Black-cab drivers threaten chaos on London's streets this week in protest against Uber and other taxi-app upstarts. Paris could see demonstrations, too. Across the world, the taxi sector fears technological change and is keen to shut out competition.
By linking passengers and drivers via smartphones, companies like Uber are reshaping the sector. Uber's new $18-billion valuation shows how much is at stake. For that to be justified, the company needs to either create a lot of new demand for taxi travel, or steal business away from existing drivers.
London is an important test bed. It's a big, well-established market. The capital makes up nearly a third of taxis and private hire vehicles in a national sector with £5 billion a year in revenue, on 2012 estimates by the Law Commission. And how London treats the "sharing economy" has symbolic weight, too, since it aims to be Europe's top tech hub.
Regulators need to balance the consumer benefits with the disruptive impact. First, they must be sure there is no regulatory arbitrage going on - that new entrants are not compromising on, say, safety or taxes. In London at least, that doesn't seem to apply.
Second, look past the anger, and seize the opportunity to modernise a dated sector. London's flashpoint is the use of smartphones to calculate fares based on time and distance. This looks like using a "taximeter": Something only hail-able black cabs, not pre-booked mini cabs, are permitted to do now. Local regulator Transport for London (TfL) has angered black-cab drivers by siding with Uber, but asking the high court to rule.
In principle, though, if technology means fares can better reflect journeys, why not? And TfL could make other changes such as slimming down 'The Knowledge'. This famous test of London streets, which takes two to three years to master, makes little sense now everyone has GPS satellite-navigation systems.
Third, beware special pleading. Hackney Carriages, as black cabs are also known, are pricey but have advantages. Tourists like the iconography and locals value experienced drivers. No other cars can pick up passengers in the street. Other privileges include the use of cab ranks and bus lanes.
Last, manage the social costs of rapid change. Years learning The Knowledge, plus £40,000 for a car, is a big investment. That's why the population of black cabs has hovered around 22,000, while minicab numbers have swelled to 48,000. A TfL compromise package might cut licence and annual inspection fees to match minicab charges and help the sector develop its own apps.
Uber's valuation assumes success in all kinds of markets. In reality, of course, city-specific obstacles abound. But authorities should recognise the app era can't be bypassed forever.
