There’s nothing like watching a rent-seeking industry fall on its own sword.
Over the past week, taxi drivers from London to Berlin have staged mass protests against ridesharing company Uber, with some 30,000 drivers parking their cars, shutting off their meters, and blockading streets. The protestors claim that car-sharing services like Uber avoid regulation, drive down fares, and cost taxi drivers their jobs.
In a great twist of irony, the taxi drivers actions have worked to Uber’s benefit, both giving them free publicity and driving a huge increase in sign-ups:
It turns out that choking traffic from London to Berlin isn’t the best way to get your message across to customers…
[Uber] says there was an 850 percent increase in people signing up for the service in the U.K. And it’s extending across The Continent.
“I signed up today,” Andy Williams, an American living near Milan, told the The New York Times. “I don’t like the Italian business mentality. They are just about getting your money. There’s no customer service.”
That apparently outmoded idea of “customer service” is what’s pushing people to Uber…
As noted previously, ride-sharing is an economic no-brainer, providing greater choice to consumers and lowering costs, while also improving productivity by facilitating a more efficient use of the existing transport fleet. Yet, economic no-brainers tend to be resisted by incumbent interests who are threatened by it.
Everywhere in the world where ridesharing has been tried, a storm of opposition has been aroused by vested interests; not just in the Taxi industry, but in public transport monopolies and government.
As argued by Colin Clark (a distinguished colleague of J M Keynes), in possibly his last published work, “Regional and Urban Location” (1982):
Anyone who defends the taxi monopoly, and restrictions on multiple hiring, while at the same time complaining about the use of fuel, is totally incoherent. The abolition of the taxi monopoly would cheapen travel, save fuel, reduce congestion, and would have one further great advantage, to which hardly any attention has been drawn, namely that it would provide employment opportunities for the unskilled…..
All that should be required to operate a ridesharing service is meeting basic performance standards, a valid driver’s licence, and a registered and road worthy car. People should be free to choose their transport options, not have them dictated to by the government for the purposes of protecting the Taxi cartel’s ‘licencing’ monopoly, which gleans an economic rent from purposely-limiting the number granted.
