UberPop vehicle overturned by
French taxi drivers as they clash with riot police.
Sacrebleu!
Uber conquers France
By Nicholas Vinocur
9/30/15, 4:14 PM CET
PARIS — The
sharing economy is mounting a serious challenge to France’s
rule-bound labor tradition, right under the noses of its fearsome
trade unions.
Led by firms like
Uber, Airbnb and the French ride-sharing company BlaBlaCar, the
silent charge is taking on a century of accumulated workplace rights,
a 3,809-page labor code and top-notch job security for a privileged
population of “insiders.”
In France, the labor
law system is a kind of secular religion, built around the sacred
work contract. In essence, the challenge from Uber and its kind is:
This God is dead.
While the number of
people currently involved in the “sharing economy” is tiny
compared to the wider job market, both Uber and Airbnb say France is
their biggest market in continental Europe and still growing fast.
BlaBlaCar has become a global behemoth. And new “sharing” firms
are born nearly every day, each of them a small crack in the existing
system.
Nobody predicts the
cherished long-term “CDI” (literally, Contract of Indeterminate
Duration) will disappear overnight, or at all. Uber and its friends
have met serious opposition, not least from taxi drivers who,
supported by the hardline CGT union, led violent protests in June
against the UberPop car-hire service.
Afterwards, the head
of the CGT’s taxi division refused to condemn assaults against Uber
drivers, which sent two to the hospital for more than a day. “Uber’s
violence is worse than fists,” Karim Asnoun told Europe 1 radio.
Institutions have
also weighed in against the San Francisco-based firm. Earlier this
month the Constitutional Court declared that UberPop, which allows
anyone with a car to charge passengers for trips, was illegal. The
court overruled the firm’s argument that French law violated the
greater principle of a right to free enterprise. Two of the firm’s
directors face charges that include illegally practicing the taxi
profession. On Wednesday, Uber lawyers won a delay of the criminal
trial until February.
But the continued
growth of Uber, whose higher-end UberX service continues to function,
as well as other sharing economy firms, is remarkable in a country
where the question of letting stores open for 12 Sundays per year
instead of five prompted protests and months of bitter political
debate.
For President
François Hollande’s socialist government, which has flagged a
minor overhaul of labor rules for next year, this change is happening
too fast to fight it at every turn. While the state sided with taxis
against UberPop and defends a protective labor model in public, it’s
also encouraging sharing-economy platforms via various incentive
schemes for startups.
“The government is
not going to kill companies that are creating jobs and could tomorrow
become a huge source of economic growth,” said a finance ministry
official who asked not to be named. “At the same time, we need to
preserve guarantees for the majority of workers.”
In other words, the
government does not want to start a fight with unions that remain the
staunchest defenders of the labor model.
“Uber’s
violence is worse than fists” — Karim Asnoun, CGT trade union
leader
So far big unions
have seemed happy to ignore sharing-economy platforms unless they
become visible competitors in a regulated sector, like UberPop with
taxis. In other areas like home repair, where peer-to-peer employment
is growing fast, the competition is less visible because transactions
happen behind closed doors.
But as the sharing
economy grows and impedes more on union turf, the labor lions will
lash out more frequently.
To avoid a showdown,
CFTC union leader Philippe Louis says France’s labor model needs to
be revised in depth. CFTC is the French Confederation of Christian
Workers, a moderate union.
“The peer-to-peer
economy is potentially the greatest new job creator in this country,
but it’s happening outside the confines of our labor system,”
said Louis, whose union has supported most of Hollande’s reform
efforts, unlike the CGT. “Unless we organize our current labor
rules to accommodate the new ways of working, France is going to have
ever more bitter labor disputes … We need to adapt.”
French startup boom
It’s hard to
measure the impact of the sharing economy on France’s job market.
Uber, Airbnb and most such firms are not listed on stock exchanges
and do not have to publish precise business data. Plus, as they are
not technically ‘hiring’ workers, government statistics do not
count them as creating jobs.
Evidence suggests
the sharing economy is one of the labor market’s fastest-expanding
sectors, if not in classical terms of permanent jobs created.
Uber, launched in
France four years ago, has grown faster here than in any other
country in continental Europe, according to the company. It was
fielding 20,000 drivers earlier this year before a court banned its
UberPop service, chopping that number down by half.
Despite the legal
setbacks, Uber says it plans to keep expanding, with some 12,000
drivers ready to hit the road and held up only by red tape, for a
potential total of 22,000 who work with UberX.
The same goes for
Airbnb. The number of ads posted on Airbnb for France has exploded to
150,000 in 2014 from 5,400 four years ago, testifying to one of the
strongest growth patterns in the region.
During its short
lifespan Uber has spawned a slew of French copycats, from
Chauffeur-prive.com to Lecab.fr. Stanislas de Bentzmann, head of the
Croissance Plus pro-growth think tank, estimates that 40,000-50,000
people in France currently earn regular revenue from one online-based
car service or another.
Thousands more make
cash intermittently through the BlaBlaCar carpooling platform, a
service that lets passengers hitch a ride over longer distances in a
carpool in exchange for shared expenses and a small fee for the
driver. One of France’s top startup success stories, the company
was launched in 2006 and now has more than 20 million users around
the world, with a market valuation of more than €1 billion.
In the classified
ads sector, Leboncoin.fr, a French site launched in 2006 that
connects people for services ranging from babysitting to home repair,
but also sales of goods, draws more than 20 million unique visitors
per month and employs 240 people. That ranks it as France’s
sixth-most visited web site, ahead of Yahoo and behind Amazon,
according to a ranking by web-hobbies.com.
“This is a
movement that is bound to become a tidal wave, because when you come
down to it these platforms are good for everyone,” said de
Bentzmann, who is also co-founder of the IT security firm Devoteam.
“It’s positive for consumers, because it improves service, and
it’s positive for people who have been shut out of the job market
for all sorts of reasons, and who are now able to find flexible
employment.”
Asked to explain why
France is such a fruitful market, sharing economy firms point to
monopolies that bottled up demand for services.
“France’s
labor model is failing … Politicians should be preparing for the
next phase now, but they are paralyzed by the idea of losing any
voters” — Stanislas de Bentzmann, co-founder of IT security firm
Devoteam
Legislation
governing the French taxi sector dates back to the era of horses and
carriages and remains tailored for a small, wealthy clientele. In
Paris, there were around 20,000 taxis in 1920, versus just below
18,000 currently, and supply does not adjust to meet demand at peak
hours such as late on Friday or Saturday, making it hard to find a
cab.
Uber and other
sharing-economy firms have simply filled the gap.
“People flocked to
Uber out of spite at taxis, which everyone hates,” said the finance
ministry official. “Unlike other countries where there has always
been a wide array of offerings, in France there was none, so the
uptake was all the more frenzied when an alternative finally arrived
— much like McDonald’s,” he added, referring to the fast-food
chain which has more locations in France than in any other EU country
but Germany.
Uber ‘outsiders’
Uber and other
service providers are able to recruit heavily in France because of
labor market dysfunctions.
While unemployment
remains stuck above 10 percent, the job market is polarized between
insiders — people lucky enough to have scored secure, long-term job
contracts — and outsiders, who bounce from one contract to the next
with little hope of ever breaking into the system.
It’s those
‘outsiders,’ many of whom come from immigrant-heavy suburbs and
say they struggle to find work in the formal job market due to
discrimination, who have joined Uber and other platforms in the
greatest numbers, to the point where Economy Minister Emmanuel Macron
in August described Uber as “one of the biggest employers of young
people” in the greater Paris region.
“Young people from
the suburbs are joining these companies because they have no other
choice, because if you have an Arab-sounding name, it’s very
difficult to break into the formal labor system in France,” said
Abdelmalek Djermoune, head of the Multicultural Party, a small
political formation that presses for U.S.-style affirmative action
for ethnic and religious minorities.
“Kids from housing
projects learn early on that if they want to make it in life, they
should start their own company or head abroad. It just so happens
that these foreign companies have come to France to hire them.”
To be sure, much of
the French population are insiders who want to preserve the labor
tradition with all its trimmings.
When Hollande in
mid-September said that he planned to reform labor rules next year,
he vowed to safeguard the 35-hour week and the labor code. Two years
away from a presidential election, that sort of caution makes sense
in a country where polls in 2013 showed that a majority of young
people aspire to finding ultra-secure work as civil servants.
Hollande has been
bolder on the reform front than Nicolas Sarkozy, the previous
president, who had promised a “rupture” with France’s old ways
in his successful 2007 campaign, and then failed to deliver. But the
socialist leader has avoided symbol-destroying measures that would
provoke fights with trade unions and committed itself to preserving
the labor status quo.
From an electoral
standpoint, that makes sense.
“Even today, most
young people aspire to reaching the famous CDI (long-term job
contract), which is still synonymous with stability, and which in
their minds allows one to embark on projects, start a family and so
on,” said Olivier Galland, a sociologist with the CNRS research
institute who studies young people. “That’s the French model:
Outsiders want to become insiders, young people want to take the
place that their parents occupy.”
However, others
argue that the French labor system has become so dysfunctional,
making people wait until they are 28 on average before obtaining
their first stable job, that it’s losing its power of attraction.
And while Hollande’s government tries to tweak the system at the
margins under pressure from France’s EU partners, new sharing
platforms could simply wash the whole thing away.
“France’s labor
model is… failing,” said de Bentzmann. “Politicians should be
preparing for the next phase now, but they are paralyzed by the idea
of losing any voters, which is only going to make the more transition
more difficult.”
This article was
originally published on POLITICO Pro.
Authors:
Nicholas Vinocur
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