Uber’s challenge to old-fashioned ride service — to the taxi industry — is at least twofold.
One, it shows government regulation to be counterproductive and kind of witless.
Two, it shows that innovation — particularly by decreasing transaction costs — can rapidly transform a market for the good of consumers.
Recently, politicians who play to special interests — in this case, to taxicab companies and taxi drivers — have made some spectacular blunders. Perhaps the best-known is Bernie Sanders, who claims to see severe “problems” with Uber’s online ride-sharing service, but whose campaign staff uses Uber for ride-sharing . . . and nothing else. Hah!
But the London transit regulators have made the biggest splash.
Their latest proposal? To require Uber drivers to wait five minutes before picking somebody up.
Evens the playing field, you see.
Uber is so much quicker to respond to the paying riders’ needs that taxicabs apparently cannot compete in Old London Town.
The folks at Uber publicized the expected company reaction: the regulation would be a “huge mistake.”
But really, it’s a HUGE ADMISSION.
It shows that Uber’s service is superior, and that government regulators are more interested in protecting providers (taxicabs) than customers (pedestrians seeking rides).
It also shows these regulations for what they really are: protectionism for special interests, not protection for the safety of consumers.
Remember what Frédéric Bastiat said about protectionism: it’s always about placing obstacles in front of some producers (and the market in general) to aid a select (literally privileged) group of producers, regardless of consumer wants and needs.
Hobbling Uber to save taxicabs! What’ll they think of next?
This is Common Sense. I’m Paul Jacob.