January 1st, 2014, it would seem as though the Taxi Commissions have won. The dreaded ’15-minute law’ will take effect, requiring smartphone chauffeur apps to wait 15 minutes after customers order a ride before picking them up, in order to — well, we can’t claim to understand what the intended ‘balanced’ result is meant to be.
The history of the Paris Taxi market is a long one, which we covered earlier this year - the number of taxis in Paris has remained relatively unchanged since 1950, and when Paris taxis want to flex their muscle, they need only block all major roads and highways in order to get their way. The Paris taxi market is so well controlled that Uber founder Travis Kalanick came up with the idea for his chauffeur service while in the City of Light, looking trying to hail a taxi for 30 minutes to attend LeWeb in 2008.
The ’15-minute law’ (which is actually a presidential decree, and not a law voted by the Senate & National Assembly) is not news to most; we heard earlier this year that the decree had been proposed, After the initial shock of such a law set in, it seems that the chauffeur apps like SnapCar, LeCab, Chauffeur Privé, as well as Uber had spoken with the Minister of Transportation, among other people, and had convinced the group in charge of the decree to put include a clause stating that the law would only apply to users who had signed up in the past 24-48 hours – said clause would have, of course, rendered the decree useless, as there is both no way to verify on sight when a passenger signed up for the service, nor do new-passengers make up for a large percentage of daily users on chauffeur apps.
In the days leading up to the announcement about whether the decree would be put in place, it seems the Paris Taxi Commission threatened once again to block all major thoroughfare unless the caveat to the decree was removed and the decree enacted as originally announced.
And so we find ourselves here - looking at the precedent about to be set in France which encourages preserving old industry and punishing startups looking to improve broken markets – that sounds similar to what the Minister of Industrial Renewal Arnaud Montebourg said at LeWeb in December.
Of course, the usual suspects began the old chant of ‘France hates competition‘ – it’s a chant reserved for France, and not for cities like New York which are working on banning Airbnb-like services, or San Francisco, which has … well, tried to legally ban Lyft & Uber several times before ultimately giving in.
No, whenever there’s a chance for the international community to chime in about what France is & isn’t, you can always count on them to do exactly that. And, of course, by international community, I mean Softech VC Partner Jean-Francois Clavier, oDesk VP of Product & former head of PayPal France Stephane Kasriel (“Retarded. And Sad.”) and TechCrunch’s resident Lyonnais Romain Dillet – yes, indeed, the international community of French people, who despise their own country and long to be back in a city fighting a different war with a different startup, came out in droves like the droves they are.
I’m sure a psychologist would have a field-day with this aforementioned French epidemic.
Looking beyond the instant desire to repeat the same ‘startups can’t exist in France’ discourse, the future of chauffeur apps in France looks shockingly similar to the present; that is, Uber has a huge upper-hand over the local competition. Nicolas Colin recently wrote that the 15-minute law is more likely to strengthen Uber’s position than weaken it, as creating more local barriers will make it harder for other chauffeur apps to compete with Uber, who can leverage its presence in dozens of other countries to withstand any legal or financial blowback from the decree.
If the goal is to preserve the advantage that taxi-drivers have, then the decree may accomplish its attended goal. Indeed, while no amount of wait-time will change the reputation & burden that comes with wearing the label of ‘taxi driver’ in Paris, the numerous former honest taxi-drivers, tired of their colleagues making life difficult for them by breeding a reputation of dishonesty & corruption, who have sold their license and switched to becoming independent chauffeurs, working for several chauffeur of the aforementioned local &international startups, will undoubtedly see their business continue to grow, despite the decree.
Before the law was made concrete, I sat down for coffee with PIerre-Dimitry Gore-Coty, who heads up Uber in France, and the impression I got was that Uber neither possesses the ability to implement technologically such a delay into its service, nor does it have any plans of investing time, energy & money into making its service compatible with such a decree.
On the contrary, their money & energy will be invested, along with other chauffeur startup founders, into fighting the decree – as it turns out, a decree cannot sihft the competitive balance without being voted on by the legislative branch (thus rendering it a law), and there is a pretty good argument for saying that the decree give an unfair competitive edge to taxis, given that MInister Montebourg himself said that this was the government’s intended goal.
The real future of the “15-minute law” can be predicted by looking at every other fight that Uber has ever fought. In Washington DC, the taxi commission planned a sting operation on one chauffeur – the people revolted and Uber won mindshare, press, and legal right to exist. In San Francisco, the service was nearly outlawed before being voted into law; in fact, the desperate retaliation of a taxi commission in any given city can be seen as the last hurrah of a dying monopoly in a respective market. Chauffeur apps are not illegal, nor are the chauffeurs making a living on them. They are merely a circumvention of a perceived monopoly that has existed for far too long, much like Hotels, Car Rental agencies, and any other group that has put up barriers inhibiting anyone from doing what their doing.
Taxis got fat by controlling the market, which is OK. Where they went wrong was doing it at the expense of the customer, because the customer is always right, and right now, the customer is choosing chauffeur apps.