Wednesday, February 05, 2014

French Court Suspends Rule Delaying Pick Up of Passengers

PARIS—France's top administrative court Wednesday suspended a regulation that slowed how quickly car-service companies can pick up passengers, in a ruling that could rekindle a fight with traditional taxi drivers.

A rule passed Jan. 1 by the government in an attempt to protect a monopoly granted to licensed taxis forced Uber Technologies Inc. and other online and offline car service companies to wait at least 15 minutes before picking up a passenger. California-based Uber and local rivals such as AlloCab.com and Snapcar say their normal wait time is about half that.

In an emergency hearing earlier this week, four plaintiffs argued that the decree breached their right to free enterprise.

A judge at the Conseil d'État said their "argument was sufficient to create serious doubt over the legality of the decree." He decided that the government's justification for the new rule wasn't convincing and issued a suspension order.

"The delay in picking up a customer is a decisive factor in the commercial appeal of car services and by introducing a minimum delay of 15 minutes, the decree created an important risk of losing large amounts of customers," the judge said.

The regulation created a "serious and immediate" threat to the commercial activities of the plaintiffs, he said.

A panel of judges at the Conseil d'État is due to meet in the coming weeks to make a definitive decision on the case.

The conflict in France is part of a global turf war between companies in regulated markets and new competitors operating largely online. Dallas and other cities have tried to regulate and restrict the operation of companies such as Uber. Apartment-rental company Airbnb has faced challenges in New York and elsewhere over hotel regulations.

Paris has been a fertile ground for the new app-based car-service companies, with more than 12,000 vehicles now available—compared with nearly zero in 2010. The city is one of Uber's two biggest markets outside the U.S., alongside London.

Highlighting the appeal of the French capital, Uber introduced a new car-sharing service on Wednesday in Paris.

Pierre-Dimitri Gore-Coty, the head of Uber's French unit, said the whole conflict is caused by the wide difference between demand for urban transportation in Paris and supply.

The car companies had already found an ally in France's competition watchdog. In a nonbinding decision issued in December, the Autorité de la Concurrence said the new services weren't competing for street hails, and that adding a 15-minute delay could distort competition with "very negative consequences" for the new companies and customers.

Yanis Kiansky, AlloCab.com's chairman and founder, said his company's revenue from reservations in the first 10 days of January fell by half compared with the same period in December.

Licensed taxi-drivers expressed outrage with the Conseil d'État's decision. Mohamed Khademi, a taxi-driver union representative at CGT union and a cabdriver himself, said a taxi license now trades at €225,000 ($304,000) on the secondary market and taxi drivers are required to take expensive special courses. "You cannot let people do the same with none of those costs," he said.

The union has called for a general demonstration Feb. 10. "We can block all of France," he said.

A protest on Jan. 10 blocked access to the two main airports in Paris for several hours and led to clashes between cabdrivers and car-service drivers.

Source:  Wall Street Journal

1 comment:

Anonymous said...

French got more balls than London Cabbies
Watch and learn Bob.