Think Freely Media presents Common Sense with Paul Jacob

Virginia state government has banned Web-based/app-based car-ride services Uber and Lyft from operating in the state. After applying heavy fines. After demanding the services follow rules originally devised for taxis and limo and bus services.

It seems tantamount to banning the automobile a century ago because the horse-and-buggy regulations on the books didn’t fit.

Uber and Lyft call what they provide “ride-sharing” services, allowing people with smart-phone and tablet apps to “hail” rides they need, from almost anywhere to almost anywhere. The folks providing the rides have signed up and even taken classes, and both parties rate each other after the transaction. Riders can “steer clear” of low-rated drivers if they want. And drivers can not offer rides to low-rated riders, as well.

It’s quite a service.

I first heard about this idea from economist David Friedman, a generation ago. He called it a “jitney” system, and offered it as an alternative to mass transit systems that are just too capital intensive to make a profit while still servicing diverse needs.

Now, the idea is off to a good start with two excellent services. Technology has allowed for safe, low-transaction-cost contracting between strangers. This sort of person-to-person (P2P) revolution could change everything.

Including government patronage. Or the need for much government regulation. Taxicab services are heavily regulated in most places. The excuse is usually safety and traffic considerations, but let’s be frank: it’s mostly a government power grab. Horning in on territory. Collecting a fee.

Uber and Lyft leverage the capital car-owners invest, and such P2P services are probably the most efficient contracting systems possible. If free market principles should apply to anything, it is jitney services.

So, Virginia, lay off. Free the P2P.

This is Common Sense. I’m Paul Jacob.

By: Redactor

9 Comments

  1. Rick says:

    Exactly. The gov’t, protecting it’s tax resource of established industry, conspires with said established industry to squash competition.

    AirBNB, the dotcom that rents out your home or apartment while you’re away, giving competition to hotels, is under the same siege.

  2. Bill Smithem says:

    Though I seem to almost always agree with Paul, things like this are not just government power grabs. This is bought and paid for politicians protecting the business interests of those who bought them. Business as usual… Legalized force will always be abused.

  3. JFB says:

    I am with Bill, the issue is not medallion income to the cities, it is more probably the campaign contribution of the “licensed public services” which is more significant in this case.
    Protect of the public by eliminating competition to the licensee is standard, wasteful and normal practice.
    It is “good” for the citizens, just ask their masters in the government and the monopolies/oligopolies they spawn.

  4. Brian Wright says:

    Excellent development and reportage, Pablo. Hope to see you in Columbus. Here’s an early guest column from a fellow in my cryonics forum: http://www.brianrwright.com/Coffee_Coaster/06_Guest/2008/080421_Jitneys_Collectivos.htm.
    [PS: Your spam question continues to be overchallenging to the average reader, I’m afraid. This one was a trick question, 2×2 vs. 2+2. Devilishly complex. But I know you cater to the intellectual elite.]

  5. Karen says:

    Excellent analysis, Paul. I use Uber all the time. The cars are cleaner & the drivers are nicer. And no money changes hands, which is easy. The drivers also get the bulk of the fare, since the system is automated. Therefore, why shouldn’t entrepreneurs be allowed to start and maintain their own business? Payola & government: hand in hand!

  6. Rincon says:

    Virginia has applied a sledgehammer when a scalpel was needed. They needed to either get rid of or change around the myriad regulations that apply to cabs, but not to car-ride services. As usual, money talks.

  7. Rick says:

    OT: Obama & Elizabeth Warren and College Debt plan

    I predict this is step one in Obama’s plan to socialize college “rights”.

  8. […] Common Sense with Paul Jacob » Archive » P2P Jitneys. […]

  9. MoreFreedom says:

    Another example of government force being used to inhibit innovation and restrict competition, in return for campaign cash and other favors (perhaps a financial interest in the taxi companies, consulting contracts for politicians, speech fees for politicians, all paid for by taxi companies).

    This is not protecting our liberty.

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