When Uber first broke onto the Italian scene, those in Italy’s taxi industry were predictably perturbed. For taxi drivers, the prospect of losing business to a competitor fostered fears of a reduced income and a greater risk of unemployment. Taxi drivers organized protests and strikes across the country, and particularly in the capital, Rome.
In 2017, Italian taxi drivers took to the streets to protest the emergence of Uber. “We don’t mind competition, but there isn’t a level playing field,” Paolo Ricci, a protester in front of the prime minister’s office, told Reuters at the time. “These companies don’t have the same constraints as us.”
Ricci further emphasized the wide-ranging and complex government regulations that burdened taxi drivers but didn’t apply to Uber drivers: “We are a public service. We have fixed fares, fixed shifts and have to take any customer, even if it is only a short ride that makes no money. The competition don’t have any of these problems and the government must act.”
Sure enough, later that year, the Court of Rome moved to block Uber in Italy, claiming Uber’s “positions of privilege and monopoly” gave the ride-sharing company an “undue advantage” that threatens to undermine the taxi industry.
But the ban on Uber was short-lived. Less than two months later, the decision was reversed, allowing Uber back on the market. However, while the blanket ban was lifted, a broader regulatory stranglehold retains its grip on Uber. UberPOP, the company’s European name for its cheapest option that enlists private drivers with their personal cars, remains banned because of a Milan court order. Again, “unfair competition” was the listed reason for the ban.
Only UberBlack and UberLux services — which require drivers to be licensed professionals — are permitted in Italy, because they are the legal equivalent of a chauffeur service. Aside from registering to become a taxi driver — an extraordinarily difficult process because of caps on the number of licenses — the only lawful route to offering ride-share services is to become a licensed professional chauffeur. However, that requires a NCC (Noleggio con conducente, or “rental with driver”) license and medallion.
The process to register for an NCC license is expensive and complex. This is not a failure of bureaucratic oversight, but an intentional decision to limit the supply of drivers and provide protection to the drivers already in the industry.
To start, an aspiring ride-share driver must take a six-month course (accompanied by about €900 in fees) followed by an intensive exam. Drivers must also possess a car that meets rigorous qualifications, including being a newer model, having a dark-colored exterior, and tinted windows, among other requirements. Then, and only then, is the driver finally eligible to . . . purchase an NCC medallion.
NCC medallions, issued out by the government, represent yet another intentional barrier to entry, designed to protect the interests of cab drivers and other NCC medallion holders. Each city has a set amount of medallions and rarely increases that supply to meet the demand of professional drivers. Rather, the chosen supply is so low that medallion costs become outrageously expensive. For example, in Rome and Milan, NCC medallions can cost up to €100,000.
This cap is often to the detriment of not only professional drivers unable to afford a medallion (and subsequently unable to work as a professional driver), but also to the commuters who often face a shortage of ride services even though many are willing to supply them.
An unexpected outcome of the rift between the taxi industry and Uber is that it has brought the two to enter into mutually beneficial deals with each other. Uber has enacted a taxi option, which allows users to hail a taxi from the app. This provides Uber with app users and benefits taxis by connecting them with riders. But unlike the Uber app in the United States, which lists a set price, Italian Uber’s taxi function lists prices in a range.
In the summer of 2022, the Italian government attempted to liberalize the ride-sharing industry and allow for more competition within the sector. The country’s lucrative tourism industry offered Italy an excuse to loosen its regulatory grip on taxi alternatives. Italy’s tourism industry — which is continuing to expand in the aftermath of the Covid pandemic — produces a large demand for transportation services. In peak tourist season and in the vicinity of certain popular attractions, the supply of available drivers is often insufficient to meet demand.
Moreover, there is a much higher demand for work in Italy relative to countries such as the United States. Italy’s unemployment rate was 7.28 percent in August 2023. Permitting a greater degree of market competition would have allowed more transportation options for consumers, at lower costs, while also helping to lower Italy’s unemployment rate.
However, the provision was ultimately removed in Italy’s competition bill because of protests, strikes, and organized outbursts from the taxi unions.
Italian Uber will continue to face an enormous barrier-to-entry imposed by the government for the foreseeable future. In the United States, almost any American with a functional car and no criminal record can make money through ride-sharing. The Italian government prohibits this practice as “unfair competition.” But what truly is unfair in this situation? Is the desire of non-taxi drivers to contribute to the ride-share market unfair? Or is it preventing individuals from engaging in such work that is unfair?