A few hundred billion extra forints

The Hungarian government is not looking to ban ride-hailing service Uber but simply wants to ensure that it competes fairly with taxi companies, a development ministry official said this week. The government does not oppose modern transport solutions, János Fónagy said after a meeting with representatives of Uber, the tax and transport authorities and the interior ministry. Now news reports – some of them international – are saying that the government has made a U-turn, that they are flip-floppers about the issue and they are sort of right to do so. The government came up with an idea to somehow try and regulate Uber and other members of the sharing economy, and then sat idly by as everybody who disagrees with the plan was saying that they were planning to ban the company. Even I wrote something along the lines that in a democracy we don’t do that. Then weeks ago the draft of the legislation was released and it became apparent that there are no plans to ban the Uber app. There are plans to have the option to ban the Uber app. Now this might sound like a play on words at first, but it’s not. In fact there is a huge difference between the two. The first is a communist method, the second is a regulatory last resort. I have said it before that just because you’re calling your service something else, it doesn’t necessary become something else. Drivers of Uber pick you up somewhere, drop you off somewhere else and they charge you money for it. Sounds like a taxi service? That’s because it is. Sure, you can rate the driver, the payment is cashless and cheating the system is very difficult, but it’s still a taxi service, so the same – or at least very similar – rules should apply to them. And if these rules are broken continuously, then there should be the option of a ban. But it really should be a last resort and governments around the world should much rather embrace these online-based sharing economy services, especially because of the two things I mentioned before: cashless payment and the difficulties of cheating the system. You know how many rooms are rented near Balaton every summer without an invoice? I don’t, but judging by the countless “Zimmer Frei” signs around the lake I assume that it has to be plenty. Imagine, dear government, if all of these revenues were swiftly moved from the black economy to the taxable income column. The budget would probably have a few hundred billion extra available every year, which then could be spent on everything from purchasing incubators – a favourite of the opposition – to launching a new campaign about the recent reforms. Such as a 21st-century reform of the sharing economy.