Why cities like Barcelona need Uber

By The Economist online

THE licensed-taxi system can be a racket. Many cities suppress the number of permits they hand out, guaranteeing that the system favours drivers, not their poor passengers. For proof that demand can be deliberately kept well short of supply, consider New York City. In 2014, the badges that are required to operate a yellow taxi there were selling for over $1m each. Anyone trying in vain to find a taxi on a rainy morning in Manhattan could easily tell you the market was loaded against the customer.

In much of the world, that model has been disrupted. New firms such as Uber are successful because they are determinedly on the side of the customer. Hailing a car on a ride-sharing app is cheap, convenient and reliable. Which is why taxi drivers hate it.

Big cities across the world, from London to Hong Kong, have witnessed protests by cabbies, often backed by their powerful unions, trying to protect their cosy cartel. Luckily for passengers they have mostly failed. Since Uber has made inroads in cities like New York, the premium on taxi badges has plummeted (as has…

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Read more here: Why cities like Barcelona need Uber

Category: Business and finance, Gulliver

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