Renzi puts brakes on Italy taxi reform
Matteo Renzi, the reformist prime minister who has vowed to drag Italy into the digital era, has put the brakes on a plan to liberalise the country’s car-hailing market amid pressure from taxi drivers.
Mr Renzi’s government had been planning to begin opening the taxi market as part of a broader competition law that targets other closed sectors, such as pharmacies and notaries. But ministers dropped the taxi measures last week after drivers threatened to strike.
The decision by Graziano Delrio, the transport minister, Maria Elena Boschi, the reforms minister, and Federica Gudi, the minister for economic development, triggered a strongly-worded rebuke from Uber, the US ride-hailing company. Its presence in Italy has so far been limited to about 2,000 vehicles in the high-end UberBlack category in just three cities: Rome, Milan, and Florence.
“We are deeply disappointed that the government has backed away from these reforms,” an Uber spokesman said. “Prime Minister Renzi needs to embrace the future — by supporting the innovation in transport that mobile phones have made possible — rather than cling to the past”.
Uber has often clashed with national governments — particularly in Europe — in its quest to take on rigid taxi licensing regimes and boost its business internationally.
But the criticism of Mr Renzi is particularly surprising given that he has cast himself as a champion of modernisation and technological innovation in Italy, who has succeeded in driving foreign investment into the eurozone’s third-largest economy, including in recent months from big US companies such as Apple, Cisco and General Electric.
In addition, the Italian prime minister had once seemed enthusiastic about allowing Uber to compete with taxis on Italian streets. “Uber is a marvellous service. We will deal with it next week,” Mr Renzi said in May 2014, shortly after his rise to power.
More than two years later, however, nothing changed — whereas in other areas, such as labour, banking and political reforms, Mr Renzi has aggressively challenged powerful opponents, such as the trade unions, and prevailed.
“This action by the government is really discouraging,” says Carlo Alberto Carnevale-Maffe’, a professor of strategic management at Milan’s Bocconi University. “The promises of liberalisation and competition are fading away,” he warned.
Italian officials say they are still committed to allowing companies like Uber to operate extensively in Italy, but have merely changed their approach in order to make it more politically palatable.
In fact, although specific liberalising provisions were ditched — including the elimination of an arcane and little enforced requirement for all non-taxi drivers to return to their garage after each service — the bill still calls for broader mobility reforms that could benefit Uber. Among them are respect for the principle of competition, the need for better service, the technological evolution in the sector, and a better matching of supply and demand. So, while Uber might have to wait a bit longer — probably more than six months from now — it is still on the agenda, one Italian official said.
For Uber, however, replacing specific previsions with the promise of a broad reform in the future has been taken as an excuse for delay. “The [competition law] was a good opportunity to modernise the regulatory framework around mobility, for the benefit of everyone in Italy; it’s a missed opportunity,” Uber said.
There may never be a good time to take on the taxi industry in Italy — a lesson Romano Prodi, the former centre-left prime minister, learnt in 2006 when he abandoned a plan to liberalise licences after wildcat strikes by drivers sowed chaos.
Critics say Mr Renzi was initially wary of stoking taxi driver anger for fear that it might tarnish Milan’s 2015 Expo, and this year’s Jubilee Year of Mercy in Rome, called by Pope Francis. Looking ahead, taxi driver protests are the last thing Mr Renzi’s own ruling Democratic party’s leaders want ahead of tough municipal elections to be held in June in the country’s largest cities, including Rome, Milan and Naples.