Just wait what would happen when Google’s Electric “Johnny Cab” arrives.
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June 11, 2014, 5:03 a.m. EDT
LONDON–Taxi drivers planned to turn a handful of European city centers into giant parking lots Wednesday, protesting the mobile car-hailing services of Uber Technologies Inc. and others.
The demonstrations highlight some challenges facing Uber and its peers as they race to increase revenue and woo investors. But the scale of the planned protests across the continent also underscores the extent to which the technology has upended one of the world’s most regulated industries.
In London, thousands of cab drivers were expected to converge on Trafalgar Square, triggering a warning to organizers from the city’s police force. London’s transportation agency posted an advisory online warning customers of the protest and suggesting that they use the subway system. In Madrid, taxi drivers said they would take the day off. French drivers planned to launch what they called “escargot” operations: driving at a snail’s pace on major streets and thoroughfares — for instance, to and from the airport.
Uber has been subjected to scrutiny elsewhere, including the U.S. and Canada. But the hurdles have been higher in Europe, where taxi drivers tend to be well organized. The industry is also often more heavily regulated, and governments are more willing to actively protect sectors under threat of job losses.
Uber is facing a series of legal challenges across the continent — including a potential decision by a London court about whether the company’s app constitutes a cab meter. A U.K. regulator has deemed Uber legal, but the service could be hampered if a court rules otherwise. In Brussels and Berlin, Uber is fighting court rulings that have effectively barred the service.
All that is a clear risk for the company, and for investors who have been pouring money into it. The privately held, San Francisco-based company raised $1.2 billion earlier this month from investors, valuing it at $18.2 billion.
Uber executives have embraced the protests as a chance to show how useful the service is. “If anything, it’s going to make Uber even more visible, and make a lot of people realize that they now have choices that they didn’t have before,” said Pierre-Dimitri Gore-Coty, Uber’s general manager of Western and Northern Europe.
In many markets, Uber acts as a private car service or ride-sharing service, allowing users to book through their smartphones. Traditional taxi drivers complain it and similar services are doing the work of taxis, but don’t have to spend on the same regulatory and licensing requirements. Many drivers have complained about unlicensed, private-hire car services, but taxi companies say the fast growth of Uber and others has heightened the threat significantly.
“We’re little companies up against $18 billion,” said Nadine Annet, vice chairman of French taxi-driver federation FNAT, citing Uber’s valuation. “Our profession is in jeopardy across Europe.”
In several of the protests, drivers aren’t specifically targeting Uber and other service providers, but what they say is outmoded regulation that makes it hard for them to compete. Part of Uber’s challenge in Europe is the variety of regulations governing the continent, even among the 28-member European Union, each of which has different unions and different rules.
In London, for example, only the city’s ubiquitous “black cabs” are allowed to be equipped with a taxi meter, under a 1998 law. The local transportation agency has said it doesn’t consider Uber’s app — which can measure the time and distance of a trip to calculate a fare — to be the same as a taxi meter for now, allowing Uber to operate. But the agency has asked a court to weigh in.
In Italy, Uber uses licensed cars and operates under laws allowing them to pick up passengers as long as they return to a base — which lessens the competitive threat to licensed taxis. Taxi drivers have filed a complaint against Uber saying its drivers weren’t following this law. However Uber has contested the interpretation of the law and the Italian courts are still deciding the matter.
On Wednesday, Madrid cabdrivers will strike for 24 hours starting at 6 a.m. local time. Barcelona taxi drivers plan a protest march in the city’s downtown.
In Berlin, taxi drivers plan to meet at several locations at noon local time and drive together to Olympischer Platz, a square in the west of the city, where up to 1,000 taxis are expected to arrive at around 1 p.m. A spokesman for Berlin’s police said “traffic will be affected short-term along the routes” of the taxi demonstrations.