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If you’re in a hurry to get from point A to point B, you’re in Paris, and you have a smartphone at hand, you can use a mobile app to request a car to come to your service. But, for the sake of a fairer world, you’ll have to wait at least 15 minutes before you can leave. The French government has mandated so-called VTC carriers [1] to delay picking up customers by exactly that amount to give conventional taxi companies a chance to pick up those same customers. There’s no need to reread the above sentence – you’ve correctly identified the illogicality.

LeCab, Chauffeur-privé, SnapCar, Allocab, Voitures Jaunes and Uber are all startups providing transportation services in Paris. They use mobile apps to connect customers with drivers and track their cars’ arrival on their phones. One of the pioneers in the field, Uber, created this new market by initially providing a luxury transportation service with high-end cars, but gradually expanded its operations with the more affordable UberX, which is essentially a substitute for a standard taxi and payment is made by credit card.

Like any successful innovation in the market, Uber wins users over with its obvious advantages – ordering is easy, the driver's reputation is built based on user ratings, and the cars are new – in short, a pleasant ride. And unregulated.

This is where the key lies. In order for a taxi company to exist in France, it must pay the state a hefty sum for licenses. The number of new licenses is also strictly controlled, meaning officials have tried to erect serious barriers to entry into the market.

However, services like Uber, which fill a new niche, are not yet fully defined in the law. In 2009, their existence was described with several main differences compared to traditional taxi companies. The new type of transport service is characterized by cars without a distinctive plate on the outside and a meter on the inside - the fare is determined in advance. The cars cannot wait for customers on the street or at airports and arrive at a requested address based on the customer's GPS coordinates.

In various publications, members of the French Workers’ Union have complained that it is unfair for a traditional company to pay 230,000 euros in licenses compared to 120 euros for their new competitors [2]. But instead of realizing that they are dealing with an over-regulated and inefficient sector, unions and officials have managed to push through a law and gain 15 minutes over VTC cars. To make the “equality” complete, the rule does not apply in cases where the car is requested by a 4 or 5 star hotel. But even this victory of the absurd does not satisfy the hunger of drivers and unions - they are now lobbying for an additional 15 minutes to restore full justice to their world. They are even resorting to more serious means, as evidenced by several protests and attacks on “bad” Uber cars in Paris at the beginning of this year.

This whole circus is a rather colorful example of the disruption of a traditional monopoly industry. Such disruptions usually happen unexpectedly and develop in several phases [3]:

1. Overconfidence: the stage in which the monopolist considers the newly emerged competitor to be too specialized to pose a serious threat. Instead of trying to change, it ignores the threat;

2. Sharp collapse – the sudden realization that things are changing; usually it is based on drastically deteriorated results for a given period (for example, a quarter), be it in terms of turnover, market share by number of customers or revenues – the moment when the indicators start to decline irrevocably. Similar signs are currently present in Paris – more and more drivers are switching to services such as smart taxis. Gradually, the number of users of the service is also increasing, which leads to new and new migrations of drivers and more users. This merry-go-round starts slowly, but can quickly increase its pace.

3. Too little, too late – already clearly aware of the threat, traditional carriers are trying to change by creating their own interactive methods of communication with the customer or improving service – actions that are years overdue. The other lever with which taxi companies are trying to save their dominant position is lobbying for stronger regulations.

4. Prolonged decline – the above three stages could continue for years, but eventually the traditional industry loses relevance and turns from mainstream to obsolete.

In fact, the problem is not only in France. In the US, some regulatory restrictions are also imposed in various cities such as San Francisco (the birthplace of Uber), New York, Dallas, etc. These uniform reactions of the state are evidence of an inherent quality of the state - it is easier for politicians, and in most cases profitable, to limit and control a newly created market than to allow it to develop based on the relationships between economic entities.

After all, innovation is not the first time in history that it has provoked backlash (from vested interests), and unfortunately, it is unlikely to be the last. Perhaps the day is not far off when Parisians will wait 15 minutes before taking a bite of their McToast to save their local French restaurants. Or they will throw away their sewing machines in an attempt to help seamstresses who sew by hand. If that last example seems too far-fetched to you, it was hardly the case for Barthélemy Thimonnier, a 19th-century French inventor. In 1830, he patented the chainstitch sewing machine. Ten years later, he had a factory with 80 of these machines and a contract with the French government to sew military uniforms. However, the factory was completely destroyed by a group of French seamstresses who feared they would lose their trade. Timonier never recovered and died in poverty. It seems that the ability to think 15 minutes ahead is not new.

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