Letter from London: Black Cabs to Uber —'Thanks, but No Thanks'

This is the first post in our Letter from London series, which highlights issues in the UK—or at least how they appear to this American abroad. For more news and trends from this side of the pond, follow our United Kingdom channel.

When it comes to British symbolism, London's black cabs are right up there with tea and the Queen. Since they first started motoring around in the early 1900s*, they've become an institution, ferrying locals and tourists alike across the Big Smoke. 

And now they're in danger.

It's the same story you'll hear in major cities across the globe: Uber and other ride-sharing apps are threatening local taxi drivers. Uber's argument, of course, is that its presence offers more choice to consumers and that increased competition will create a better, healthier transportation industry.

And for many cities, I would agree. As a former resident of San Francisco, I can attest to the fact that hailing a cab feels like a Sisyphean task. It's no wonder Uber, Lyft, and other services have done so well there: Yes, the Bay Area loves its shiny new apps, but they're also filling a major gap between supply and demand. In other cities, taxis are a necessary evil; they exist to get us from point A to point B, without offering any real advantage over ride-sharing services. (I don't know about you, but I've certainly taken taxi rides where I've fed directions to the driver, straight from my phone.)

But in London, cabs are different — which is probably why Uber's recent 'olive branch' fell so flat.

In a post on the company's blog, UK General Manager Jo Bertram announced the launch of Uber's TAXI feature in London, which lets users hail taxis within the app. The carrot for black cabs is that they'll avoid the 5% service fee for the first twelve months.

For Uber, the offer is a no-brainer: It's a nice PR move, and it gives them drivers with particular perks. Only taxis can use ranks at airports, hotels, and other hot spots, for example; and, as Bertram notes, "there are many times when a black cab is the fastest and best option because it is literally right there on the street in front of you. There is zero waiting time and you can whizz along the bus lane."

It's not hard to read Bertram's subtext: Wouldn't it be great to have those cabs picking up Uber customers?

But London cabbies aren't biting. "With over 15,000 cabbies registered with specific taxi-hailing apps like Gett and Hailo, we would be amazed if any drivers decide to take up Uber’s offer," responded the Licensed Taxi Drivers Association (LTDA). Hailo chief Andrew Pennington simply described the offer as "posturing," noting that Uber "are trying to send out the message, 'We are doing our best to reach across,' but I don't think there is serious intent."

It's understandable why the offer might be taken as disingenuous. Uber recently lobbied hard against proposed regulations from Transport for London (TfL); they succeeded in getting some of the more restricting ideas, like a mandatory five-minute wait, dropped. Uber asked users to sign a petition against the proposals and gathered 200,000 signatures. 

The company has also come under fire for its tax bill. Uber paid ￡22,134 in UK corporation tax in 2014, despite ￡866,000 in profit (and a valuation of some $60 billion). Black cabs are mulling court action. "Any four black-cab drivers pay more tax than Uber," says Steve McNamara, the LTDA's general secretary. 

The tax issue isn't unique to Uber; Google in particular has faced recent backlash for its UK 'sweetheart' tax. But it adds ammo to the argument that the company doesn't have British interests at heart. "Uber simply does not respect the people in Britain," writes taxi driver Trevor Merralls in the Guardian. 

At the heart of it, when Uber takes on black cabs it's eroding more than tradition. 

London cabs really are different. That's partly because would-be cabbies have a famous set of hoops to go through before receiving their taxi driver licence. They must pass 'the Knowledge', a test that requires a deep familiarity with every windy, meandering lane in London. Preparation takes an average of four years, and the examination has been called "the hardest test, of any kind, in the world." 

That may seem a bit silly in the age of Google Maps, but it's part of what makes London taxis so special: all those hours traversing the city on a moped, calculating the quickest routes across London, means you get better, faster service. (Bertram likely didn't make any cabbie friends by calling the Knowledge "onerous" and questioning its relevance.)

It also means that drivers work extremely hard for their green badge. This isn't a side hustle, it's a livelihood—one that opens up economic possibilities for working-class citizens. As Merralls explains: "I started driving a cab for one reason. It was the only way a working-class boy like me could be his own boss."

If that sentiment sounds somewhat familiar, it's because Uber and others make a similar claim. There are some 5 million people in the UK currently participating in the sharing economy, and London falls only behind San Francisco and New York for the number of sharing economy startups calling the city home. Uber, Taskrabbit, and others are bringing people into the workforce, allowing them to take advantage of non-traditional income sources.

But, as Merralls points out, that does not necessarily make Uber a viable career path. A study of American on-demand economy workers found that a whopping 79% participate part-time. For people like Uber driver and actor Jonathan Esseku, this works very well: "This means I don’t have to work more hours than I want to in any given week. That’s great if I have an audition or some acting work," he explains to the Independent. But Uber's low rates—a major selling point for customers—means it's difficult to make it work as a full-time position.

In a debate between black cab driver Seamus Balfe and Uber driver/founder of United Private Hire Drivers James Farrar, Farrar says: 

"Look at Uber’s situation – it pays  little corporation tax, and pays its drivers so poorly that a lot of our members are reliant on working tax credits, which is effectively a subsidy to Uber. It’s not fair that drivers should be exploited at that level, and it’s not fair that [black cabs] have to compete against what is effectively the equivalent of a ￡1 T-shirt at Primark."

Uber driver Lucas Malec agrees:  "At the moment, to earn decent money, you need to work 80-90 hours a week on Uber X. When I first started, I could work 40 hours a week on Uber X. ... The London taxi industry is completely broken. Uber has gone way too far. It's a race to the bottom now. ... The one who is the cheapest will win."

And that, ultimately, is the real dilemma. As a consumer, I know I'm not alone in wanting to support black cabs—and I suspect even Uber would prefer to work with them rather than against. And there truly are some positives coming out of competition within the industry: starting in October, all black cabs will accept cards and contactless payments (hallelujah!). But at the end of the day, most of us are motivated by our wallets. Can better service beat the cheaper ride? I'm not sure. 

Cover Photo: London Taxi drivers stage a protest on Whitehall on February 10, 2016. Drivers are claiming that Uber is not subjected to the same stringent regulation requirements as they are and that deregulation of the trade has compromised passenger safety. (Photo by Dan Kitwood/Getty Images)

*London cabs—AKA hackney carriages—have been around since the mid-1600s. They were horse-drawn (duh) until just before 1900.