In late December 2017, continuing its string of legal setbacks, Uber lost a case in the European Court of Justice which ruled that Uber is a taxi company. Specifically, the courts rule that a company whose service is
“to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys” must be considered “a service in the field of transport.”
The news coverage of the case indicate that the ruling only impacts four markets (Poland, Czech Republic, Slovakia, and Romania), where Uber is yet to be regulated under the local or national laws. In fact, Uber is already regulated like a taxi company in many European nations.
Proponents of Uber argue that it is more than a taxi cab company (which is a true statement). However, I am not convinced that Uber should be thought of as an entirely different business from transportation services, just because it does surge pricing and hires only independent contractors. From a consumer perspective, none of these points on Uber’s back-end Operations matters.
To highlight this issue, I draw some parallels with the canon of Sherlock Holmes and Watson using cabs.
—
For instance, in the story “The Adventure of Abbey Grange“, during the winter cold of 1897, Sherlock Holmes wakes up Watson and cries,
The game is afoot.1; Not a Word! Into your clothes and come!
Watson then writes,
Ten minutes later, we were both in cab, rattling through the silent streets on our way to Charing Cross Station.
Sherlock and Watson, like many 21st century millennials, did not own a vehicle and always hailed a ride when the game was afoot. In the current days, Holmes would have used his smartphone to hail a ride, as the TV show Sherlock suggests.
Two points illustrated by observing 19th century cabs:
- Technology of the conveyance is Secondary. Uber is a tech firm due the dynamic platform design that dynamically connects riders to drivers. However, the main service offered is still a connection from point A to B.Note that the “cabs” hailed by Sherlock Holmes were “driven” by horses – they were really horse carriages. The term cab from French cabriolet could refer to two-wheeled hansom cabs cabs or four-wheeled Brougham cab (as in the Adventure of Three Students). In other words, the term cab precedes the automobile itself. For the same reason, hailing an automated driverless cab through a smartphone can still be thought of a hailing a cab, similar to what Sherlock would have thought of hailing a “horseless” cab. In fact, the technology leap from horse-carriage to automobile in terms of customer service experience is comparable to the improvement in service experience leap from human-driven automobiles to driverless cars.
- Cabs were driven by independent contractors before. Many of the horse-driven carriages were independently owned as very few Londoners owned horses, and charged unregulated prices. The first cabs popped up in London in 1820s. In fact, they remained as independent businesses (contractors with their own pricing!) for several years, as the Public Carriage Office (PCO) that regulates London cabs was not set up till 1850. The first automobile popped up in 1899, the same year the London taxi Cab company (famous for its black cabs) was established.
It is an entirely separate question if and how Uber should be regulated by local governments. However, the business model with independent cabs and flexible pricing policies, is historically speaking, not a new thing for cab services. It is hence not surprising that Uber is thought of as a cab service.
I am sure that when the game was afoot, modern day Sherlock would have hailed the quickest ride, without worrying about surge pricing. Would it make a difference to our intrepid detective whether it was an Uber or a taxicab, as long as the service from Baker Street to Charing Cross was speedy?
Notes:
- Within the canon, this is the first time Holmes utters the now-famous Shakespearan quote.
- I used the terms “cab” and “taxi” interchangeably. In fact, they do have slightly different historical origins – I will follow up with a post with further nuance later.