Uber, Airbnb, Amazon: Paris at war with Silicon Valley?

By July 08, 2016
Paris s'éveille

[Inside Track] Paris is joining other cities now rising up against the ‘Uberisation’ of the economy. L’Atelier takes a look here at what seems to be a paradoxical situation for a city that does so much to promote excellence in the field of innovation.

After Uber and Airbnb, Paris City Hall is now taking on Heetch and Amazon. The reasons differ from case to case and are certainly not totally unjustified. A lack of tax transparency, ‘unfair’ competition and clandestine work practices, hurting existing business and threatening the city’s economic stability – the list of grievances is a long one. Moreover, the French capital is not alone in fighting this particular battle. Other major cities across the world – elsewhere in Europe and also in the United States – have been attacking some of these stars of the digital universe whose huge success sometimes depends on legal loopholes and highly ‘flexible’ interpretations of local or national laws.

City authorities feeling threatened

Regular readers may remember that in 2014 the San Francisco city authorities quite simply outlawed the use of the MonkeyParking mobile app created by a group of Italian-born developers. The startup’s initial concept seemed pretty good, enabling thousands of public, city-owned parking spots to be auctioned off to the highest bidder. In May of that year when it launched in San Francisco, the app immediately enjoyed huge popularity with drivers looking to secure a parking spot in town. On average a private parking space sold for between $5 and $20.

This example is a good illustration of how the authorities tend not to regard the ‘Uberisation’ of their revenues very favourably. The exact nature of the income being earned by the people who help to make these new-style businesses a success – drivers, delivery people, or those who rent out their driveways as parking spots – are difficult to assess and above all… to tax. Here we see the classic struggle between the burghers and the barbarians, the incumbents and the disrupters, traditionalists and innovators, whatever the intrinsic merits of the one or the other group’s approach – those who push the boundaries by blithely infringing the current rules, which they see as the price to be paid for building tomorrow’s world, and those who stoutly defend their Maginot line, trying desperately to preserve yesterday’s world, judging rightly or wrongly that it has proved effective.

Paris still the ‘doyenne’ of innovation?

The recent repeated negative reactions of the Paris authorities to Uber-style business ventures in the city might give the impression to outsiders that the city is waging war against the ‘disruptors’ of the digital world and championing the old economy against the new. This is highly regrettable. And to see that the recent strikes called to show opposition to the ‘El Khomri law’ – draft legislation intended to revise France's Labour Code so as to introduce new freedoms and greater flexibility for businesses and workers – have led to train stoppages and rubbish piling up in the streets cannot fail to tarnish the image of the town that is home to the Eiffel Tower. And it is perhaps worth mentioning here that this unrivalled Paris icon was in its time saved by the boom in an innovative new industry – telecommunications.

This negative image is both annoying and counterproductive, given that Paris is by no means lagging behind when it comes to digital initiatives of all kinds. The city hosts a state-of-the-art digital ecosystem comprising dynamic startups and both public and private initiatives, under the leadership, alongside the Mayor of Paris Anne Hidalgo, of Deputy Mayor Jean-Louis Missika, who allies digital dynamism with an environmentally-friendly approach. Private French computer programming college L’Ecole 42 and the soon to be up and running incubator Freyssinet are good examples of this, not forgetting what is currently being done by Paris economic development and innovation agency Paris&Co and its co-director Loïc Dosseur.

Paris will have to decide soon what is important

The Paris authorities might be well advised to adopt a less rigid approach. Without resorting to caricature, we can argue that they could for instance try to distinguish between a new service that meets a definite need – such as Heetch, which takes young people back to suburban neighbourhoods at night, when taxis and other chauffeur-driven vehicles are no longer running, so that they do not have to wait several hours until the first metro or bus starts up again – and businesses that appear to pose a threat to the entire balance of the economy and employment or are clearly designed to get round employment or tax legislation, to the detriment of the community as a whole.

In this respect, it will be interesting to keep an eye on what Amazon is doing. Will delivering fresh produce in under an hour in the centre of the capital be deemed to constitute a flagrant threat to the local economy or be seen as the straightforward play of healthy competition? Or will environmental arguments win the day – i.e. the need to avoid multiple separate deliveries within the city centre that are likely to add to pollution levels? If this argument is paramount, Amazon might well escape censure, given that the US e-commerce giant already has a bicycle courier service up and running in Manhattan.

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