Uber harnessing popular support for ride-sharing against Katz

Though Uber has operated in Israel since 2014, competing with Gett as an app-based taxi service, the innovation that has made the company a global phenomenon remains outlawed in Israel.

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June 23, 2016 18:42
3 minute read.
Uber

Uber. (photo credit: REUTERS)

 
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“The world is moving forward and Israel trails behind on transportation options.” That’s the message in a petition Uber Israel circulated in both English and Hebrew this week, seeking to catalyze popular support for its ride-sharing option, UberX.

Though Uber has operated in Israel since 2014, competing with Gett as an app-based taxi service, the innovation that has made the company a global phenomenon remains outlawed in Israel.

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UberX allows regular drivers to use their everyday cars as makeshift cabs, often at lower prices than commercial taxis.

Current Israeli regulation, however, bans payments for rides outside the commercial sphere, and Uber Israel has failed to make headway, particularly with Transportation Minister Israel Katz, who vehemently opposes ride-sharing.

“Even after we saw broad agreement in most ministries, we still weren’t able to get a dialogue with the Ministry of Transportation, which I think was mostly driven by political considerations and medallion owners, who are very politically well-connected,” Uber Israel CEO Yoni Greifman told The Jerusalem Post on Thursday.

As in many places, Israel provides a certain number of medallions for cabs, which can be bought and sold as assets.

Typically, medallion-owners rent out the medallions to taxi drivers, who need to affix them to their cabs in order to legally drive. The introduction of ride-sharing would likely reduce the value of the medallions.



Greifman said Katz has refused to even open a dialogue to discuss possible solutions to the issues.

A spokesperson for Katz did not return requests for comments, but Katz has previously made his position clear. In January, after Prime Minister Benjamin Netanyahu met Uber CEO Travis Kalanick at the World Economic Forum in Davos, he demanded to know why the ride-sharing service was not available in Israel. He and Katz got into a shouting match, at which the transportation minister accused him of serving the interests of “foreign tycoons.”

He later told the Knesset Economic Affairs Committee that “if the state wants to put it in place, it should decide and prepare to pull NIS 8 billion to NIS 9b. from its pockets to compensate the cab drivers.” Israeli cab drivers must undergo a lengthy and costly training course in order to obtain their commercial driver’s licenses.

But Greifman says licensed cab drivers will still have advantages, being able to pick up passengers from the street (which Uber drivers cannot do), use public transport lanes, and receive a variety of benefits and subsidies that come with a commercial license.

Rather than target Katz, however, Uber’s email campaign called for supporting a bill backed by Likud MK Amir Ohana that would pave the way for ride-sharing.

“It makes no sense that in a hi-tech superpower, the Start- Up Nation, which is at the forefront of global technology, the branch of public transport is being managed exactly as it was at the state’s founding,” Ohana said upon announcing the bill earlier in June.

The bill, he said, would also include generous compensation for current cab drivers.

Before it moves forward, however, the bill still must pass the Ministerial Committee on Legislation, where Katz could potentially block it.

The timing of the campaign, which has thus picked up over 10,000 petition signatures, comes five years after social protests decrying the high cost of living (and housing in particular) rocked Israel’s streets.

“Transport costs are second only to real estate costs in Israel,” Greifman said. “We can reduce [taxi costs] by an average of 30 percent, and that’s even before the benefits of carpooling,” such as reduced traffic and pollution, he added.

Uber estimates that ride-sharing could save Israel NIS 500 million a year.

Looking ahead, however, great changes are brewing in the transportation sphere around the world. Uber, Google’s parent company Alphabet, and Israel’s own Mobileye are all in the process of developing fully autonomous vehicles.

Mobileye predicts that it will take only five years for fully self-driving cars to hit the roads.

Asked if any of Uber Israel’s efforts are being put toward autonomous vehicle regulation, Greifman says he is focusing on efforts to unlock benefits that are already technologically available.

“I think that not only in Israel but in general, the next revolution is along the lines of driverless cars, but those are not the discussions I have, which are purely about ride-sharing,” he said.

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