The War on Uber and Lyft Shows How Unfree Our Economy Has Become

Americans are unfazed when they hear that you must get government permission before doing business.


The nerve of some people! Imagine coming to a city and doing business without first asking permission from local officials!

That's what Uber has done in cities all over the United States and Europe, and it's created quite a storm among politicians and licensed taxi drivers, who have held up traffic in, among other places, Boston, London, and Paris just to stamp their feet at the high-tech competition.

What is Uber? It's an innovator, and you know what means. It disturbs the regulatory landscape where protected firms have long settled in safely and comfortably. Suddenly, the advantage of being an "in" flies out the window. No wonder the regulation-spawned monopolies are upset.

To be more specific, Uber (and its competitor, Lyft) is a company whose smartphone app efficiently matches riders and drivers. When Uber enters a market, it carefully recruits and certifies local drivers. Then, using the app, people who need a ride can quickly find drivers to get them where they want to go. Customers are told fares in advance and how long they'll wait to be picked up. After the trip, driver and rider are asked to evaluate each other.

Sounds wonderful, doesn't it? You're probably thinking "yes" — unless you're a licensed cab driver, a politician, a regulator, or a progressive. (Recent progressive headlines include "Of Course Uber Should Be Regulated" [Slate] and "Why Uber Must Be Stopped" [Salon].) They're all going bananas.

Clearly the welcome wagon rolls out of sight when innovators come to town. In Paris, the government tried to mandate a 15-minute delay between ordering a ride and receiving a pickup. Fortunately, a court said no. The commonwealth of Virginia has told Uber to "Halt!," while Austin and Miami have (figuratively) posted "Uber Stay Out!" signs.

The only losers from thwarting Uber are riders, who must suffer the inefficiency and backwardness of the local monopoly, and would-be drivers who can't break into the business because of that protectionist, interest-ridden system. Did you know New York City had fewer taxi licenses (medallions) in 2012 than in the late 1930s?

What happened in Little Rock, Arkansas, is typical. Uber came to town to recruit drivers, so the city's board of directors frantically began discussing what kind of regulations they should enact. Uber says it's not a transportation company and should not be subject to the regulations governing taxis. Uber maintains no fleet of vehicles and employs no drivers. It merely helps drivers and riders find each other. But the discussion of regulations went on. Then Uber did something guaranteed to upset any government and its favored interests: it started doing business.

A member of the board of directors quickly let it be known that he would seek an injunction. It's called "injunctive relief," but who would be relieved? I've already indicated the answer: no one who deserves to be.

The statewide newspaper, the Arkansas Democrat-Gazette, assumed the voice of the ruling elite when it reported that Uber "began operating in the city without approval.… The company is known for moving into cities across the nation without complying with transportation codes that are in place."

Regarding Uber's decision to proceed without waiting for the government to act, the newspaper reported, "Ward 4 Director Brad Cazort, who had a role in negotiating terms with Uber, said the company's sudden start without following city guidelines meant they should no longer have input in the drafting of Little Rock's regulations."

That'll show them. You won't play ball with us? Fine, we'll regulate you without your input.

What is the world coming to when any company can come to a city and arrogantly do business without asking permission, in essence, of those against whom it would compete? Does the new kid in town think this is America or something? Oh. Never mind.

Americans live under the delusion that enterprise here is both private and free. It may be nominally private, but it's anything but free. Unfortunately, most people don't know what freedom is. So they are unfazed when they hear that before you can do anything of a commercial nature, you need government permission.

You were taught monopolies are bad, right? Apparently not government-created monopolies.

Land of the free? In your dreams.

This article originally appeared at the Future of Freedom Foundation.


NEXT: The Necessary and Proper Clause: Master or servant?

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  1. Governor Orval Faubus will resist these outside interlopers trying to meddle with local customs!

    1. Eisenhower counters by sending in the National Guard.

  2. Little Rock: For when Memphis just isn’t shitty enough.

  3. “In Paris, the government tried to mandate a 15-minute delay between ordering a ride and receiving a pickup.”

    Diana Moon Glampers approves.

  4. What is the world coming to when any company can come to a city and arrogantly do business without asking permission, in essence, of those against whom it would compete?

    Failing to follow orders or ask permission. Uber is officially worse than Hitler.

    1. I bet Hitler said “Uber” a lot.

      1. Especially while singing their national anthem.

  5. From the Slate article

    Left unregulated, these vehicles [cars in general] would poison the air and crush huge numbers of innocent pedestrians.

    Remember, the only thing preventing people from driving down busy sidewalks and bowling over pedestrians is the requirement that you be able to parallel park.

    1. Surprisingly, though, the article is actually supportive of Uber. Did Richman even read it? The closing

      But you don’t need rules that specifically discriminate against rides for hire. The right way to think about this panoply of rules is that it’s all part of a regulatory structure designed to make single passenger automobile traffic and one-car-per-adult the normative American lifestyles. Anything you want to do around driving yourself is presumptively legal, and anything you want to do around hiring someone else to drive you is presumptively illegal. That’s a worldview that’s bad for the environment, bad for cities, bad for the poor, bad for many classes of physically impaired people, and all-in-all bad for America. But by all means, regulate cars-for-hire. Just regulate them the same way you regulate the other cars.

      1. The article is supportive of Uber? When it calls for regulating Uber “the same way you regulate the other cars”? Where they are unable to say “taxis” and instead use “other cars” instead.

        So the article essentially is saying that local governments should have the right to limit one’s freedom to sell rides in their car, and to limit one’s freedom to purchase such rides as well. That’s not supportive of Uber – it’s supporting govenment’s ability to restrict our freedom.

  6. Maybe this is going to sound dickish, but why doesn’t Uber take a page out of the taxi drivers’ book? Find the major arteries into Little Rock and have your drivers block them. Don’t think it’s right that they should have to play games like this, though.

    1. Because Uber isn’t holding the guns. What power they have comes from popularity.

    2. I don’t think that tactic worked out too good for the taxi cartels. They pissed off a bunch of their customers and gave Uber free publicity.

    3. That would be Uber using force against innocent citizens who are just trying to get somewhere.

      When government Taxi monopolies do this, government won’t arrest or stop them, but I expect they would for Uber drivers. Same thing with the unions and their violence against scabs.

  7. What is the world coming to when any company can come to a city and arrogantly do business without asking permission, in essence, of those against whom it would compete?

    Next thing you’ll know, markets will be free and we’ll have wholesale child sex slavery!

    Well, that is what Tony insinuated yesterday in the Stossel post, anyway.

    1. Now I’m confused. I thought once a market was deregulated, it ceased to exist, because markets require regulation to exist in the first place.

  8. Goddamn it, I knew I shouldn’t have clicked that Salon link.

  9. “Sounds wonderful, doesn’t it? You’re probably thinking “yes” ? unless you’re a licensed cab driver, a politician, a regulator, or a progressive.”

    Disagree. Many progressives have made a “hipster exception” to the regulation of Uber like they have for food trucks. Of course, this can never be applied to any other industry or the world will come to an end.

  10. Regulation in these markets is going to be a tricky situation. Each state is going to have a battle on their hands. I’m torn between the two ridesharing services but I’m starting to lean towards Lyft because of this write up http://lyftgyft.com/compare-tr…..companies/ which has a nice Lyft vs Uber breakdown that I recommend everyone check out.

    1. I agree. You can regulate the market but that will only go so far. I like your Uber vs Lyft comparison. It goes hand in hand with one I found myself:

  11. One place where you can see this over regulation in almost every city is at the airport. I drive with Lyft and Uber in Seattle, and you are currently not allowed to pick up passengers at the airport. This regulation should be removed so that Uber and Lyft can compete freely with taxi companies on these grounds. I have posted about this at http://www.lyftdriverpromo.com

  12. It’s too bad that there are so many regulations trying to stifle the innovation of Uber and Lyft, which are changing the way we think about transportation. I have been driving for both Lyft and Uber for about 6 months, and they really are cool companies. I found a lot of helpful info at http://uberdriverpromo.com, and I got a promo code for a sign up bonus there.

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