Neelie KROES
Vice-President of the European Commission

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My view on today's taxi protests and what it means for the sharing economy

Let me respond to the news of widespread strikes and numerous attempts to limit or ban taxi app services across Europe. The debate about taxi apps is really a debate about the wider sharing economy.

Let me respond to the news of widespread strikes and numerous attempts to limit or ban taxi app services across Europe.

Many people know how outraged I was by the reaction of authorities and drivers to the emergence of services like ‘Uber’ in Brussels, Berlin, Milan, Madrid and more cities across Europe. (there are plenty of European competitors and complements by the way, like: DJump, Taxipal, Taxify, Hailo, BlaBla and more). But it becoming clear that there's a wider significance of this debate.

The debate about taxi apps is really a debate about the wider sharing economy. That debate forces us to think about the disruptive effects of digital technology and the need for entrepreneurs in our society. And that’s what the Taxi protests are really about.

It is right that we feel sympathy for people who face big changes in their lives. Drivers need to feed their families and plan for the future – but how can they if that future includes not only price competition from Uber, but also driverless cars? It can clearly be a tough profession to work in. Many are also locked into an expensive licensing system, where the license effectively forms part of their pension. So I don’t think it helps to be dismissive of real concerns that cab drivers have about new forms of competition. But we cannot run away from these debates either.

Whether it is about cabs, accommodation, music, flights, the news or whatever.  The fact is that digital technology is changing many aspects of our lives. We cannot address these challenges by ignoring them, by going on strike, or by trying to ban these innovations out of existence.

That is why a strike won’t work: rather than "downing tools" what we need is a real dialogue where we talk about these disruptions caused by technology.

We need to see that even if the change requires adjustments, it also is a sign of much needed entrepreneurs, and it is a boost to all of us as consumers. And all of these perspectives need to be accommodated.

I believe it is a fundamental truth that Europe needs more entrepreneurs: people who will shake and wake us and create jobs and growth in the process.

We also need services that are designed around consumers. The old way of creating services and regulations around producers doesn’t work anymore. They must have a voice, but if you design systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.

That is old-fashioned compared to a system that helps all of us as consumers, and encourages entrepreneurs. We need both those elements in our economy; otherwise we will be outpaced to our East and our West. We’ll be known as the place that used to be the future, but instead has become the world’s tourism playground and nursing home. I don’t want Europe to have that future. That is not the world I imagine by grandchildren growing up in. 

So that is why I have been vocal about taxi apps. Because the disruptive force of technology is a good thing overall. It eliminates some jobs and it changes others. But it improves most jobs and it creates new ones as well. 

If we don’t use digital technology then millions of jobs will simply move elsewhere and Europeans will get angry that they are denied the conveniences that people in Asia and Australia and America and Africa take for granted.  Many of the people making those innovations will come from America and other places, but just as many will be home-grown innovators that the rest of the world is jealous of.  All of it will contribute to our prosperity.

People in the sharing economy like drivers, accommodation hosts, equipment owners and artisans – these people all need to pay their taxes and play by the rules.  And it’s the job of national and local authorities to make sure that happens.

But the rest of us cannot hide in a cave. 

Taxis can take advantage of these new innovations in ways consumers like – they can arrive more quickly, they could serve big events better, there could be more of them, their working hours could be more flexible and suited to driver needs – and apps can help achieve that.

More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today.  It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer.

So it’s time for people at local and national levels to sit around a table and come up with reasonable accommodations of innovation.  We cannot criminalise a whole class of citizens, or drive tourists away from places that need money, in order to protect a few industries that think they can be exempt from the digital revolution. It’s not fair on everyone else, and it’s not realistic.

If I have learnt anything from the recent European elections it is that we get nowhere in Europe by running away from hard truths. It’s time to face facts:  digital innovations like taxi apps are here to stay. We need to work with them not against them. 

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Comments

  • I can not agree more with Ms Neelie Kroes' position. ...The old way of creating services and regulations around producers doesn’t work anymore ... It is time to face new reality and make the most out of the new digital opportunities Regards, Antonio from Spain
  • Are the taxi drivers on strike against digital products? No. A modern taxi is stuffed with digital technology. Are the taxi drivers against apps? No, EU firms have developed nice apps that are being used by many people to get a cab. These firms would NEVER talk about themselves as *entrepeneurs* developing *disruptive* technology. Help no. What is going on here? It looks like a clash of interests. And it looks like the President Politician of EU Digital Strategy has choosen a side. Check the digital services she is actually using for a dialogue with citizens. The channels of choice are operated by companies OUTSIDE the EU. See this website, right-hand side: "My pages: Twitter, Facebook, Google+, YouTube (Owner Google), FlickR (owner Yahoo). " In doing so the EU top politician expresses an opinion. That opinion seems to be: the future of Digital Agenda for Europe I see in the hands of non EU based companies.
  • Are the taxi drivers on strike against digital products? No. A modern taxi is stuffed with digital technology. Are the taxi drivers against apps? No, EU firms have developed nice apps that are being used by many people to get a cab. These firms would NEVER talk about themselves as *entrepeneurs* developing *disruptive* technology. Help no. Are taxi drivers against sharing? No, they share thoughts and news when you drive with them. What is going on here? It looks like a clash of interests. And it looks like the President Politician of EU Digital Strategy has choosen a side. Check the digital services she is actually using for a dialogue with citizens. The channels of choice are operated by companies OUTSIDE the EU. See this website, right-hand side: "My pages: Twitter, Facebook, Google+, YouTube (Owner Google), FlickR (owner Yahoo). " In doing so the EU top politician expresses an opinion. That opinion seems to be: the future of Digital Agenda for Europe I see in the hands of non EU based corporations. It is understandable why the taxi drivers used a *disruptive* way to express their opinion. They do not want to share their profit with global corporations that do not share their profit - would you?
  • Hi Neelie, I wholeheartedly support the idea that Europe can't run away from hard truths and I am thankful that a politician of your status says things so clearly. If Europe is to remain competitive in this globalized world it can't isolate itself by protecting industries. However all those populist parties go on and on blaming external factors on what it is really an internal factor: we need to outwit the rest of the world if we are to remain competitive with our current demographic structure, welfare state and levels of debt.
  • Dear Ms Kroes, I can't improve your words. Congratulations. And I truly thank you for your support. As an entrepreneur on a mission to foster a digital start-up in the sharing economy business, I adhere to 100% of your words. We run SocialCar, the first peer to peer car rental platform operating in Spain. We withhold taxes on behalf of the car owners, ensure that all cars available for rent through our platform are properly insured, covering the universal driver, pay VAT... We are confident our model complies with tax regulation. But, more important, we have allowed car owners who have trusted in our proposal to cash in almost €1MM in the previous months. In a country with high unemployment and starved of cash, to many of them these payments have been life saving. So yes, embracing change can be good. I thank you again for your supportive and crystal clear words. I send you my strength to keep on. Best regards, Francesc Queralt SocialCar.com co-Founder
  • Ms Neelie Kroes, After reading your post I find it regrettable that your speech I have already heard, at least the ones we are interested in new technologies for more than 20 years ago. Your speech is not innovative and is old and repetitive. The technological revolution brought about by the new software tools and telecommunications tools has already considered this problem many times. It is not about being for or against new technologies, it is about to figure out if the technological revolution which we is positive for the people or, in the other way, it have to pass over them like a steamroller (as happened during the industrial revolution) . Apparently, the important thing is for certain "lobbies" that companies like Google and Uber can monopolize certain sectors. (Millions of euros in research for driving without driver + million euros for applications such as Uber wildly seeking to liberalize the regulated transport industry + million buying satellite communications companies = MONOPOLY ) In Spain everybody say "white and in the bottle = MILK". Excuse, technologie advances very fast you like it or not, but certain sectors, you like it or not we also have to be regulated and supervised by the government, and new technologies are not an excuse to not do it ...
  • Dear Ms Kroes, Thanks for sharing your views. In this occasion I disagree with your position. As a first comment I believe is an error to compare services like blablacar with uber as the ones for sharing transport among user are in different page to those profit focus such as uber. As a taxpayer I would like first the EU to consider how uber is going to ensure its providers are going to pay the tax not been paid by cabs that will get out of business. While I believe digital revolution must come and help us out to drive prices down it should: (1) ensure the rest of the society are not worse off, maybe the EU should impose uber a withholding to the providers' revenues the same way as the income tax (2) it should ensure the quality of the car and the local rules are followed. In summary, while I am in favour of an open market, I think the EU role (and on that basis yours) is to explore how Uber and others apps is going to ensure taxes are paid and consumers get a decent quality and once satisfied then, green light to the release of these apps. Regards, Alex
  • A very thought provoking post, but two things immediately leap out at me. First of all, without their collective action, you wouldn not be writing the post - they have forced a debate that otherwise would have happened 'behind closed doors', if it indeed happened at all. Secondly, I am all in favour of innovation and not particularly concerned which country is the originator, as long as the new disruptive, innovative companies pay tax. As Amazon, Google (and now Apple) show, the process of a new global player disrupting a market full of smaller (often local) operators opens up possibilities for tax avoidance, so we may not end up hiding in a cave, but being forced to live in one due to the lack of public revenue!
  • Le agradeceria dejase de joder a nuestro sector.. Cual es su siguiente paso? acabar con el monopolio de policías y bomberos?
  • Clearly you have difficulty understanding what the issue is. Safety firstly. The app will be available to anyone with a smart phone purporting to be a mini cab driver. No office to work from and more importantly no controller to know who you really are! Secondly, the phone acts as a meter and only London taxi drivers are allowed to use meters. This is the law of the UK. Additionally, if you want to use a meter in London; DO THE KNOWLEDGE THEN YOU CAN!
  • Talk about completly missunderstanding the issue. There's nothing new or exclusive about taxi apps. Many established taxi companies have their own apps and sms or calling has been available for decades. What's new is that these companies has made it their business to use loopholes to avoid regulation. Their business model isn't more innovative than tax planning. Also self-driving cars won't really exist as your seem to think they will. At the point where a car really becomes self-driving it's essentially public transport.
  • Dear Ms. Neelie Kroes I like to read his words and thinking. We need from the EU. politicians to help European civil society to contribute to this change. While it is not easy. In the coming years we will see some of the most disruptive social and economic changes, and should be planned well to EUROPA stronger. Dialogue and education are essential. Now we can count on you Thanks. Yesterday I wrote a post about this topic and I agree on many points. http://blog.vkmc.es
  • Dear Ms. Neelie Kroes I like to read his words and thinking. We need from the EU. politicians to help European civil society to contribute to this change. While it is not easy. In the coming years we will see some of the most disruptive social and economic changes, and should be planned well to EUROPA stronger. Dialogue and education are essential. Now we can count on you Thanks. Yesterday I wrote a post about this topic and I agree on many points. http://blog.vkmc.es
  • Dear Ms. Neelie Kroes I like to read his words and thinking. We need from the EU. politicians to help European civil society to contribute to this change. While it is not easy. In the coming years we will see some of the most disruptive social and economic changes, and should be planned well to EUROPA stronger. Dialogue and education are essential. Now we can count on you Thanks. Yesterday I wrote a post about this topic and I agree on many points. http://blog.vkmc.es
  • Fully support this vision. It is really a pity that current EU policy does not support as it should this "public interest priority" vision. But this is the way of Policy of recover the contact with reality and citizenship...
  • Ms. Kroes, I think you have got it entirely wrong. It is not about protectionism or about lack of innovation. Your blog makes the mistake to assume that taxi operators are not using innovative digital tool or willing to embrace change. Most are. Many offer better services and functions than Uber. The problem is politicians demanding proper regulation of some taxi services while allowing others to do what they like, where they like, when they like. This is political hypocrisy. All service providers should operate under the same system. Would you accept the free and unregulated use of radio frequencies? Would you allow mobile operators to do what they liked and charge what ever they wish? Of cause not. So why for taxis?
  • Hola soy taxista de Madrid; quiero explicar por que estoy en contra de uber y por que usted miente al pueblo: punto 1 uber no es una aplicación para compartir un vehículo y cooperar con los gastos; uber es una empresa que se dedica a prestar servicios de taxi de forma ilegal y además se queda con el 20% del dinero punto 2 uber no crea empleo y no invierte ni en la contratación de empleados ni paga seguros sociales ni vehiculos ni paga impuesto . Punto 3 uber es una multinacional Americana que pertenece a grupos como Google ,Goldman & sach Punto 5 si uber quier instalarse en España que se dé de alta contrate trabajadores compre vehiculos y saqué las respectiva licencia ; pero eso cuesta dinero y robar es gratis.Punto 6 seńora comisaria cuando abandone la política trabajara en uber,Google ,Goldman&Sach?
  • Hear, hear, we need more of realistic politicians like Mrs Kroes: times are changing and we are on the move to Society30, so join the ride, see new opportunities and let's embrace the future to be...
  • A reasonable position that we cannot ignore technology. I'm not sure anyone is ignoring technology. This isn't about phone apps. This is, as you said, a wider issue of companies completely ignoring all government regulations. It's a brazen end-around by a CEO who believes the European Commission itself is an obsolete institution. Uber simply believes your body and your rules are irrelevant and they act accordingly. I'd agree that driverless cars are coming in the next 20 years, that's not today's debate. Today's debate is whether a taxi company like Uber is allowed to circumvent your authority just because they use a phone app (like other taxi companies do).
  • A reasonable position that we cannot ignore technology. I'm not sure anyone is ignoring technology. This isn't about phone apps. This is, as you said, a wider issue of companies completely ignoring all government regulations. It's a brazen end-around by a CEO who believes the European Commission itself is an obsolete institution. Uber simply believes your body and your rules are irrelevant and they act accordingly. I'd agree that driverless cars are coming in the next 20 years, that's not today's debate. Today's debate is whether a taxi company like Uber is allowed to circumvent your authority just because they use a phone app (like other taxi companies do).
  • Estimada sra. Kroes, estoy totalmente de acuerdo con usted en que no se puede detener el avance tecnológico, es más, debemos de colaborar en adaptarnos a las nuevas situaciones que nos surgirán, es verdad, también estoy de acuerdo en que los taxis tenemos que plantearnos el reto y aceptar nuevas formas de competir, ahora bién, como reaccionaría cualquiera de estas novedosas multinacionales si alguien intentara captar de su mercado objetivo mediante damping, o utilizando fraudulentamente su marca o sus patentes, la respuesta ya nos la dió Starbuks con la humilde cervecería que se le ocurrió poner el nombre registrado de un cafe de Starbuks a una de sus cervezas, ¿Hay alguna diferencia entre lo que hicieron los taxis ayer y lo que hicieron los ejecutivos de Starbuks? ¿Tienen más derecho un registro o patente comercial que una concesión administrativa? En virtud a la modernida ¿es lícito intentar derribar a los ya considerados competidores por medios no autorizados ? He leído la evolución de la situación en New York y poco a poco los taxis tradicionales van quedando en minoría, minoría ante una aplicación cuyo precio al público lo marca la espectativa que tengan los ejecutivos que la manejan, aquí en Europa, los precios del taxi son autorizados por la administración y concretamente en Barcelona, donde ejerzo, la tarifa más habitual se diferencia con la que traía UBER en el IVA, aquella no tenía y si además contamos el resto de pagos a las administraciones, UBER casi doblaba el precio por KM. que me queda para cubrir los costes y mi sueldo.Evidentemente esto es así puesto que nuestras tarifas de horario laboral (la más usada) realmente es poco más que el coste marginal de un km. Es el coste que para los taxistas tienen el derecho de "monopolio" ofrecer precios de competencia perfecta ya sabe Coste marginal=precio. No obstante quizá no haya usted caído en la cuenta además que cuando aumenta la competencia en el mercado del taxi, se reduce la tasa o nivel de km. con pasaje, la consecuencia inmediata es la reducción de la recaudación pero lo más perverso es que además se reduce el margen, nosotros lo sabemos y UBER también por eso su forma de entrada fue la de promocionar el numero de conductores con promesas de regalos tecnológicos , engaños, decían que hay un vacío legal, y mintiendo sobre los precios del taxi, utilizando medios de comunicación de alcance y foros de internet para recitar como si de un mantra fuese una y otra vez los tópicos de los taxistas, y contradiciéndose entre ellos hoy digo una cosa y al ver las reacciones cambio de argumento, ¿eso es seriedad? ¿Van ustedes a permitir una burbuja económica en el sector servicios similar a la pasada burbuja financiera? Reciba un cordial saludo
  • Is This your share economy? (if you have some problem, openn a app and translate it) "Airbnb, Uber e la "share economy" finiscono nel mirino della giustizia Usa Il procuratore generale di New York, Eric Schneiderman denuncia i nuovi protagonisti dell'economia digitale: a cominciare dall'elusione fiscale, si considerano sopra le leggi. Nel mirino sono finiti il sito per gli affitti brevi nel quale si nascondevano albergatori professionisti e quello dei taxi alternativi che lo scorso inverno ha sfruttato la neve per applicare tariffe altissime"
  • The wordings of EU Top Polician Kroes come close to those of a New York politician on the same topic. That should make citizens sharp and alert. This often happens as a result of excellent global lobby work. In this case PR to promote US tech companies (sometimes backed by banks that co-created EU financial crisis). http://carrion2013.com/category/pr-statements/page/2 "In order for New York City to be competitive in the global marketplace, we need to be supportive of new industries that are thriving in the digital or ‘Share Economy.’ The Attorney General’s approach shouldn’t be to try to kill Airbnb or throw up roadblocks to its success. Instead, we must look for ways to update our laws and regulations to ensure companies like this one can flourish here as they have in other cities and countries, while protecting our local residents. Airbnb has the potential to add billions to New York’s economy. Government should flex its muscle to encourage innovative new industries to enter our marketplace. That’s the way to create jobs, increase revenue, compete globally and nurture a whole new generation of successful entrepreneurs.” "
  • Hello Mrs. Kroes, i agree with you entirely in the perspective of your letter, and i'd like to high light this quote: "More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today. It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer. So it’s time for people at local and national levels to sit around a table and come up with reasonable accommodations of innovation. We cannot criminalise a whole class of citizens [...] in order to protect a few industries that think they can be exempt from the digital revolution. It’s not fair on everyone else, and it’s not realistic." That's entirely true in the matter treated in your letter, but is also true in other matters, like the one i'm interested in. And that's the just approved e-cig European directive, in which, in my opinion, the EP is limiting the development of this new industry, which can save millions of lives, just to protect the interests of tobacco and farmaceutical lobbys. It's clear that the vaping industry needs a clear legislation throughout the EU, but the steps taken so far are just considering the interests of the established industries, the ones that provide the means of addiction and the ones that provides the (mostly uneffective) means to quit it. So this comment is just to let you see that your words can be interpolated to other new industries in which the European Union is taking a whole different approach. Please consider taking your own words in consideration when the vaping regulations are discussed.
  • Hello Mrs. Kroes, i agree with you entirely in the perspective of your letter, and i'd like to high light this quote: "More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today. It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer. So it’s time for people at local and national levels to sit around a table and come up with reasonable accommodations of innovation. We cannot criminalise a whole class of citizens [...] in order to protect a few industries that think they can be exempt from the digital revolution. It’s not fair on everyone else, and it’s not realistic." That's entirely true in the matter treated in your letter, but is also true in other matters, like the one i'm interested in. And that's the just approved e-cig European directive, in which, in my opinion, the EP is limiting the development of this new industry, which can save millions of lives, just to protect the interests of tobacco and farmaceutical lobbys. It's clear that the vaping industry needs a clear legislation throughout the EU, but the steps taken so far are just considering the interests of the established industries, the ones that provide the means of addiction and the ones that provides the (mostly uneffective) means to quit it. So this comment is just to let you see that your words can be interpolated to other new industries in which the European Union is taking a whole different approach. Please consider taking your own words in consideration when the vaping regulations are discussed.
  • This is marketing management. Nothing wrong with it. But politics is something different.
  • If I were you I would deal with the situation of the taxi in the Netherlands, a liberalized system with rates among the highest in the world and the worst drivers
  • I totally agree that we need services that are designed around consumers. So when are we going to see the disruptive effects of digital technology with a redesign of the European Commission?
  • Thank you for your views which I agree with and would like to expand to a the wider concept of choice. A few years ago, a taxi I booked arrived with 45€ on the meter. When I called the company to complain, I was told that I had no choice, I could not cancel the booking, I needed to pay the 45€ Extra for a 30€ trip. Now technology and customer focused entrepreneurs have given us choices, not only for taxis, but also for music, films, telecoms. Its time for the traditional suppliers of services to think of their customers and their choices and not to think of their lawyers and lobbyists.
  • Innovative entrepreneurs are blocked by national laws. Why do the doors open for a foreign innovative entrepreneur?
  • Customers use Uber to request rides and track their reserved vehicle's location. As of September 16, 2014, the service was available in 45 countries and more than 100 cities worldwide, and was valued at more than US$15 billion..zeedo shopcasti audio. Uber has met with protests from taxi drivers and taxi companies who believe that ride-sharing companies are illegal taxicab operations that engage in unfair business practices and compromise passenger safety console DJ

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