Shlomo Barak
email: shlomo@tagapro.com

The Electron and the Quantum Enigma

Keywords: Permittivity, Wavefunction, Guiding Mechanism

We show that the wavefunction is associated with a real electromagnetic wave generated by the electron and prove the de Broglie conjecture. This wave creates a space permittivity wave that guides the electron and gives the wavefunction its predictive probabilistic nature.

Introduction

In our GeometroDynamic Model of realitythe GDM [START_REF] Barak | On the Essence of Electric Charge, Part 1: Charge as Deformed Space[END_REF], the elastic space is all there is. In this space there are only two elastic wavesa longitudinal wave and a transversal wave. The electron, as other particles, is a complicated wavepacket of these waves [START_REF] Barak | On the Essence of Electric Charge, Part 2: How Charge Curves Space[END_REF], [START_REF] Barak | On the Essence of Gravitation and Inertia, Part 1: Inertia and Free Fall of an Elementary Particle[END_REF]. The electron wavefunction, although it is associated with this wavepacket, does not represent it at all. The wavefunction with the linear momentum p and kinetic energy U k of the electron, gives the probability amplitude of the electron to be in a specific location at a specific time. This wavefunction, as we show, borrows its features from those of the electron wavepacket. Our goal in this paper is to show that the wavefunction is not merely a mathematical tool, but that it is associated with a real electromagnetic wave, generated by the electron, which creates a space permittivity wave. This permittivity wave, which moves ahead at the speed of light, guides the electron and gives the wavefunction its predictive probabilistic nature.

In the double-slit experiment, this electromagnetic wave creates the interference pattern that modulates spatially the permittivity of space. We assume that this pattern is retained for some time, which is determined by a relaxation time not known to us. This time should be at least the transit time for the electron to move from the slit to the screen.

By generating this electromagnetic wave the electron is supposed to lose energy. The mechanism by which this energy is returned to the electron is not clear. Without reading our papers, the contentions and discussion in this paper will be considered an absurdity. This paper complements our paper [START_REF] Bach | Controlled double-slit electron diffraction[END_REF] titled "The Photon and the Quantum Enigma".

The Electron in the GDM

In our GeometroDynamic Model of reality -the GDM [START_REF] Barak | On the Essence of Electric Charge, Part 1: Charge as Deformed Space[END_REF], the elementary charge of the electron rotates around a geometric center with an angular frequency ω = U/ħ = γ U 0 /ħ. For a geometric center at rest γ = 1 , [START_REF] Barak | On the Essence of Electric Charge, Part 2: How Charge Curves Space[END_REF] and in motion γ > 1 , [START_REF] Barak | On the Essence of Gravitation and Inertia, Part 1: Inertia and Free Fall of an Elementary Particle[END_REF].

Thus the electron, even at rest, creates a field that can be decomposed to mainly a steady DC field, and a minute AC alternating electromagnetic field. We take the terms AC (Alternating Current) and DC (Direct Current), from the jargon of electrical engineers. This AC electromagnetic field component alternates at the angular frequency:

ω = U/ ħ (1)
Note that the GDM model of the electron at "rest", [START_REF] Barak | On the Essence of Electric Charge, Part 2: How Charge Curves Space[END_REF], yields the radius and mass of the electron and its anomalous magnetic moment.

Our derivation and calculation of the electron mass gives:

M e = s 2 √2 π( 1+π α) • √G -1 αℏc -3 s = 1 ([s 2 ] = L 2 T -2 ) A dimensionality check: [G -1 ] = ML -3 T 2 [α] = 1 [ℏ] = ML 2 T -1 [c -3 ] = L -3 T 3 Thus: M =[s 2 √G -1 αℏc -3 ]=L 2 T -2 (ML -3 T 2 •ML 2 T -1 •L -3 T 3 ) 1/2 =L 2 T -2 (M 2 L -4 T 4 ) -1/2 =L 2 T -2 ML -2 T 2 =M
M e (calculated) = 0.91036 •10 -27 gr M e (measured) = 0.910938356(11) •10 -27 gr Note also that this model of the electron in motion, [START_REF] Barak | On the Essence of Gravitation and Inertia, Part 1: Inertia and Free Fall of an Elementary Particle[END_REF], yields the Lorentz Transformation; in a similar way to Lorentz.

Space Permittivity

The electromagnetic field around the electron is affected by the vacuum state polarization [START_REF] Barak | The Photon and the Quantum Enigma[END_REF].

This was verified experimentally [START_REF] Eibenberger | Matter-wave interference with particles selected from a molecular library with masses exceeding 10000 amu[END_REF]. Instead of using the term Vacuum State we use the term Space Permittivity, and for the following reason.

The GDM understanding of the Vacuum State is different from the current understanding, in which the Dirac Sea is only one component of the Vacuum State, out of the many ground states of all the fields [START_REF] Barak | The Photon and the Quantum Enigma[END_REF]. We show, [START_REF] Barak | The Photon and the Quantum Enigma[END_REF], [START_REF] Bach | Controlled double-slit electron diffraction[END_REF], that the Dirac Sea is the "sea" of Photoms -Photom Sea, which is the ground state of photons of the electromagnetic field. These photoms are of two types -the positive photom, which carries the oscillating elementary positive charge and the negative photom that carries the oscillating elementary negative charge. In the GDM the Photom Sea is the entire Vacuum State, since the only field that exists is the stress and strain of space, [START_REF] Barak | The Geometrodynamics of Space[END_REF].

However, delving into this subject is not crucial for an understanding of this paper.

Thus, AC components, related to internal motions in the electron, generate waves in space permittivity (a wave of density of the photoms).

In the double-slit experiment, the known interference pattern is related to the AC field generated by the electron moving towards the slits. This interference pattern is a pattern in space permittivity that affects the electron motion by a lateral acceleration that deflects itguides it.

The Doppler Effect causes this field to have a shorter wave-length in front of it. This observation leads us to a derivation of the de Broglie conjecture.

The de Broglie Conjecture

In his Ph.D. thesis, de Broglie conjectured the existence of a periodic phenomenon (internal clock) in the electron, which is of unknown nature and is associated with its energy (in analogy to the photon):

The self-energy of a moving electron is:

U = γU 0 (2)
The angular frequency of the AC component created by the moving electron is thus:

ω = U/ħ = γU 0 /ħ (3)
where ω 0 = U 0 /ħ.

The wavelength of this AC component is, however, shortened by the Doppler Effect and the angular frequency is increased to become ω D . For v << c we get the approximated relationship:

ω D = ω (1+ v/c) (4)
The source of the electrons creates, on average, an AC component which is similar to that of the moving electron due to internal motions. Thus their ω is approximately the same.

If space response is non-linear the AC components, of the source and the moving electron, create new ω D ± ω AC components in front of the moving electron. Of interest to us is the component with the minus sign. Using equation ( 4) we get:

ω D -ω = U/ħ (v/c) = Mc 2 /ħ (v/c) = (M v/ħ) c = (p/ħ) c .
The frequency of this component is: υ = (ω D -ω)/2π = (p/h)c and since λυ = c the wavelength of this component is:

λ = p/h de Broglie Wavelength (5)
This is, in a way, a proof of the conjecture.

This wave moves at the speed of light, enters the slits in the interference experiment and creates the spatial interference pattern between the slits and the screen.

5 On the "Wavefunction" Spread in Space and its Energy

The Spread

In a typical experimental setup with electrons [START_REF] Bach | Controlled double-slit electron diffraction[END_REF]:

An
Hence the momentum p = M e v, using M e and (2), is: p = 10 -18 gr cm sec -1

The de Broglie wavelength:

λ = h/p (h Planck constant) (4) is:
λ ~ 6•10 -9 cm (5)

Thus the number of λ units that can enter a slit is:

(Slit width / λ) = 5•10 -6 cm/ 6•10 -9 cm ~ 10 3 (6)

The number of λ units between the slits is:

(Slit separation / λ) = 2.8•10 -5 cm/6•10 -9 cm ~ 5•10 3 [START_REF] Barak | The Geometrodynamics of Space[END_REF] To create the interference pattern a wavefunction created by a particle must spread in space around it to cover both slits. This zone of space should contain many orders of magnitude of λ units, and its linear dimension is determined by the boundary at which the energy density of the wave equals the energy density of the vacuum energy density (fluctuations).

On the Energy

A quant of energy of the wave in the example above, using [START_REF] Eibenberger | Matter-wave interference with particles selected from a molecular library with masses exceeding 10000 amu[END_REF], is:

U = hυ = hc/λ ~ 3•10 -8 erg ( 8
)
This energy is about 0.03 times the self-energy of the electron, which is ~ 10 -6 erg.

We ignore the possibility that in creating the wave the particle exchanges (emits and absorbs) such amounts, (8), of energy.

The Vacuum State as a Dielectric Fluid 6.1 A Dielectric Fluid

In quantum field theory, the vacuum state is the quantum state with the lowest possible energy for each and every physical field. Additional related terms for the vacuum state are Zero-point Energy and Zero-point Fluctuations.

In our GeometroDynamic Model of realitythe GDM [START_REF] Barak | The Geometrodynamics of Space[END_REF] we consider space to be the only fundamental entity that exists. We show that the vacuum state contains only the ground state space quantized vibrations, which are the ground state photons -the photoms [START_REF] Barak | The Photon and the Quantum Enigma[END_REF].

We also show, [START_REF] Barak | The Graviton[END_REF], that the ground state gravitonsthe gravitoms, are identical to the photoms. Since the core of the positive and the negative photoms are the oscillating bivalent elementary charges [START_REF] Barak | The Photon and the Quantum Enigma[END_REF] the GDM ground state can be looked upon as the Dirac Sea [START_REF] Barak | The Photon and the Quantum Enigma[END_REF]. This Dirac Sea is a dielectric fluid responsible for space polarization [START_REF] Milonni | The Quantum Vacuum[END_REF].

The Dielectric Fluid Patterning by the Wavefunction

The Wavefunction being an electromagnetic wave creates density waves of photoms, which are actually waves of a dielectric fluid. The interference behind the slits creates spatial patterning of the dielectric fluid. This is a spatial interference pattern of permittivity.

Similar ideas have already appeared in the literature, see S.

The Guidance Mechanism

In a double-slit experiment the electron travels through one slit. The AC waves, created by the moving electron and the electrons in the source, pass through both slits and interfere. As the electron exits a single slit, the direction it travels is altered by the permittivity wave, created by the interference. The electron is attracted to space zones with larger concentrations of photoms [START_REF] Barak | On the Essence of Gravitation and Inertia, Part 1: Inertia and Free Fall of an Elementary Particle[END_REF]. This attraction, by the permittivity wave, is the guidance mechanism, see Section 8.

In the year 2011 it was shown [START_REF] Steinberg | [END_REF] in a "Weak-Experiment" [17] that a single photon, in the Double-Slit experiment, goes all the way from the source to the screen through only one slit.

The photon follows a trajectory known as the D. Bohm trajectory [18].

Experiments with other elementary particles, atoms, molecules and even microscopic bodies should give similar results.

The Guiding Mechanism -Numerical Estimations

In the experiment presented in Section 3, the electron moves a distance d ~30cm from the slits to the screen, with the velocity: v ~ 10 9 cm sec -1 ( ~ 0.03c )

The time to cross the distance d is:

t = d/v = 3•10 -8 sec (13)
In the following example, the electron is deflected by ~1mrad in the zone between the slits and the screen. In this case the electron hits the screen perpendicular to the original direction of motion, a distance d'= 0.03cm. The central acceleration needed to cause this deflection is:

g = 2 •d'/t 2 = 2•0.03/9•10 -16 ~ 6•10 13 cm sec -2 (14)
This acceleration, [START_REF] Dürr | Bohmian-Mechanics[END_REF], should be caused by an induced positive image of the electron in the anisotropic permittivity sea around it. This anisotropy is created by the interference of the relevant waves coming from the slits. The force between the created image, which is of the same absolute elementary charge, for a distance d''< 0.003cm from the electron is:

F = Q 2 /d'' 2 ~ 2.5•10 -14 dyn (15)
And the acceleration is:

F/M = 2.5•10 -14 /10 -27 = 2.5•10 13 cm sec -2 (16)

The calculated accelerations ( 14) and ( 16) agree.

Thus a change in the permittivity causes a major central acceleration that deflects the electron.

In atomic orbits the AC wave propagation forwards and backwards creates a standing wave.

The guiding mechanism of this wave keeps the electron stable in its orbit.

Double-Slit Experiments with Large Neutral Molecules

Interference has been demonstrated with photons, electrons, neutrons, atoms and large neutral molecules. An example for a large molecule is the soccer-ball-shaped Fullerene molecule with 60 carbon atoms. Another example is an organic molecule with 810 atoms in a single particle exceeding a mass of 10000 amu [START_REF] Brady | Why bouncing droplets are a pretty good model of quantum mechanics[END_REF]. This subject, however, is out of the scope of this paper.

The Electron Wave Function

We consider the Electron Wave Function to be related to the Permittivity Wave created by the electron (Section 4): ψ = Acos(2π/λ -ωt) with 2π/λ = 2πp/h = k (p the electron momentum)

The angular frequency is: ω = ħω/ħ = U/ ħ .

U is the quant of energy of the wavy permittivity field. It is, however, related to the kinetic energy of the electron, as we show in Section 4.

We express the wave function in a complex form, as:

ψ = A 𝑒 i(kx-ωt)
The momentum connection is: ∂ψ/𝜕x = ik ψ = ip/ħ ψ (

The energy connection is: ∂ψ/𝜕t = -iω ψ = -iU/ħ ψ (18) When an operation on a function returns the function times a constant, that constant is called an eigenvalue, and the function is an eigenfunction.

For the electron:

Summary

Delving into Quantum Mechanics (QM), a theory with "point-like and structureless" photons and electrons cannot yield a resolution of its enigma. To solve the QM enigma, as we have done, requires good models of the photon, the electron and the vacuum state

  electron beam with energy of 600 eV was generated with a thermionic tungsten filament and several electrostatic lenses. … …The individual slits are 50 nm (5•10 -6 cm) wide ׳ 4 μm tall with a 150 nm support structure midway along its height, and separated by 280 nm (2.8•10 -5 cm). …. U = 600 eV = 600•1.6•10 -12 erg ~ 10 -9 erg (1) Since U = 1/2 M e v 2 , (1) and M e = 10 -27 gr give: v ~ 10 9 cm sec -1 ( ~ 0.03c )

  Colin and W. Struyve, [12]: A Dirac sea pilot-wave model for quantum field theory (2007) The Dirac sea pilot-wave model can be seen as a possible continuum generalization of a lattice model by Bell. It can also be seen as a development and generalization of the ideas by Bohm, Hiley and Kaloyerou, who also suggested the use of the Dirac Sea for the development of a pilot-wave model for quantum electrodynamics.

  p operator = -iħ 𝜕/∂x U p = ½ Mv 2 = p 2 /2M For a wave (U = U w ): U operator = iħ 𝜕/𝜕t U = ħω , but λ• υ = h/p • U/h = UFor our electron U = Mvc = 10 -27 •0.03c•c = 3•10 -8 erg, ~30 times smaller than the self-energy of the electron: U e ~ 0.8•10 -6 erg .

Acknowledgements

We would like to thank Mr. Roger M. Kaye for his linguistic contribution and technical assistance.


Past and present business--models

1.

The extreme diversity of the taxi industry's existing business-models that can be seen from one country to another and even from one city to another is not due primarily to technical or economic fundamentals. It is essentially the result of local political will to structure the taxi industry, to shape the city, or to regulate labour relations.

Simple economic constraints

2.

From the origin, the economic constraints are simple: to transport people, it was enough to have a horse, a carriage and a coachman. The horse and the horse--drawn carriage demanded an investment of capital. On the other hand, driving a horse, as driving a car today, is an extremely low qualified job and it was easy to find candidates for this function. From the outset, there were people willing to invest in this industry and to hire other people to drive their carriages. But unlike a worker employed in a workshop, the coachman exercises his trade far from any control. Moreover, it is he who receives directly the amount of the fares.

3.

For this reason, the relationship between the owner of the vehicle and his coachman was less frequently that of an employer to a wage--earner and rather that of an independent contractor leasing the vehicle from its owner: paying a set amount for each shift and taking home fares and tips in excess of the lease fee.

Many (conflicting) policy objectives

4.

Very quickly, for reasons that will be discussed in the next section about regulation, it appeared necessary to regulate the activity. This regulation has been achieved by limiting the number of vehicles. Each vehicle was therefore assigned a license. The owner of the vehicle was thus able to rent both the vehicle and the license to the coachmen. From this point forward, it is essentially the evolution of regulation that has shaped the industry. Depending on how new licenses were granted, in different cities, the industry was more or less concentrated. Sometimes, as in Paris under Napoleon III, the public authorities may choose to give a monopoly to a single enterprise over the whole city. Conversely, at other times or in other cities, as a way to prevent the license owners from exploiting their drivers, the government has chosen to promote small scale enterprises by granting a single license to each coachman, resulting in an extremely fragmented industry with thousands of owner--operated cabs. Regulation can also induce these coachmen to found cooperatives as in the nineteenth century London where only cooperatives or cab companies were allowed to access the railway stations, or, as in the second half of the twentieth century, to have access to the radio frequencies that make it possible to benefit from radio--dispatch.

5.

The Table 1 below, adapted from Schaller [2015, p.12] summarizes the different functions that integrated companies or fleets, dispatch bases, licence owners and drivers may take on. As highlighted in the table, fleets, as integrated companies, may perform a full range of functions from recruiting and training drivers to maintaining vehicles. Some of these functions may be taken by dispatch companies that, under this typology, dispatch but do not own taxicab vehicles. Separately, licence owners may recruit drivers and own vehicles but without driving them themselves. And drivers, of course, drive and sometimes own and maintain the vehicle. Schaller [2015, p.12] 6.

recruitment X X X Driver training X X X Dispatch X X Record keeping X X X X Vehicle ownership X X X Vehicle maintenance X X X Source: adapted from
The licence owners rent the licences they own only when these licences have a marketable value, i.e. when regulation caps their number and allows their rental.

A sudden multifaceted revolution

Three major changes in the taxi industry 7.

Three major changes have recently shaken these various business models and upset the taxi industry. 8.

First comes a technology revolution with the smartphone. Smartphones allow geo--location of both customers and drivers, together with instant data transmission and lots of added services (maps, time, communication, etc.). This technology revolution absolutely broke all the old ways of handling the taxi business. 9.

A second revolution is the network economy as exemplified by Google, Facebook, Amazon, etc. One cannot ignore them and have to pass through those companies to access to a worldwide customer base or merely to clients whose first reflex is to go through their networks when they are looking for any type of service. 10.

The third revolution is the venture capital economy. It is now possible to raise funds to develop one's company with the objective to sell it to another bigger company without any notion of short--term profitability; whereas traditional taxi companies cannot afford to lose money for two or three years in a row, if so, they would disappear.

Far reaching consequences

11.

The consequences of these changes are far reaching. The first consequence is that technological entrance barriers have been removed:

• No need for any costly equipment on board in each vehicle • No need to compete for limited radio frequencies • And the new technology is scalable 12.

The Table 2 below shows how these changes translate into comparative advantage for the new competitors. The second consequence is that new competitors have no short-term profitability constraints. Some venture capitalists believe there is a global taxi market in which the winner takes all, i.e. that they will later raise the prices and will be very profitable. So, the new competitors use scalable technology and can afford to develop at the international level. 14.

The third consequence is that the taxi industry can no longer operate as an independent business without close links to other networks. A growing part of the business will be intermediated because in this network economy people connect to Facebook, to TripAdvisor, to AirBnB, or to Google Maps. So every day people use their smartphone to connect to a big hub and tomorrow they will also, not in all the cases, book their taxi through Google Maps or through TripAdvisor or through any of the services. Because a taxi is now seen as a commodity, not as a full dedicated service. So, a growing part of this business, maybe one third, will escape to traditional channels of booking.

Future business--models

15.

Sooner or later, the anti--competitive regulations that still protect old fashion taxi operators will probably disappear, as they have done in the Netherlands, in Sweden or in New York. The taxi industry will have to adapt to this new landscape.

Strengths and weaknesses of the old industry

16.

Strategies to adapt will depend on the strengths and weaknesses of each one, according to the type of company. For this we can use the typology outlined by Schaller [2015, p.12] and presented in Table 1. 17.

First come the integrated companies that run their drivers' recruitment and training, their dispatch and record keeping and own the vehicles they maintain. Those companies are not very agile, and not enough focused on the new assets because they are focused on maintaining the vehicles, educating the drivers, and they are also very low skilled about marketing or about networking. 18.

In the second category of companies are the booking platform companies or the radio--dispatch companies. They rather run all technologies because they are focused on hardware, on--board hardware in the vehicles and in the telephone call centres. Most of them have very little know--how on marketing or on CRM (Customer Relationship Management) and none on social networks. 19.

In the third category are the independent licence owners or the drivers who rent their license and their vehicle. With the new landscape, they are tempted to have not only one supplier of fares, like before, but to work with all the new suppliers. 20.

These three characteristics are weaknesses of the old industry. But the old industry also has one important strength, which is the quality control. These old companies succeeded in having a strong relationship with the driver based on trust and are used not only to put in relation the customer and the driver, but also to manage the quality of the whole service.

A business model and three (complementary) strategies

21.

What are the options and what are the new business models for a new taxi industry? 22.

A first strategy would be for existing companies to focus on their core business and to devolve the rest to dedicated business units. For example, if a company is focused on supplying vehicles to the taxi industry, this is its core business. It just has to manage to buy vehicles and to rent them to taxi drivers. If it is a dispatch company, it would dedicate a business unit or create a subsidiary focused on controlling the networks and developing new skills about community management, about customer relationship, about digital communication, pricing, yield management, etc. This dedicated unit would not have to manage the staff of the call centre or to cater the on--board equipment.

23.

One example is given by G7 in Paris. It has founded dedicated business units or subsidiary companies for each purpose, e.g., Serenis for the call centre, Taxirama for supplying vehicles to the drivers or G7--Booking for online booking.

24.

A second and complementary strategy is for several taxi companies in different countries to jointly build some organization with a strong network and a strong brand. Its purpose would be to become a valuable potential partner for Google, or for Amazon, or for TripAdvisor. This organization would then be capable to negotiate with the global network companies to be present in their applications, for example, in Google Map itinerary planning application, or in all the travel agency planning applications, e.g. through Amadeus. However, this entails a high level of coordination between companies in different countries to develop a common brand, i.e. a common name and logo, and possibly a body colour.

25.

A third element to this strategy is for this international organization of taxi companies to use a common app with constantly updated services and capabilities, able to compete with the sophisticated apps of the other global Commercial Transport Intermediaries2 (CTIs). And behind this app, it is important for the common platform to analyse the big data produced for back office research.

Business models and access to scarce resources

26.

In every industry, firms compete for what economists call scarce resources, i.e. resources that have a cost. In the taxi business, one can identify four resources: (i) the customer base, (ii) the drivers, (iii) the vehicles and (iv) space.

27.

For the purpose of the analysis, the customer base can be segmented in four components: (i) the linked customers, i.e. the ones that are familiar with smartphones, internet, and pay with bank cards, (ii) the disconnected ones, by choice if they do not want to be traced or by constraint if they have no smartphone or bank card, (iii) the tourist unfamiliar with the local services available and (iv) the subsidized customers, i.e. those whose mobility is encouraged by public agencies. In this last segment one finds the disabled, the seated patients, the elderly, the school children, and people for whom providing high capacity scheduled public transport would be too expensive (e.g. in low density areas). 28.

As mentioned earlier, drivers are not necessarily a scarce resource, unless taxi companies need trusted drivers or, in the case of subsidized transport, drivers with special training to cater for the disabled or the children or the seated patients.

29.

Vehicles are no longer a scarce resource except if their number is capped for some reason. One reason might be to ration space. 30.

Space is definitely a scarce resource in urban areas and in specific places of high demand like airports, train stations, or stadiums after a game. Historically one main reason for capping the supply of cabs was to control congestion in the streets and in public places. More recently, urban congestion linked to the rapid development of the vehicle fleets working with the recent app--based CTIs has been highlighted by the incumbent taxi services in New York, London and Paris as an argument for requesting a moratorium. 31.

Depending on the resources available to them, taxi companies will favour different business models.

32.

In cities where capping is still considered as the best way to fight congestion3 , licence owners will keep a comparative advantage vis--à--vis global CTIs: they will enjoy a priority access to airports and train stations as well as a monopoly on the street hailing market. And of course nothing prevents them to also compete in the e--hailing market, provided that in this market they are no longer compelled to use a taximeter with regulated prices. In this setting the "integrated companies" business model will be able to tap on the tech refractory, on the tourists arriving at airports and even on the tech savvy if the companies join an app--based platform. These companies generally also build trust relationships with their drivers; this could be a competitive advantage when bidding for subsidized transport services tenders where trust and reliability are a key criterion. 33.

To the opposite, this business model may not survive if cities, in lieu of capping, resort to some type of efficient congestion pricing to mitigate congestion and if airports prefer to auction curb space at the arrival piers instead of granting access to metered taxis only. 34.

In this case, the dominant business model might be the one of the global app--based CTI, i.e. the "two--sided market" operator that sells rides to passengers and, at the same time sells passenger--rides to drivers. These firms maximize their total profit, i.e., the interlinked profits from both sides, by adjusting its price levels, but more importantly by adopting a pricing structure that balances the relative demands of both sides.

35.

In major cities around the world, tourists constitute a substantial part of the taxi market for two reasons. First, because when they arrive at the airport or at the train station with their luggage, the taxi is by far the most comfortable transport mode. Then, once in the city, tourists may not be familiar to the public transport network and the intricacies of its fare system. The easiest solution is to take a taxi, preferably a taxi you can trust because it is the one proposed by your TripAdvisor app or because it belongs to the same brand you know at home.

36.

This gives the global CTIs a competitive advantage that can be even stronger if the airport restricts its access to only two or three taxi brands, selected by some sort of tendering process, as a way to streamline traffic and save parking space.

37.

As we mentioned earlier, building an international brand and buying a customer base is a huge investment. Markets whose entry requires a huge investment are prone to natural monopoly or oligopoly. In this business model, as we will explain in the "regulation" section, a common practice for the global CTI is to try to dislodge competitors locally by subsidizing both customers and drivers in one city with the profits their draw from a monopoly position already gained in an other city.

38.

A global app--based CTI enjoying a monopoly or a duopoly position with the tech savvy customers in a one city, could also tap on, or even capture, the local niche market of the tech refractory by installing ticket machines where customers can book a ride, pay it, even in cash, and get a ticket with a code number they will hand to the driver coming to pick them up. 39.

With no other government interventions than the regulations promoting safety, the taxi industry might well become an industry dominated by a few global CTIs, and the prevailing business model, the one of two--sided market global giants.

Subsidized transport and business models 40.

In most countries of Europe, to minimize social exclusion, different levels of government, from municipal to national, subsidize demand responsive transportation (DRT) for different target groups, e.g.: the handicapped, the elderly, and even for the residents of low density areas, where scheduled bus transportation would be too expensive to provide because of low demand. 41.

As we will see in the "Travel--chains" section, this market will go on expanding, in particular because of an aging population. In most countries, taxis are already very much involved in these subsidized markets, e.g. in France it represent 80 to 90% of the taxis' turnover outside the major cities, where it is also a place of great profligate waste and mismanagement when it concerns the seated patients.

42.

What are the business models of the taxi companies operating in these markets? It depends very much on the way local authorities coordinate among themselves and how they prefer to organize the system and tender it to transport operators.

43.

At one extreme is the seated patient system in France. When the patient has a prescription from his doctor, for example for a radio therapy 300 km from his home, he chooses his preferred taxi that will come pick him up, bring him to the hospital, wait (with the taximeter on) until the end of the therapy and bring him back home. This trip will be entirely paid by the Sécurité sociale (the national health insurance) according to the taximeter fare at the prevailing rate with an abatement of around 10%. French taxi operators have opposed any attempt of the Sécurité sociale to rationalize the system. Such an expensive system favours the small taxi firm next door which business model is that of a single licence owner driving his vehicle. 44.

At the other extreme, in terms of value for money or efficiency, are the cases of Sweden and Denmark. In these two countries, the responsibilities for providing subsidized transport are obligations of local bodies only, at the county and municipal levels. In several counties, the jurisdictions and agencies have been able to agree to pool their needs and create a single authority or organisation in charge of making calls for tender, selecting the carriers, ensuring the logistics system (e.g. planning the route of the assigned vehicle to pickup as many passengers as possible on the way), paying the carriers, and charging the different agencies (e.g. hospitals, schools, municipalities) of the consortium the transportation costs of the people to whom they must provide mobility. In Denmark, this authority is called FlexDanmark and it manages the Flextrafik system, a demand responsive public transport [Cazemier et al. 2012].

45.

The most interesting part of the system is its tendering process where the transport operators bid a price per minute and advertise a time window during which the vehicle will be available. When it gets a booking for a trip, the software selects the vehicle with the lowest cost. This can be a vehicle from the operator who offered the lowest price per minute, but it can also be the vehicle whose home base is the closest to the starting point of the journey, or even a vehicle already assigned that the change in route will not too much delay the travellers already in the vehicle and will be cheaper than the use of an empty vehicle, coming from farther away or more expensive by the minute.

46.

With such a system every bidding firm, whichever its size, can be contracted and get assignments. This allows a wide variety of business models, from the large taxi company with part of its vehicle fleet specially equipped for handling wheelchairs to medium size companies and even to single--car independent taxi driver. 47.

A similar system exists in the province of Gelderland in the Netherlands, but in most of the other provinces of the country, what is put for tender is the whole service lumped together from the call centre to the actual transport, with most contracts having a term of 3--5 years. This system favours big businesses: about half of the contracts are won by Connexxion the largest public transport bus company in the Netherlands, which sub--contracted about 60% of it to smaller taxi companies.

48.

When subsidized transport services are tendered, traditional taxi companies, big or small, together with their respective business models, probably have a competitive advantage because they can commit themselves in the long--term, may be more reliable and have a better control on quality. 49.

However, tendering is not the only way to subsidize transport. Another way is to subsidize the traveller directly as with the London Taxicard scheme that provides subsidised door--to--door journeys in licensed taxis and private hire vehicles for London residents who have serious mobility or visual impairments. Here, if the subsidy is high enough to make it a profitable market, even global app--based CTI might find it worth it to dispatch adapted vehicles and encourage they drivers to buy them or rent them. An example in given by UberASSIST that requires its "top driver--partners" to undergo specific training on the necessary knowledge and safety requirements of people with different needs and can accommodate folding wheelchairs, walkers and scooters, although in most cases UberASSIST vehicles do not have accessible ramps or lifts.

Conclusion

50.

What are the business models of the taxi of the future? 51.

As in the past, they will very much depend on the policies local governments will design to ensure mobility and inclusion for their citizens, to allocate public space and to ensure fair competition as a means to get the best mobility for different segments of the market at the least price. 52.

The prevailing business--model for the taxi of the future might well be the one recently brought in by the global app--based CTIs. For this business model, the unscheduled door--to--door passenger transport is a two--sided market. Their competitive advantage stems from their ability to adjust prices simultaneously on both sides and from the strong brand--name at the global scale massive venture capital funds have allowed them to build. These strong brands make them an inevitable staple of the services provided by the giants of the networks economy. To be present in theses markets, traditional taxi companies must adopt the same business model, building a brand--name for an international consortium of taxi companies using a common app.

53.

Another important market in the future will be the subsidized unscheduled door--to--door passenger transport. Since subsidies come from local governments, local taxi firms have a role to play. This is not a two--sided market adjusted in real time. For its most part, it is a contract market tendered for periods ranging from one to several years. In these markets, competitive advantage stems from trust, reliability and capacity to manage a diversified fleet and to optimize routes. Depending on the specificities of the market being tendered, traditional taxi firms with their respective business models will be able to thrive.

Table 1 -Taxi operational functions and responsibilities

 1

	Integrated companies or fleets	Booking platform companies	Licence owners	Drivers
	Driver

Table 2 -Comparative advantage

 2

		Traditional taxi	App--based platforms	Comparative advantage
	Labour	Generally full time	Flexible and part time	Better adapted to fluctuating demand
		Taxi meter,
	Vehicle equipment	rooftop sign,	Smartphone	Cheaper
		colour
	Dispatch	Call centre	Server	Cheaper and faster
	Optimization	Drivers experience	Algorithms	More efficient and surge pricing
	13.

Discussion paper commissioned by the International Road Union (IRU) for the Taxi of the Future Reflection Group, together with two other papers: "What regulation for the taxi of the future?" and "Travel--chains / mode choice & the taxi of the future"

"Commercial Transport Intermediary" (CTI) are defined as follows "Digital intermediaries or marketplaces that canvass or solicit for a passenger to connect with a licensed professional driver, meeting the requirements of the relevant jurisdiction and operating a validly registered vehicle under the laws of the relevant jurisdiction."

Even if it only is an alibi


Introduction

1.

Of all the variables that will shape the taxi of the future, the less predictable is regulation. The technology is with us already, we know the actors and have a good vision of their strategies but most of what will happen in the coming decades hinges upon the way regulators will define how all this will interplay.

2.

Regulation always lags behind technology. Most of the features of the taxi service of today are framed by regulations issued decades and even centuries ago. And today regulators are still struggling to accommodate technologies that appeared almost a decade ago. For this reason, instead of discussing regulations addressing the driverless car or the flying taxi, we chose to focus on the near future i.e., catching up on the regulatory backlog without hampering the future development of unscheduled door--to--door passenger transport. As noted in the last One Hundred Year Study on Artificial Intelligence Report [Stanford, 2016, p.24], "although future cars will be smarter and drones will be available widely, it is unlikely that by 2030 we will have widely adopted transportation vehicles that look and function differently than the ones we have today."

Regulation and technical change

3.

As far back as we can look in the past, the core of taxi2 regulation has always been based on economic principles. And each time this core regulation was adjusted, these adjustments were motivated by social or by technological revolutions. 4.

The first taxicabs appeared in the 17 th century when a sizable enough urban middle--class started to be able to afford renting the horse--drawn vehicles they could not afford to own. 5.

Soon a clear distinction between two markets for these new services appeared: a "street market" on the one hand and a "contract" market on the other hand. This distinction came from the fact that taxis plying in the street market needed to be regulated in prices, in quality and in quantity, whereas there was no need for specific regulation in the contract market. 6.

Prices in the street market needed to be regulated to avoid lengthy bargaining and haggling in the streets. Once the prices are set you need to define a quality standard. Since both prices and quality need to be enforced, to reduce the cost of enforcement, it was necessary to prevent too easy entry in and exit from the market, thus some form of capping was applied to introduce some viscosity in the access to the trade. Capping also permitted to mitigate congestion at some places of high demand.

7.

The first technical revolution happened in the street market at the turn of the 20 th century with the advent of the taximeter combining time and distance. Almost everywhere a new regulation replaced the three centuries old zone--to--zone or hourly pricing systems by metered fares systems.

8.

The second technical revolution happened in the contract market in the 1970s when middle class households got access to the telephone and when simultaneously vehicles could be equipped with affordable radio--dispatch. This made instant contracting possible and blurred the distinction between the two markets. Regulators reacted very differently from one country or city to the other. At one extreme, New York City forbade the Yellow cabs to use radio dispatch that thus became a liveries' monopoly. At the other extreme, France prohibited the private hire vehicles (Petite Remises) from using radio dispatch and made it a monopoly of the street taxis. 9.

The third technical revolution happened less than a decade ago when GPS became a common feature of mobile phones. It made it possible to e--hail a ride from the sidewalk, further blurring the distinction between street and contract markets. Most regulators were caught by surprise and are still struggling to cope with it. We think this is the issue that should be addressed by our reflexion group now. 10.

A fourth technical revolution is under way with the driverless cars but we think it is definitely not a regulatory priority for the taxi trade.

Why regulate?

11.

Regulating unscheduled door--to--door passenger transport goes after several objectives. First comes safety, safety for the passengers of the vehicle, for the driver and for the other road users. A second objective is to ensure fair competition between the various providers of the taxi services. Fair competition is a prerequisite to get the best services at the least cost, but it also includes fair conditions for drivers. Then comes mitigating the externalities produced by road use, e.g. local and global pollution, noise, congestion, etc. 12.

One role of government is to promote social inclusion. In our modern societies shaped by the automobile, transport has become a basic human need from which some people happen to be excluded. What first comes to mind in this regard is access to the vehicles and services for all, including persons with disabilities and the elderly. But inclusion also entails providing mobility when and where scheduled public transport is not available (e.g. at night, in low density areas, etc.).

Here the taxis can play a major role. They can be brought in by regulation, but not necessarily. In some cases, fiscal incentives and subsidies may be more cost effective, as we will see later on. 13.

At the heart of the technical revolution mentioned above is what has been dubbed "big data". Commercial Transport Intermediaries3 (CTI) collect huge amounts of data on their clients, on their drivers, on transport demand, on traffic conditions, etc. This is both a threat and an opportunity. The threat is a threat to privacy that needs to be regulated. The opportunity is that all this information could be very valuable for the government agencies in charge of mobility management and city planning. Here, regulation can compel the CTIs to make some of their data available to specific public agencies.

What should be regulated?

14.

From one country to another, from one city to another, the taxi industry can follow various business models. Drivers can be independent operators or work for taxi companies. Vehicles can belong to the drivers, or to taxi companies, or be rented by both from specialized firms. Taxi companies can manage their own dispatch centres or provide services to larger CTIs. 15.

To regulate the taxi trade, regulators basically target at three components of the system: (i) the driver, (ii) the vehicle, and (iii) the Commercial Transport Intermediary. 16.

The smartphone revolution compels regulators to revise existing regulations addressing drivers and vehicles and to design new ones for the app--based CTIs. The taxi trade economic and social issues requiring regulation are presented in Table 1 below, by objective and by target. These regulations should apply to the whole taxi trade. Specific cases (airport pickup areas, non bank card payment, etc.) will be discussed further below. The pickup and drop--off location names (i.e. postal address) •

The pickup and drop--off longitudes and latitudes 18.

It could be noted that similar data are collected by the on--board computers that are required to equip all street and contract taxis in the Netherlands.

19.

As we will see in the following sections, for most of the proposed regulations, enforcement would be much more efficient if the regulator has automatic access to these data.

The driver

20.

The qualification requirements for the drivers are a very much debated and politically sensitive issue. One must be very careful to distinguish between what is useful for the riders' safety and what is more targeted to prevent newcomers to compete with the established taxis as exemplified in the French case.

21.

The London regulation could be considered as a benchmark to this regard. As stated in its General Guidance for licensed private hire vehicle4 (PHV) drivers [TfL, 2011], Transport for London (TfL) may refuse to grant a PHV driver's licence if the "applicant fails to satisfy TfL that: he is at least 21 years of age; he has held a full driving licence for at least 3 years, and; he is of good character and is fit to act as a PHV driver." 22.

The criterion for "good character" is determined mainly on the applicant's conviction history (which is regarded as relevant to the application by the Licensing Authority) derived from the Enhanced Criminal Records Bureau report and other such reports, including police observations and entries made in his Driver and Vehicle Licensing Agency--issued driving licence. TfL also requires drivers to undergo periodic health checks. 23.

In our opinion, it is important that this vetting should be carried out by government agencies with direct access to the Criminal Records Bureau reports, and not left to the PHV or CTI operators. Last April, over 8,000 Uber and Lyft drivers were removed from the road after being subjected to a state--conducted background check in Massachusetts [Boston Globe Apr 05, 2017].

24.

A research from the University or California Law School [START_REF] Blasi | Driving Poor: Taxi Drivers and the Regulation of the Taxi Industry in Los Angeles[END_REF] pointed out that Los Angeles taxi drivers were prone to work overtime: "an average 72 hours per week, sometimes putting in 18--20 hours per day driving in Los Angeles traffic". The link between drivers' fatigue and accidents is well established [START_REF] Dalziel | Motor vehicle accidents, fatigue and optimism bias in taxi drivers[END_REF]]. An important safety issue is, thus, how to prevent drivers from working overtime.

25.

This cannot be left to CTIs since drivers may work for several ones in the same day. Here, the only workable solution is for the regulator to centralize all the data transmitted by the various CTIs of its jurisdiction and automatically check drivers working time5 . This is exactly what the New York Taxi and Limousine Commission (TLC) has imposed upon all CTIs operating in the city. The rule is intended to help the TLC track driver hours and fatigue, as well as complaints about reckless driving6 . 26.

This data could also be used to check drivers' taxation compliance. This can be a very important feature of the regulation, especially in Europe where the welfare state is by and large financed by taxes on employment and on value added, and where consequently, incentives for tax evasion and undeclared work are substantial. 27.

Do taxi drivers need a special training? Training requirements can be used as a very efficient barrier to entry in the profession, as exemplified by the century old London "Knowledge", or, more recently, the weird exam imposed on would--be VTC 7 drivers in France 8 . The only purpose of these exorbitant requirements is to protect the rents of the incumbents. In a competitive market where drivers are under the permanent scrutiny of grading apps, no need for this type of exam: it falls upon the passengers to decide what skills should be expected from the drivers. 28.

This, however, does not mean that all training is irrelevant. Recent information shows that in the USA many drivers have been lured into the profession by false income promises [FTC, 2017]. This was possible because most drivers were unaware of the actual investment and operating costs of providing the taxi service. To prevent that, some basic knowledge of accounting, of taxation and of social obligations could be required by regulation to make sure that candidates enter the profession knowingly. 29.

Then comes the case of the drivers that may have to carry disabled persons, possibly with dedicated vehicles. They definitely need some training. This issue will be addressed later in our report, together with discussing the need to regulate subsidized services to specific populations.

The vehicle

30.

The licensing authority must be satisfied that the vehicle is safe, and in a suitable mechanical condition. Any active or passive safety system designed to lessen the risk of injury or death in an accident, such as airbags, seatbelt tensioner etc., must be in good working order. 31.

More importantly, the vehicle must be inspected periodically to ensure that it conforms to regulations governing safety and emissions standards. Since these vehicles generally are in constant use, these inspections should be more frequent than the ones imposed upon other vehicles, i.e. at least every year or even every 6 months. 32.

The issue here is to make sure the vehicle used is actually the one that is registered. Here the Dutch on--board computer system is the most cost effective. Full data transmission from the CTIs is also helpful. In Sweden, a recent report [SOU 2016, pp. 219--221] has proposed a control system comparable to the Dutch one, that is effective and cheap both for the taxi industry and the authorities: the vehicle has a "control box" containing an electronic ID for the car and an app / wireless communication program, a GPS that detects where the vehicle is located at different times (including empty millage), fares, driver's ID and a memory that stores this control data. This ID can be read wirelessly by the driver's app or taxi company's operating system. The vehicle's control box must be securely attached to the vehicle in a suitable place and properly sealed, preferably electronically. The inspection information in the vehicle's control box is available to the Swedish Tax Agency upon request. 33.

Finally, regulation must also make sure that liability in case of accident is correctly covered by insurance.

The Commercial Transport Intermediary (CTI)

34.

To insure fair competition in the taxi market, it is important to prevent some CTIs from taking advantage of tax avoidance loopholes such as the famous Dutch sandwich. There is no easy solution to this problem, at least at the national level, but one possible option is to raise a specific tax on rides. For this, again, full data transmission from the CTIs is necessary.

35.

App--based CTIs operate in what economists call a "two--sided market": they sell rides to passengers and, at the same time, sell passenger--rides to drivers. They maximize the total profit, i.e., the interlinked profits from both sides by adjusting its price levels, but more importantly by adopting a pricing structure that balances the relative demands of both sides. Since the seminal paper by Jean--Charles [START_REF] Rochet | Platform Competition in Two-Sided Markets[END_REF] on platform competition with two--sided markets, we know that received antitrust doctrine does not apply to multi--sided markets: monopoly pricing and below cost pricing may be permanent features of a competitive environment. Proving predatory pricing at the courts might be very difficult [START_REF] Evans | Multisided Platforms, Dynamic Competition and the Assessment of Market Power for Internet-based Firms[END_REF]. 36.

As we explained in the OECD--ITF discussion paper "Principles for the regulation of for--hire road passenger transportation services" [Darbéra, 2015] the CTI business is prone to natural monopoly at a global scale. To enter the market, developing a new app is the easy part. Many competitors are able to do that, so to be audible, one needs to invest a huge amount in communication, in marketing, in brand, to reach a critical size of customers and drivers. Investors believe this is a "winner takes all" market. This is the reason why global CTI have been able to raise funds and lose money for several years buying customers and drivers, with no short--term profitability constraints imposed upon them by investors. Moreover, even if they need to show profit to their investors, the fact that they are present in several cities in different countries allows them to subsidize both customers and drivers in one city where they want to dislodge competitors with the profits their draw from a monopoly position already gained in another city. In this case, it is impossible for the local regulator to prove predatory pricing unless the price paid by the customers is blatantly lower that the price paid to the driver. 37.

The propensity for CTI to reach a natural monopoly position can locally be prevented by fixed quotas9 , or by progressive taxation of market share. The first instrument is straightforward. It could however lead to a cartel where the incumbents could collude to prevent new contenders to enter the market; and, in any case, it will hamper competition. Progressive taxation of market share may be more flexible. 38. Mexico City is an example of proportional (not progressive) market share taxation. The city, in July 2015, became the first Latin American city to regulate ride--hailing apps, introducing a 1.5 per cent ride levy 10 . In New York City, to close a standoff with the municipality, Uber agreed that summer to discuss measures such as a surcharge on each fare to help fund the cash--strapped Metropolitan Transit Authority. 39.

To prevent CTIs from getting a dominant position in the local market, the progressive surcharge on fares should reach punishing rates when the market share gets close to, say, 40% or 45%. 40.

Congestion of urban streets caused by the rapid development of app--based taxi services is already a much debated issue in cities like New York, London or Amsterdam. Here is an opportunity to implement finely tuned congestion charges based on actual use of public road by time of the day, e.g. as the one recommended by [START_REF] Glaister | Transport pricing and investment in England: technical report[END_REF]& 2006]. Here again, this requires full data transmission from the CTIs. A simplified version of this congestion pricing system is used in São Paulo [ITF--OECD, 2016, p. 34]. Just like in the early years of the 20 th century the taxi industry has been used as a showcase for the automobile, it could now be used as a showcase and a training ground for elaborate congestion pricing to be later extended to all vehicles. 41.

CTIs collect huge amounts of information about their customers worldwide. This is a privacy issue that might need to be regulated, as it is regulated in the E.U. with Regulation 2016/679 (the General Data Protection Regulation, or "GDPR") 11 . Recently, Janette Sadik--Khan, former New York City transportation commissioner published an article in the New York Daily News (February 2, 2017) where she said that if the TLC is denied access to Uber's data "There's also no way for planners to assess basic transportation equity and see if rides are being cancelled or declined based on people's destinations, physical ability, or race, colour or creed".

Specific issues

Drivers' employment status

42.

Should regulation consider people driving for a given CTI as independent contractors or as employees of this CTI? The issue at stake here goes much beyond the taxi trade and belongs to the so--called gig economy. It all depends upon the way the country's welfare system finances health care, unemployment benefits and retirement pensions. In some countries most of it comes from employers' contributions, and independent workers have to pay much more to get equivalent benefits.

43.

This is a big issue in countries like France where regardless of the fact that they are employed or not people have access to most of the social benefits, benefits that are essentially financed by employers' contributions. For this reason, the Paris Urssaf (French Health Service) filed two lawsuits claiming from Uber the payment of the social contributions that would be due if the drivers, instead of self--employed, were employees of the CTI. 44.

Likewise, in October 2016 a London employment court has declared that Uber drivers should be entitled to minimum wage, sick pay and holiday pay12 . 45.

In the USA, by treating workers as contractors, the CTIs can keep labour costs low, since they do not need to pay drivers' payroll taxes and are not subject to minimum--wage and overtime laws. Lyft agreed in 2016 to settle a class--action lawsuit brought in 2013 by Lyft drivers in California. The drivers had sought to be recognized as full--time employees who would be eligible for benefits from the company, rather than as independent contractors [New York Times January 27, 2016].

However, under the settlement, Lyft drivers will continue to be classified as contractors. And in California and Massachusetts, Uber paid $100,000 to settle a lawsuit claiming that drivers were entitled to expenses like gas and maintenance. In New York, drivers' access to employment rights depends on the State Labor Department, which takes on Uber drivers case by case. So far, only two have been granted unemployment payments.

46.

The total flexibility of the gig economy services, appreciated by consumers, is based on the precariousness of the workers performing the service. Paid by the task, without visibility on their next day's income, they only have reduced social protection, not to mention access to housing or credit. The issue at stake here is how to open up new rights for precarious workers, and how to finance these schemes without increasing administrative complexity and discouraging employment?

Workers protection

47.

Driving a car is a very low skilled occupation. As a result, the supply of potential drivers is almost limitless. Historically, this has always given the owners of taxi licences the possibility to pressure their drivers down to bare subsistence. Not surprisingly, almost everywhere, taxi drivers are recent migrant workers. With the advent of the CTI and the huge amount of data they can collect on their drivers, the relation is even more unbalanced 13 . 48.

In a recent article in the New York Times (April 2, 2017) Noam Scheiber explained how Uber engaged in an extraordinary behind--the-scenes experiment in behavioural science to manipulate its drivers. It uses psychological inducements and other tactics developed by the video game industry to influence when, where and how long drivers work, raising company revenue while lowering drivers' per--hour earnings.

49.

More worryingly it also attracts new drivers with false promise of income. On Uber's webpage on how to become driver, one can read "Work that puts you first. Drive when you want, earn what you need." 50.

In a recent order, the American Federal Trade Commission (FTC) has settled a lawsuit against Uber for $20 million, as a result of a federal complaint that says the ride--hailing start--up inflated the amount of money potential drivers could make as drivers for the ride--hailing service14 . According to the FTC complaint15 , Uber presented as median hourly income for its drivers in 18 major cities, figures that were only reached by fewer than 10% of the drivers in 3 cities and fewer than 20% in 8 others. FTC also notes that multiple respectable news sources had disseminated Uber's false statement, including Businessinsider.com,CNBC.com,Forbes.com,and Slate.com. 51.

Although this behaviour is reprehensible, there is no need for taxi specific regulation about it. General trade laws already prohibit unfair or deceptive acts or practices in or affecting commerce. The problem is that the various countries' Trade Commission must, first, be aware of these practices and, second, have access to the internal CTI's data to collect drivers' driving time (including empty millage) and the corresponding earnings. The task would be easier if, as a routine, CTIs were compelled by regulation to submit their trip data. 52.

As noted earlier, the relation between the CTI and the driver is unbalanced. It is even more unbalanced if, at the local level, a CTI has reached a natural monopoly position or if a couple CTIs are acting as a cartel. In these case drivers confront a monopsony and have no information about their marginal productivity (i.e. their real value in the market). 53.

Save from imposing that every driver should be salaried and protected by minimum wage regulations, the only way to control that is to prevent CTIs from reaching a monopsony position at the local level. This brings us back to the regulations we proposed earlier to prevent local natural monopolies.

Equity implications

54.

In most countries of the rich world, scheduled public transport operators are subjects of regulations designed to ensure equitable accessibility for disabled, elderly or low--income residents. Sometimes, this extends to taxi vehicles. 55.

The London Black Cabs have to be disabled friendly, which means the vehicles have to have wheelchair ramps, wide opening doorways, methods where the wheelchair is held in place safely in the vehicle in the event of an accident. This requires the use of specialist vehicles which are neither cheap to produce (due to low production runs) nor particularly up--to--date due to lack of investment on behalf of the manufacturers. The problem is that the cost of this is met by the increased fares charged to everybody, and this put them at a disadvantage vis--à--vis minicabs operating for CTIs. The situation is similar in New York City where by 2020; half of all yellow cabs must be wheelchair--accessible while the new livery services have no such mandate.

56.

Making all buses, trains and subway stations accessible to wheelchair users can be very expensive. For this reason public transport agencies very often find it cheaper to contract with specialized transport operators and provide mobility for this public at a nominal fare but under specific conditions, e.g. number of weekly trips. 57.

As mentioned earlier, the taxis can play a major role for providing mobility when and where scheduled public transport is not available and to the disabled and the elderly. The question is: how to subsidize it? 58.

In the case of rural areas, several regions in Denmark, Sweden, and the Netherlands seem to have come up with different and innovative solutions to this problem [Cazemier et al., 2012]. These services are subsidized but competitive bidding and centralized dispatch ensure they are provided at the least cost. 59.

In urban areas, imposing operators' fleets to respect a given quota of accessible vehicles does not imply that CTIs will strive to make these vehicles available when and where needed. The cost will be borne by all the taxi users, but most of it will be wasted. Since emerging mobility providers simply follow perceived market demand, a better approach is to make the demand from disabled persons attractive by subsidizing it, e.g. paying the CTI twice or thrice above the normal fare paid by the person. 60.

Of course, this has a cost for the public purse. If it is politically easier to make all taxi users to pay for the disabled in place of the taxpayer, another way around is for the public agency to resort to some kind of marketable rights system. In this case, the agency has first to estimate what percentage of the taxi trips should be done by people in wheelchairs. Then it can require the various CTIs of the city to reach this percentage. The agency would then auction rights for not meeting the target. Under--performers would buy these rights from the agency or from over--performing CTIs.

The jurisdiction border issue

61.

Some of the issues above could be regulated at the metropolitan level or at the regional level. There is a problem however when rides cross jurisdiction borders, e.g. when a vehicle registered in one city brings a passenger in another city and takes advantage of the fact that its CTI's platform is present in both cities to pick up passengers in the second city where regulation might be less lenient. This can be prevented by specific signage on the vehicle or by requiring the CTI to transmit their data to a national regulator.

Planning

62.

In the sections above, we have seen the many instances where access to the CTIs' data would make it easier for the regulator to enforce compliance with the various regulations proposed. 63.

The data generated, collected, and stored by CTIs also contain a treasure trove of insight into travel behaviours and preferences that can be harnessed for the public good. It could reveal districts underserved by transit and identify the neighbourhoods that should be connected with them, or show where cities should reorganize street networks or invest in new transportation infrastructure. 64. This is well explained in a recent report by TransitCenter [2016, p. 37] which, in addition gives an astonishing example: "Uber tracks phone accelerometer data that can detect bumps in the road during each rider's trip, creating the potential to map roadway quality in cities where the company operates." 65.

As stated in the report: "private transportation companies rely on publicly funded road infrastructure to support their businesses. It is reasonable, then, for public agencies to expect something in return, especially if it would lead to improved transportation planning."

Is there a need to keep a regulation that is specific to the street taxi?

66.

At a time when e--hailing is a common option for most riders, one could discuss the need to keep a regulatory distinction between street taxis and contract taxis. This distinction may be useful for customers with no smartphone or to avoid congestion at the taxi ranks at airports and train stations. However, other options are available that do not require separated regulations. 67.

The real issue is the one of sub--optimal regulation, e.g. if for some political or technical reason it is not possible to impose effective congestion pricing on all the taxi vehicles, it might then make sense to keep a special category for the vehicles allowed to ply for hire in the streets and at stations as an imperfect way to mitigate congestion. 68.

In case the regulation confirms that there is no functional difference, the real issue here is probably how to compensate the street taxi licence owners for their vanished asset.

Table 1 -Taxi trade economic and social issues requiring regulation

 1

				Commercial
		Driver	Vehicle	Transport
	Objectives			Intermediary (CTI)
	Safety	"Fit and proper" Overwork	Road worthiness Insurance
	Fair competition	Income tax evasion Social contributions (retirement, health)		Tax avoidance (Dutch sandwich) Natural monopoly Workers protection
	Externalities		Clean vehicle	Congestion
	Privacy		On--board camera Customer protection
	Access with no exclusion	Training	Accessible vehicles	Quota or subsidies?
	Mobility
	(night, low density, poor,			Subsidies
	elderly, etc.)
	Planning			Data

Enforcing compliance at a reasonable cost 17

  . Drafting sensible regulation to deal with the economic issues mentioned in the table above is a no--brainer. The problem is how to enforce compliance at a reasonable cost. It is our hypothesis that it can be quite easily done if Commercial Transport Intermediaries are required (as it is the case in New York City) to provide, for each trip booked, detailed data according to the following entries:

• The pickup and drop--off date and time • The driver's license number • The vehicle license plate •

Discussion paper commissioned by the International Road Union (IRU) for the Taxi of the Future Reflection Group together with two other papers: "Business--models for the taxi of the future" and "Travel--chains / mode choice & the taxi of the future"

Defined as unscheduled door--to--door passenger transport

"Commercial Transport Intermediary" (CTI) are defined as follows "Digital intermediaries or marketplaces that canvass or solicit for a passenger to connect with a licensed professional driver, meeting the requirements of the relevant jurisdiction and operating a validly registered vehicle under the laws of the relevant jurisdiction."

i.e. UK equivalent to contract only taxi

A costlier solution would be, like in the Netherlands, to equip all vehicles with an on-board computer activated by the driver's electronic ID card. The card would record all driving time and warn when working overtime.

6 http://nyc.streetsblog.org/2017/02/02/tlc--votes--to--require--uber--and--lyft--to-disclose--trip--

data/ 7 i.e. French equivalent to contract

only taxi8 An anthology of the strangest questions to be found at http://www.capital.fr/a--la-une/quiz/d--artagnan--lorgnon--brexit--decouvrez--les--questions--absurdes--posees--a--l-examen--des--vtc--1176317

As in Stockholm where no taxi CTI may operate more than 35% of the vehicle fleet.

At this date, Uber had 500,000 users and more than 10,000 drivers in Mexico City, with most using Uber X the equivalent of Uberpop in Europe.

https://www.whitecase.com/publications/article/unlocking--eu--general--data-protection--regulation--practical--handbook--eus--new--data

12 https://www.judiciary.gov.uk/wp--content/uploads/2016/10/aslam--and--farrar--v-uber--reasons--20161028.pdf

As long as the driver is a professional, it is not personal privacy issue relevant of GDPR, but a labour law issue.

https://www.ftc.gov/system/files/documents/cases/uber_final_order.pdf

https://www.ftc.gov/system/files/documents/cases/1523082ubercmplt.pdf


Introduction#

1.

The!best!way!to!travel,!beyond!walking!distances,!is!to!travel!by! car.!The!nice!things!about!the!car!is!that!it!is!comfortable,!it!has!a!trunk! for! your! luggage! or! for! a! cartload! of! groceries! and! you! can! sing! while! driving! or! listen! to! your! favourite! music! or! chat! with! chosen! companions.! You! can! even! select! the! room! temperature! best! suited! to! the! clothes! you! wear.! If! you! cannot! drive,! you! can! get! a! similar! treat! hiring!a!taxi!with!the!added!benefit!that!you!do!not!need!wasting!time! finding!a!parking!space!at!your!destination.!It!is!a!real!seamless!doorHtoH door!service.! 2.

Unfortunately,! big! cities,! and! especially! the! metropolises! where! most! of! the! value! added! is! created,! cannot! accommodate! everybody! traveling! by! car,! for! a! sheer! question! of! space.! To! be! accessible,! cities! have!to!resort!to!public!transport,!and!metropolises!to!metro!systems,! both!modes!generally!more!or!less!heavily!subsidized.! 3.

The!problem!with!public!transport,!besides!missing!most!of!the! user's! benefits! of! the! car,! is! that! it! does! not! operate! seamlessly.! Most! journeys! combine! several! stages,! and! connexions! take! time,! may! be! uncomfortable,!and!require!a!good!knowledge!of!the!network!together! with,!for!each!segment,!its!schedule!or!headway!and!its!tariff!system.! 4.

For! their! daily! commute,! urban! travellers! are! familiar! with! this! information:!they!know!the!best!combination!of!stages,!they!know!the!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1 !Discussion!paper!commissioned!by!the!International!Road!Union!(IRU)!for!the!Taxi! of!the!Future!Reflection!Group!together!with!two!other!papers:!"What!regulation!for! the!taxi!of!the!future?"!and!"BusinessHmodels!for!the!taxi!of!the!future"! ! 2! length!of!the!journey!and!its!variability.!They!also!know!its!pricing!and! probably! have! interHmodal! travel! ticket.! Thanks! to! online! journey! planning! and! integrated! fare! systems,! planning! an! infrequent! public! transport!journey!is!no!longer!the!chore!it!used!to!be.!RealHtime!public! transport! journey! planning! apps! are! already! available! in! most! metropolises.!This!should!very!soon!combine!with!appHbased!payments! for!fares.! 5.

In!the!near!future,!most!metropolises,!like!Los!Angels!today,!may! have! journey! planning! apps! integrating! all! transport! modes.! Users! would! be! allowed! to! select! the! modes! for! which! they! already! have! a! subscription!and!ask!for!the!fastest!combination,!or!the!cheapest,!or!the! most!environment!friendly.! 6.

But! the! inconvenience! of! transfers! between! stages! remains,! together!with!the!absence!of!public!transport!in!time!and!place!of!low! demand.! 7.

The! staggering! technological! advances! of! the! past! decade! have! made! dynamic! rideHpooling! a! viable! solution! in! many! cases,! making! it! possible!to!partially!replace!fixedHroute!fixedHscheduled!bus!services!by! demand!responsive!minibuses!that!serve!popHup!stops!on!demand!and! provide! transferHfree! rides.! In! places! and! times! of! low! demand! the! minibuses!can!even!be!replaced!by!shared!taxis!that!offer!onHdemand,! doorHtoHdoor!or!curbHtoHcurb!shared!rides.! 8.

Such!systems!have!already!been!implemented!several!years!ago! in! rural! areas! in! Northern! Europe.! One! can! imagine! their! progressive! penetration!in!urban!areas.!For!this,!four!kinds!of!problems!will!have!to! be!overcome:!technical,!economic,!institutional!and!political.! 9.

We! will! first! present! the! case! study! of! ridesharing! in! rural! Scandinavia!and!in!the!Gelderland!province!of!the!Netherlands!since!it! gives! a! good! idea! of! the! difficulties! ahead:! technical! with! computing! limitations! of! assignment! software,! economic! with! the! procurement! process!for!both!the!platform!and!the!transport!operators,!institutional! with! the! proper! role! of! public! agencies! and! political! with! the! public! acceptance.! 10.

We!will!then!present!the!prospects!of!highHcapacity!ridesharing! in!dense!urban!areas!with!the!simulations!that!have!been!carried!out!in! New!York!City!and!in!Lisbon.! 11.

We! will! finally! see! under! which! conditions! tripHplanning! apps! will!include!taxis!in!the!travelHchains.!

Subsidized#ridesharing#in#rural#Scandinavia 2 #

The#"Planet"#system#in#Scandinavia#

12.

In! Sweden! and! Denmark,! all! the! responsibilities! for! providing! subsidized!transport!are!obligations!of!local!bodies!only,!at!the!county! and!municipal!levels.!In!several!counties,!the!jurisdictions!and!agencies! have!been!able!to!agree!to!pool!their!needs!and!create!a!single!authority! or! organisation! in! charge! of! making! calls! for! tender,! selecting! the! Two!counties!on!the!west!coast!of!Sweden:!Västra!Götaland!and! Halland,!use!a!system!very!similar!to!the!Danish!system,!adapted!from! the!Planet!software.! 18.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2 !This!case!is!studied!in!
When!a!user!calls!to!book!a!trip,!the!software!first!checks!if!he!is! entitled!to!subsidized!transport.!It!then!notes!the!starting!address!of!the! trip,!its!destination!and!the!time!at!which!the!person!wishes!to!leave!or! to! arrive.! It! searches! for! the! vehicle! that! will! make! the! trip's! (generalized)!cost!lowest!depending!on!the!scheduling!algorithm.!This! vehicle!can!be!a!vehicle!available!that!is!not!yet!in!service!and!located!at! its! base,! or! a! vehicle! to! which! one! or! more! trips! have! already! been! allocated! and! will! be! diverted! to! take! this! additional! traveller.! The! different! parameters! such! as! time! of! booking,! pickup! window,! or! potential! detour,! allow! the! software! to! optimize,! within! certain! limits,! the!path!of!the!vehicle!to!increase!its!occupancy!rate.! 19.

When! the! passenger! boards,! its! identification! allows! the! software! to! spread! the! cost! of! running! the! vehicle! between! all! the! passengers! on! board! and! to! charge! the! various! agencies! that! fund! the! mobility! of! these! travellers.! The! cost! that! will! be! billed! to! the! payers! depends! on! the! filling! ratio! of! the! vehicle.! This! is! an! incentive! for! hospitals! to! coordinate! the! treatments! of! their! longHterm! patients! and! for! municipalities! to! encourage! their! citizens! to! travel! at! the! same! times.! 20.

Regularly,!a!sample!of!travellers!is!surveyed!to!assess!their!trip! of! the! day! before! on! a! scale! of! satisfaction! with! different! aspects! of! service! such! as! timeliness,! quality! of! care,! comfort,! etc.! The! transport! authority! uses! these! evaluations! to! apply! any! sanctions! to! operators! who! do! not! deliver! satisfactory! service.! They! are! also! used! during! the! renewal!of!tenders.! An#original#tendering#system#for#transport#services#

21.

FlexTrafic! manages! calls! by! phone! and! by! Internet,! records! orders,! selects! the! vehicle,! optimizes! its! route,! and! spread! the! cost! of! transport! between! the! different! entities! responsible! for! the! different! passengers!sharing!the!vehicle.!The!specificity!of!the!FlexTrafic!system! over! all! the! other! DRT! management! software! available! on! the! market! place! lies! in! its! own! way! of! selecting! the! vehicle! that! will! perform! the! transportation! and! in! the! way! its! spreads! the! cost! of! this! transport! between! different! payers.! The! vehicle! selection! is! intimately! linked! to! the!tendering!system.! 22.

A! complex! tendering! system! was! designed! to! make! sure! to! get! the!lowest!prices!by!opening!competition!to!all!the!transport!operators! on!the!market,!including!the!smallest.!Indeed,!in!Denmark!as!in!Sweden,! the! regional! transport! authorities! make! extensive! use! of! taxis! to! provide!DRT!services.! 23.

This! bidding! system! distinguishes! two! types! of! contracts:! "day"! contracts!and!"occasional"!contracts:! 24.

In!"day!contracts",!the!transport!operators!provide!FlexDenmark! with! a! fixed! number! of! vehicles! for! a! given! period! of! time,! usually! the! day.!This!availability!is!paid!whether!the!vehicles!are!used!or!not.!The! contracts! also! specify! a! "home! area"! where! the! vehicle! is! based.! This! ! 6! other! original! feature! of! the! province! of! Gelderland! model! is! that! between! the! call! centre! on! the! one! hand! and! dispatch! and! transport! operators!on!the!other!hand!stands!a!"Projectbureau",!a!regional!public! authority,! to! monitor! the! whole! system! in! real! time! (Figure! 2).! All! information! exchanged! between! the! operator! of! the! call! centre! and! transport!operators!passes!through!the!computer!system!of!this!control! office! managed! by! the! region! which! also! receives! realHtime! GPS! coordinates!of!each!vehicle.!All!these!data!are!recorded!and!a!statistical! analysis! is! done! regularly.! The! total! transparency! resulting! from! this! organization! can! provide! all! the! necessary! information! to! competitors! during!the!bidding!at!contract!renewals,!but!it!also!allows!the!regional! government!to!assess!the!quality!of!the!service,!and!even!track!failures! in!realHtime.! Several!lessons!can!be!drawn!from!the!case!study!of!ridesharing! in! rural! Scandinavia! and! in! the! Gelderland! province.! They! address! the! four! issues! mentioned! above:! (i)! technical! with! computing! limitations! of!assignment!software,!(ii)!economic!with!the!procurement!process!for! both! the! platform! and! the! transport! operators,! (iii)! institutional! with! the! proper! role! of! public! agencies! and! (iv)! political! with! the! public! acceptance.! 32.

Regarding! the! technical! issue,! the! Planet! software! had! to! take! some! shortcuts.! Indeed,! designing! the! optimal! vehicle! assignment! and! route! selection! to! minimize! the! total! time! cost! of! the! system! is! a! task! that!today!computers!are!barely!able!to!carry!on!in!realHtime.!For!this! reason,! Planet! requires! that! trips! cannot! be! booked! with! less! than! 30! minutes! antecedence! and! uses! a! preHcalculated! zoneHbyHzone! distance! matrix! to! save! computing! time! during! the! route! assignment.! However! !

  Figure'1'-'When'the'public'authority'operates'both'call'&'dispatch,'many'small' transport'operators'can'be'contracted'(Denmark'&'some'Swedish'counties)'

Figure' 2

 2 Figure'2'-'Procurement'model'of'Gelderland's'Regiotaxi'system