Last week, Uber announced that it was withdrawing from Israel – for the second time.
“We have made the difficult decision to suspend our taxi ordering service in Israel at the same time as the cessation of delivery services in Italy, as we have done in the past in other markets,” the company said. “The decision was made in accordance with Uber’s policy of focusing on the company’s main global markets. We are working to minimize the harm to the taxi drivers active on the platform and to our staff in Israel.”
The popular ridesharing app first tried to break into the Israeli market in 2014 but was met with ferocious opposition from the taxi drivers’ union, which pressed the government to prevent the company from eating away at its monopoly.
In 2016, Prime Minister Benjamin Netanyahu met with Uber co-founder and then-CEO Travis Kalanick at the World Economic Forum in Davos and returned with a newfound passion for the app and its ability to increase competition in Israel’s transportation sector. He was met with a cold bucket of water courtesy of then-transportation minister Israel Katz.
“Now you’re talking about competition?” Katz reportedly shouted at Netanyahu after the prime minister raised the matter during a cabinet meeting. “My job is not to worry about foreign tycoons but to serve Israeli citizens.”
In 2017, the Tel Aviv District Court issued an injunction halting the company’s Israeli operations after the taxi drivers’ union and the taxi-hailing app Gett petitioned the court, arguing that Uber’s service was illegal since it ran afoul of laws barring drivers without the requisite credentials from taking paid passengers.
In 2022, the company resumed operations in Israel as a taxi-hailing service, similar to Gett and Yango, and thousands of drivers across the country signed on.
Uber's second withdrawal
Eventually, however, Uber realized that it simply couldn’t compete with a local behemoth like Gett and it decided to cut its losses and leave the Israeli market for good.
Uber’s withdrawal from Israel is bad news for Israeli consumers. Public transit is slowly improving, but it doesn’t address the needs of all Israelis, it often takes long or circuitous routes – and it doesn’t operate (or operate fully) at night or on Shabbat and Jewish holidays. Point-to-point transportation services are a necessity.
If taxi services in Israel were cheap, efficient, and fair, there might be a compelling argument for preventing Uber and comparable services from operating in Israel. But alas, they are not.
Stories of crooked drivers abound, and no one is more vulnerable to them than tourists, who are often unfamiliar with the laws and regulations that apply to taxi services and are thus – if you’ll excuse the pun – taken for a ride.
There is no worse way to welcome guests to Israel than by forcing them to contend with drivers who refuse to activate their meters, take them on roundabout routes, treat them discourteously, and then charge them several times what they should be paying. Even when drivers do abide by the law, fares are often prohibitively expensive, putting taxi services out of reach for many Israelis.
There is no compelling reason for taxis to have a monopoly on point-to-point transportation in Israel. Conversely, none of the arguments against Uber holds water. There are mechanisms in place to ensure that Uber drivers are competent and trained.
They are made to undergo police-administered background checks and vehicles are forced to pass regular government inspections. Uber operates in dozens of countries around the world. If they’ve figured out how to do it, so can we.
The prime minister has prided himself on liberalizing Israel’s economy and opening the local market to competition. He should instruct his ministers to work with Uber, and any other ridesharing services, to create the conditions for their entry into Israel in full force.
If that means changing the law, so be it: Previous efforts to legislate ridesharing services in Israel have won the support of both coalition and opposition lawmakers, and a concerted effort by the government would ensure the passage of any relevant legislation.
We’ve said it before and we’re saying it again: Bring Uber to Israel.