Bring Uber to Israel

Although Uber has been operating in Israel since 2014, it works only with taxis. UberX, the cheaper option that is available worldwide and allows users to order a private car.

June 19, 2019 22:18
3 minute read.
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If Bezalel Smotrich, who was appointed Israel’s interim transportation minister on Monday, would like to start off his new position with a bang, he should break Israel’s taxi monopoly and allow Uber to begin operating in the country.

Founded in 2009, Uber is a San Francisco-based multinational transportation network company offering, inter alia, car pooling, peer-to-peer ride-sharing, food delivery, and a bicycle-sharing system. It currently operates in almost 800 metropolitan areas worldwide.

Although Uber has been operating in Israel since 2014, it works only with taxis. UberX, the cheaper option that is available worldwide and allows users to order a private car – not a cab – to drive them, has been banned because current regulations forbid payments for rides offered by private individuals. But this can be changed – and perhaps Smotrich is the right man to do it.

In 2016, Prime Minister Benjamin Netanyahu met Uber co-founder and then-CEO Travis Kalanick in Davos and, upon his return blasted his transportation minister and fellow Likud member, Israel Katz, at the weekly cabinet meeting.

“Why aren’t you promoting competition in the taxi industry?” Netanyahu asked Katz.

“Now you’re talking about competition?” Katz retorted. “My job is not to worry about foreign tycoons but to serve Israeli citizens.”

Facing stiff opposition from Katz – who currently serves as foreign minister – and the powerful taxi union that represents some 25,000 cabbies, Israel banned Uber in November 2017 from carrying out unlicensed ride-sharing operations in the country.

The Tel Aviv District Court ordered the ban less than a month after Uber launched the initiative – which employed regular drivers to transport passengers – following sharp objections by rival taxi app Gett and the taxi union.

The plaintiffs argued that Uber violated an Israeli law barring drivers without a taxi license from accepting fares from passengers. Uber argued that instead of charging a fare, its drivers were simply being reimbursed by passengers for fuel and maintenance.

Uber halted its ride-sharing operations but continued its licensed taxi service in the Tel Aviv area, and its standard taxi-ordering service across the country.

Since then, Uber has struggled to penetrate the Israeli market, dominated by Gett and Waze, which both offer carpooling services. It has also encountered legal hurdles in numerous other countries and was banned in London, for example, after the city’s transportation authority found that it failed to meet safety regulations.

But as anyone can attest who has used Uber during travel abroad, especially in the US, the service makes it much easier, faster and cheaper to get to one’s desired destination. Affordable ride-sharing services would also help non-observant and non-Jewish Israelis as well as tourists, because public transportation is unavailable at night, and on Shabbat and Jewish holidays.

When the Transportation Ministry presented an indictment against Uber Israel CEO Yoni Greifman for operating UberNIGHT – which it claimed was an illegal transportation service – Uber lashed back, saying it provides low-cost and safe rides to passengers, and allows drivers to minimize the cost of driving a private car.

Instead of pandering to haredi parties and the taxi union, Smotrich now has an opportunity to change the status quo in the interest of all Israelis, and allow Uber to operate during the day and night, using its own drivers. He would probably win the support of the prime minister as well as many Israelis who would benefit from the move.

The situation on Israel’s roads is disastrous, and the road work at the entrance to Jerusalem will likely make things worse for the next few years. This would be a good time to open up the roads to greater competition, which would reduce costs and perhaps even fatalities, alleviating congestion and making it easier to get from one part of this small country to another.

Israel could adopt some of the measures implemented in Canada, where Uber drivers are required to undergo police-approved background checks as well as 35 hours of training before getting their licenses.

If the prime minister and his new transportation minister really do have the interests of millions of Israeli commuters at heart, they should now consider legalizing UberX in Israel.

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