Uber is Revealing

Uber is revealing how government is generally a supporter of entrenched interests.  Upstarts and competitors are always hated by existing businesses. Under real capitalism there is little an existing business can do other than produce a better good or service at a lower price.  When the government has unlimited powers to regulate business however the more powerful existing business can wield the police power of the State to throttle competitors.

Here’s an example from the news: Counsel meeting could limit the number of Uber cars.  The stated public purpose is to fight congestion. That reasoning ignores the benefit to people. Of course adding Uber cars to the surface streets of Manhattan increases congestion. It also makes it possible for people to get around conveniently without bringing their own car.  Huge parts of Manhattan have no cabs cruising most hours because there is not enough demand. Calling a radio dispatched limo can involve an hour wait. Competition for yellow cabs will make service better. Just the entry of Uber often makes the local cabs cleaner, the local drivers more pleasant and the cars upkeep better.

The taxi industry proposed similar legislation before. Where are the people who commute to Manhattan by car and bus? Are they calling for this type of legislation?  How about pedestrians and businesses? Are there concerned committees with broad support?

Thousands of people want to work by providing a service to Manhattan. More thousands want to voluntary exchange their money for an Uber ride. Yet the city counsel wants to prevent this voluntary exchange.

Uber reveals this about regulation

Government almost always forwards the interests of established business over the upstart business and the customer.

Ostensibly, regulation of taxi services is for the safety of the public and to insure minimum levels of service.  In actuality it is to prevent competition in service, price and innovation, all to the benefit of entrenched taxi service providers.

I remember the cabs in NYC years ago.  The vehicles were poorly maintained and dirty.  The driver often spent his time on the cell phone talking loudly in a language I could not understand, as if he was on his own time instead of in my paid service..

In Miami the trip from the airport to Miami Beach was fixed fare.  Once the shocks on the cab were bad and it bounced up and down so severely I thought we would drive into the bay. Another time I could smell exhaust in the car. I thought the driver might pass out at any moment. Because the fare was fixed the drivers drove as fast as they could. At night they would turn off the dashboard lights so the passengers could not guess how fast they were flying. Nothing like speeding on a causeway over water in an under-maintained car while the driver is in deep conversation with someone miles away.

Then I tried an Uber car in Miami. The car was a very new Toyota small SUV. The driver had provided water and candy for passengers.  He asked about the temperature to set, whether there should be music or not and at what volume.  The trip cost slightly less than an equal taxi trip. I was hooked.

Why is Uber so much better?  Every major metropolitan area regulates taxis. They limit who can offer the service; hence it is a government enforced monopoly.  They act as monopolies always act  Either they raise prices (or not if prohibited by regulation) or cut on service and capital investment, or both.  The cabs are crappy  The drivers are rude and unconcerned about your experience,

The politicians gain the fees and support of taxi fleet owners. The fleet owners gain freedom from competition and the need to manage and provide a good customer experience.  The drivers gain almost nothing. Hired hands who take their little share out of the arrangement by freedom from providing customer service. After all, there will be fares no matter how surly or preoccupied the drivers are. The customer pays for the politician’s and the fleet owner’s benefits. He pays in crappy cabs, higher prices, lousy customer service.

It’s repeated everywhere. The most regulated enterprises provide the poorest customer service. Think of what your experience at the doctor’s office or hospital is like today