Two weeks ago, taxi drivers in Paris staged a violent protest against self-employed Uber drivers and paralyzed the French capital. Similar anti-Uber demonstrations have occurred in the United States and in other European capitals, but only in Paris did events take a violent turn, seemingly confirming Alexis de Tocqueville’s observation that “the French start a revolution when confronted with change, not a reform.” Though crude, the Parisian taxi drivers’ methods seem to have had the intended effect. French police subsequently arrested two Uber executives, charging them, according to the Wall Street Journal, with “enabling taxi-driving by nonprofessional drivers, among other crimes of entrepreneurship.”
Ironically, Uber originated in Paris in 2009, when the company’s founders couldn’t find a taxi after leaving a technology conference called Le Web. Similarly, Airbnb came to life in San Francisco when its founders were unable to find a hotel room after a convention in 2008. The disruptive effect of these firms is reminiscent of the dawn of the industrial revolution, when British textile workers foresaw the destruction of their jobs by new mechanical advances. In 1811, a splinter group known as the Luddites formed in Nottinghamshire and embarked on a campaign of sabotage, attacking mills and destroying labor-saving looms. The British government imprisoned or executed Luddite leaders. The French Canuts (independent weavers) suffered a similar fate in Lyon in 1830 when they attempted to destroy new looms.
Today’s anti-Uber protesters are yesterday’s Luddites. But these two industrial revolutions separated by the centuries are founded on opposing principles. The first turned self-employed textile artisans into drones for huge, capitalist manufacturing companies. The second, involving Uber, Airbnb, and other players in the so-called “sharing economy,” is in fact destroying the factory economy and restoring the artisan ideal. Uber drivers are self-employed entrepreneurs who can work as they see fit. The same goes for homeowners who choose to rent their property to itinerant guests; Airbnb has enabled the public to extract value from housing investments.
Uber’s rise stems from the inability of the traditional taxi industry to keep up with the times. New technology has satisfied consumer demand for taxi rides with superior quality—and at a better price. This new economic revolution also has profound economic consequences. In the services sector, which represents one-third of jobs in developed countries, it’s becoming easier to be a self-employed entrepreneur than an employee.
The historic changes we’re seeing confirm the economic theory that Joseph Schumpeter called “creative destruction”: progress is made by destroying the past, which inevitably means some will lose out. But the victims are not all innocent. Almost all taxi drivers in Paris belong to a private monopoly—G7—which happens to be close to the ruling Socialist party and has taken advantage of its powerful position for 50 years, while making no effort to improve its service. Just like the Canuts in Lyon, today’s Paris cabbies find themselves drowning under an unanticipated technological wave. Here is where government has a role to play, supporting the unemployed, assisting them in vocational retraining, and encouraging them to adapt to the new economy, not try to destroy it.
Unfortunately, European governments have shown little desire to follow this course. French president François Hollande gave a clumsy speech—something of a personal forte—declaring, “Uber must be dismantled and made illegal.” In a country where the rule of law was respected, this sequence would be reversed, with illegality preceding dismantlement. More shocking still, French police arrested Uber’s managers and interrogated them for two days like common criminals. Pending a judicial decision, the company suspended its UberPop service in France, which employed 10,000 voluntary drivers using their own cars to transport 400,000 customers a month. Something similar happened in California. Under pressure from unions, the state labor commission ruled that Uber’s self-employed drivers should be treated like employees, not contractors—which would destroy the company’s business model.
These attacks on Uber and similar companies are all rearguard actions resembling the Luddite campaigns of long ago. And as it did back then, the market will determine the conclusion. Consumers hold the power over these decisions, not judges or governments. Some “liberals” will mourn the advance of the free market and the retreat of the state, but in doing so they should admit that they are standing in the way of material progress and forestalling the death of an outdated world. They have every right to think this way, but resorting to violence is not a right. Revolution is never more than a display of powerlessness—as Tocqueville tried to tell the French.