Why Lovers of the State Hate Uber

by Gary North

The regulation by the state of the streets of London goes back to 1635. It began under King Charles I, who was a full-time tyrant, and whose life ended on the scaffold in 1649.

Charles decided that the streets were too crowded in London, and what the city needed was government control over the number of taxis. This tradition extends to today. In major cities, the government regulates the supply of taxis, and the result has been higher prices and rotten service. Regulation has created an oligopoly of taxi companies, which use state power to extract greater wealth from people who want to hire a taxi cab.

This, of course, is heralded by those people who believe that the state must be invoked to regulate virtually all of our lives. I came across an article recently written by such an individual. It appeared on a site dedicated to international regulation of the economies of the world:www.theglobalist.com. The site never explains how this can be done without a world government with the power to enforce its regulations. The article was titled: "Rethinking the Uber Vs. Taxi Battle: How Uber could be part of the solution (instead of embroiled in controversy)". The assumption is that Uber isn't the solution.

The author is the author of a forthcoming book. The title tells all: Raw Deal: How the "Uber Economy" and Runaway Capitalism Are Screwing American Workers. You get the idea. He hates the free market. He hates Uber because Uber is making a profit at the expense of the politicians and their state-created oligopoly, the taxi industry.

FREE FOR ALL

He begins by describing the free market as a free-for-all. In fact, it is the state that provides the free-for-alls: toll-free roads built by the state with tax money. As with all such state-funded enterprises, there is greater demand than supply at zero price. This is known as the tragedy of the commons. It is the inevitable outcome of the state policy to provide something free for all. I wrote an article on this back in 1973: "The Free-for-All Society." It was short. You can read ithere.

Surge management vs. free-for-allHowever, this history also shows that many of these regulations were enacted for good reasons. Certainly careful study should be conducted to figure out the causes of the recent surge in traffic congestion in San Francisco, New York City and elsewhere.

This would lead to more definitive insights on how much ride-sharing really contributes to congestion -- or how much of that is the expected result purely of a growing economy.

Looking back at history, what has often driven regulatory interventions is the proliferation and resulting chaos of having too many vehicles on the road.

With ridesharing's popularity, it's not hard to imagine how this still relatively new service could eventually result in city after city returning to the "good ol' days" of too many drivers, not enough safety and inadequate consumer protection.

Ah, yes: "inadequate consumer protection." Protection by what? By the state. This always produces oligopolies, higher prices, and reduced service. It is the ultimate protection racket.

This is the standard critique of liberty: it is a free for all. The free market's system of profit and loss produces chaos, we are told. Government is needed to provide order, we are told. To bring order, stability, and fairness, there must be a government agent with a badge and a gun. He must point his gun at the supplier of a competitively priced service and say: "This is illegal. Don't do this again."

The history of livery services shows that it is important to regard our streets as a public utility, with the subways, buses, taxis and now ridesharing vehicles together comprising a transportation system that the public depends on.Particularly in dense urban spaces, the different components of the transportation system must be coordinated.

A balance of "competing conveniences" has to be weighed, with the public good kept at the forefront of these discussions -- instead of a much narrower focus in which companies win in the battle between Uber, Lyft and Big Taxi. Focusing on that question literally misses the all-important big picture.

He lamented the terrible situation of congestion. He lamented the fact that, wherever the free market is allowed to provide transportation services, the roads are clogged. It is all the free market's fault. It allows anyone to set up shop as a taxi driver, and this leads to long hours of traffic time.

He did not spell out exactly how this can be solved. He had no specific solution. But he knows this: something ought to be done by the government. Something will be done: a fusion of Uber and tax-subsidized rides.

It would be terrible, he said, if vans were set up to drive multiple people to exactly where they want to go, because this would undermine municipal bus lines. We mustn't have this.

We need "the right mix" of liberty and tyranny.

If ridesharing companies begin offering vans that sprint up and down the busiest and most profitable routes, such cherry picking would destroy revenue for public transit.The subways, buses, personal autos, trucks, taxis and now on-demand ridesharing vehicles together form a transportation system for moving people and goods from place to place.

Particularly in crowded urban areas, getting the right mix of these various options can make the difference between whether transportation is efficient and enviro-friendly or clogged up by congestion.

State officials have been promising us the right mix of liberty and tyranny for centuries, but they never get it right in any field. If they did, there would be no opportunities for the Ubers of this world.

We see the desperation of the taxicab oligopoly in London. It has persuaded the politicians to consider new rules governing Uber. If passed into law, Uber will not be allowed to pick up anyone until five minutes have elapsed. Uber will not be allowed to identify the location of an Uber-supplied car on the customer's cell phone. That is because the car might be around the block. This is considered intolerable by the cabbies.

The politicians and the cabbies think they can fool the public. They think the voters who use Uber will not see through this. This is not consumer protection. It is oligopoly protection. Uber can inform its clients of any such rules. It already has.

I like to quote Joe Louis on Billy Conn. "He can run, but he can't hide."

CONCLUSION

The legacy of Charles I lives on in our lives: the detailed regulation of our lives.

Step-by-step, technology is rolling back these regulations. Step-by-step, consumers are beginning to reassert their authority. Step-by-step, the extension of freedom is creating apoplexy in the thinking of the defenders of Charles I and his thousands of heirs. For these people, the whole world is a nail, and they have a government hammer. Every problem has the same solution in their view: more regulation by the government, and more negative sanctions against those who participate in voluntary exchange.

They have had an intellectual free ride for 150 years. The tax-funded public schools have given them this free ride. But this free ride is coming to an end. The Internet is providing technologies of liberation. People are regaining their power of choice.

Those who, like this author, resist this power of consumer choice do so in the name of state power. But they are convincing fewer and fewer people. The public is becoming aware of the fact that there are alternatives to regulation by the state. Profit-seeking entrepreneurs and benefits-seeking customers are coming together by means of the Internet, which is not controlled by the government. A new era of liberty has begun, and the defenders of the spiritual heirs of King Charles I are now on the defensive.

Think of the Internet as the scaffold. One by one, regulation by regulation, the Internet is beheading these petty tyrants. Price competition is the blade.

Source: Why Lovers of the State Hate Uber

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