The development of new products via technological innovation is revolutionizing the world. Technology is also providing innovative solutions to replace old transportation systems that only corrupt government bureaucrats are bold enough to fight.
Uber, a technology service company that connects consumers with independent drivers through a smart-phone app, has been under attack by the taxi cab and limo industry and the government regulators who represent them. The City of Dallas attacked Uber for allegedly not complying with transportation regulations. Uber maintains that they are not subject to regulations, since they do not own taxi cabs or employ drivers. In fact, that’s the innovation driving their success.
The City has threatened to shut down their operation, in part, by creating an undercover sting operation that issued 61 citations to 31 drivers “found to be driving for an unauthorized service,” according to Asst. City Manager, Joey Zapata. After all, people are just too stupid to make these kinds of decisions on their own. Without government regulations, they claim we’d all be duped by greedy businessmen unaccountable to the public, whose only concern is to make profit by driving us around in uncomfortable, dirty cars driven by aloof drivers with bad manners!
People are, in fact, greedy. But consumer choice and competition amongst businesses is precisely what holds them accountable to the public, and, since businesses must earn patronage, they have an economic incentive to provide quality products and services at competitive prices. Greedy folks tend respond to economic incentives.
Federal anti-trust laws dating back to the progressive era have codified the importance of private competition, which prohibit businesses from colluding to reduce competition. Ironically, the federal statute doesn’t prohibit the government from doing so. Most government regulations designed to ‘protect consumers’, in effect, protect businesses from competition. In the case of Uber, they aren’t even the competitor; the local drivers they connect you to are. And, unlike big companies, independent drivers can’t afford expensive licenses, onerous regulations and highly paid government lobbyists.
The new regulations proposed by Joey Zapata, and by officials in other cities, are brilliant in their stupidity. Uber would need to apply for “operating authority” from the city; its drivers could respond only to dispatches from their direct employer; rides would have to be arranged at least 30 minutes before the service is provided; new vehicles would require sticker prices in excess of $45,000; and minimum fares (think price fixing) would be enforced. These regulations would unravel the Uber business model, which is the main reason the company has been such a hit with consumers.
Zapata, acting as the benevolent bureaucrat, placed the ordinance on the consent agenda, a tactic often used by staff to slip substantive policy making past councilmen, undetected. Fortunately for consumers, a recent explosion of tweeting from millennials with the hash tag ‘#DallasNeedsUber’ helped raise awareness of the issue, pulling the ordinance off the consent agenda, and into a public discussion at the next meeting at City Hall, on August 28. Twitter, another tech innovation, may be what ultimately saves the free society from the iron boot of Big Brother and his cronies.
