Uber is killing off iconic black cabs, warns Zac Goldsmith

MP also asks if company is practising predatory pricing to drive out competition

TX4 Black Cab

London's iconic black cabs could disappear from the capital's streets in a few years due to an unfair playing field created by Uber, Conservative mayoral candidate Zac Goldsmith has warned.

"The tragedy is that black cabs’ days could soon be numbered. If trends continue, I do not think that there is any doubt that they will be extinct in a matter of years," he said, speaking in a Westminster debate.

The number of minicab drivers in London has increased by 46 per cent to 86,500 compared with five years ago and is increasing by 1,000 every month, said Goldsmith.

Black cabs bear greater costs as they are subject to more regulation, although this allows them to pick up anyone from the street. In contrast, private hire vehicles are subject to less regulation because they are booked in advance, he said.

"That system largely worked fine until recently, but the emergence of Uber has turned it on its head," he said. According to Goldsmith the speed of the Uber app means that its cars are effectively hailed by users.

Goldsmith called on under-secretary of state for transport Andrew Jones to work with the Competition and Markets Authority to look at the London taxi market as a whole.

He added: "Uber enjoys a significant price advantage by not paying UK corporation tax, because jobs are booked through the Netherlands. Despite Uber being a $50bn (£32bn) company, its drivers earn far less than the London living wage; in some cases, they earn a lot less than the minimum wage."

He also questioned whether the low prices offered by some apps are kept artificially low to drive out competition — a form of predatory pricing. "I am not clear how much evidence exists on that, but there is a strong suspicion, which I think I share, that it is happening."

Sadiq Khan, MP for Tooting and Labour's mayoral candidate, echoed Goldsmith's concerns, adding that his constituents have told him that "some private hire vehicles are being driven out of the market by the pricing model of Uber".

Goldsmith said there is "no question of banning Uber, but there is a need for more clarity in the regulatory system" and said the government should also look at some of the "unnecessary regulations" applied to black cab drivers.

Under-secretary of state for transport Andrew Jones acknowledged that Uber and other new entrants to the market present "major challenges to established business models". However, he said the company has now been granted licences in 26 licensing authority areas in England.

"Therefore, 26 different authorities have decided that Uber is a fit and proper company, that its operating model meets the requirements of private hire legislation and that it keeps such records as the law requires," he said. ®

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