with a demonstration scheduled outside the Public Works Ministry at 1 p.m, according to the Fedetaxi association. In Milan, some 5,000 taxis are expected to strike from 8 a.m. to 10 p.m, while 1,000 Berlin drivers are set to converge on the upscale Kurfuerstendamm shopping street at noon, according to local organizers.

Yet, it could be London — where drivers started planning the protest weeks ago — that draws the biggest crowd. Between 10,000 and 12,000 black cabs and private hire cars are expected to descend on the tourist hubs of Trafalgar Square and Parliament Square at 2 p.m., said Steve McNamara, general secretary of the Licensed Taxi Drivers Association.

Posters calling on drivers to join the demonstrations mimic a World War I recruiting campaign, featuring military commander Horatio Kitchener and his characteristic handlebar mustache.

In a response, Uber said today it’s opening its service in London to black-cab drivers, saying its 5 percent commission is the lowest of all booking systems in the city. Uber has thus far offered luxury cars and cheaper rides in London, while excluding licensed black cabs.

Tough Love’

The protests have a deeper significance beyond the car-service industry. They underscore the growing backlash against the likes of room-booking service Airbnb Inc. and video-streaming provider Aereo Inc. as they clash with traditional industries arguing the competitors should be subject to the same regulations.

In the U.S., local taxi groups have also lobbied against Uber and similar services in cities such as Seattle.

“For years the government has slapped new fees onto taxis and imposed more constraints — everything from car colors to, now, GPS tracking,” said Nadine Annet, president of the FNAT taxi association in France. “The least we’re asking for is that our competitors get the same tough love.”

In an e-mailed statement, Uber said its teams in Europe plan to keep the cities moving today.

“While the taxi protests may seek to bring Europe to a standstill, we’ll be on hand to get our riders from A to B.”

Uber Black

Across Europe, regulators and courts are struggling with the disconnect between the desire to protect a regulated industry and the need for more technological innovation.

Following complaints by Paris cab drivers, France this year imposed a rule on private services, requiring a minimum 15-minute wait between the time a car is booked and the passenger is picked up. The decree was later struck down by the country’s constitutional court.

A Berlin court banned the Uber Black chauffeur service in April, although the injunction hasn’t been enforced.

Uber supporters say the app promotes competition and innovation. European Commission Vice President Neelie Kroes said in a statement yesterday “this innovation isn’t going to disappear through blackmail or diktat.” In April, she called a local Brussels court’s decision to ban Uber “crazy” and said it sends “a bad anti-tech message about Brussels.”

“Consumers want to have these services. I’ve personally never sat in a run-down Uber car, but I’ve definitely experienced a lot of run-down taxis,” said Arndt Ellinghorst, head of automotive research at ISI Group in London. “It is a bit scary how protectionist Europe can be.”

Paris Taxi?

Uber raised $1.2 billion in new financing led by Fidelity Investments last week, valuing the company at about $17 billion, before added investments. The company had earlier raised $307.5 million from investors including Google Ventures, TPG Capital and Menlo Ventures.

Chief Executive Officer Travis Kalanick — who started Uber in 2009 after he and partner Garrett Camp couldn’t find a cab in Paris — has pushed the company into 128 cities in 37 countries. He said the low prices and ease of use that their drivers can offer will lead to a base of support from consumers that regulators won’t be able to ignore.

Uber said in its blog it’s responsible for 20,000 new jobs per month. The median income for drivers using the UberX platform, Uber’s low-cost service, is $90,000 per year in New York and more than $74,000 in San Francisco, the company said.

Uber advertises itself to prospective drivers as a way to start your own business, drawing users who aren’t professional chauffeurs. That’s different from apps such as Hailo, which recruit from the industry. Uber customers can tap the app on their smartphone and see the locations of taxis in real time, pay via a stored credit card and rate their driver.

“Citizens of these cities are getting around the cities much more cheaply,” Kalanick told Bloomberg TV in an interview this week. “How does a regulator or city official take that away from the population? Say that inexpensive transportation that’s high quality, you shouldn’t have?”

Source:Bloomberg

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