Uber Undermines Argument for Regulation
June 27, 2014
While taxi drivers across the globe go on strike to protest Uber, the internet-based passenger transport service continues to enjoy great success, reports the Wall Street Journal. In fact, London taxi drivers' protest of the company only boosted Uber further, with new Uber sign-ups rising to eight times the normal rate last week when riders were unable to hail traditional cabs.
Uber is revolutionizing the taxi industry. In more than 100 cities in 36 countries, riders can order cars via their smartphones. The Uber app immediately gives them a wait time, and the company monitors their drivers. Uber is valued at $18 billion, more than the market value of Avis and Hertz combined.
For years, taxi commissioners have protected existing drivers from competition, through limiting the number of taxi licenses available or the number of cars a company can own. Regulations even micromanage the way that customers are allowed to hail rides -- all regulations that benefit drivers at the expense of consumers.
Uber is challenging the notion that the taxi industry requires regulation, and some lawmakers are responding. Recently, vice president of the European Commission Neelie Kroes criticized the anti-Uber protests and urged Europe to embrace the new model. Kroes wrote, "If you design systems around producers it means more rules and laws...and those become quickly out of date, and privilege the groups that were the best political lobbyists when the laws were written."
Source: L. Gordon Crovitz, "Uber Shocks the Regulators," Wall Street Journal, June 15, 2014
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