Luddites, Cabs, and regulation

For over 130 years, taxi drivers in London have been tested on the Knowledge.  To pass the Knowledge, a prospective driver must memorize the city of London, and be able to plot an optimal route from any point in London (landmarks, businesses, tube stations, etc.) to any other point, entirely in their head.  Most candidates take over 4 years to pass the test, and preparing for it is frequently described as being as difficult as medical school.

The Knowledge has also served as a key to entering the middle class.  While cabbies in cities like New York work for dispatchers and generally don’t hold the job for life, London drivers own their cabs and keep the job until retirement.  An average London cabbie earns £65,000 ($102,000) a year, and sets his/her own hours.

These vetted taxi drivers feel threatened by a new competitor, Uber.  Since Uber drivers don’t need to have the Knowledge (instead, they need to have a GPS), there are much fewer barriers to entry.  Uber’s business model relies on skirting taxi regulations to cut down on costs.  This includes Hoboken regulations (which prompted a ban), such as mandatory fire extinguishers and first aid kits in each taxi. In London, there is plenty of room to undercut taxi prices, with a massive average fare of £27 ($42).

Uber has earned a reputation for shady (and blatantly immoral) business practices.  New drivers are encouraged to take out subprime loans to buy cars.  Journalists critical of the company have their privacy invaded.  Drivers are forced to listen to customers’ collective poor taste in music. Licensed taxis in London have protested by gridlocking roads around Parliament Square, and with the slogan UBER:  Under Boris Exempt from Regulation.

How have conflicts like this ended in the past?  This is hardly the first time new technology has threatened a profession.  The US armed forces has, as President Obama put it, less ‘horses and bayonets’ than it used to, but we still spend $738.8 billion on defense.  Photography used to require expensive equipment and training.  Nowadays, more people have access to phones (and cameras) than toilets, but there are still professional photographers.  Much earlier, the Luddites rioted in England and destroyed textile factories that they feared would put them out of jobs. While the majority of clothes we wear today are made in factories (and are still often made by children), there is still demand for tailors who create clothes by hand.

This doesn’t necessarily mean the end of black cabs or the Knowledge.  Uber (or a better automated dispatch) is capable of coexisting with highly trained taxis.  $40 fares are inaccessibly high to a lot of people.  Black cabs are a high-end service, and while there is overlap between them and Uber, they appeal to different markets.  Just like tailors can sell clothes in a global economy with sweatshops, and photographers still thrive in a world of camera phones, taxi drivers with the Knowledge and GPS-based cabs are not mutually exclusive.