France

Why Banning Uber Isn't the Solution to French Cab Drivers' Problems

Choice uber alles.

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A specter is haunting Europe — the specter of capitalism.

French cab drivers are frightened out of their gourds by Uber, the ride-for-hire app. So last week they overturned cars, burned tires and incited general mayhem. Then one of them said, evidently with a straight face, "Why isn't the government enforcing the law? It's apparently possible not to respect the rule of law."

The complaint was not quite so weird as it sounds: Recent French law prohibits both the ride-sharing app Uberpop and unlicensed taxi-driving, but Uber has continued to operate while awaiting a final court decree that would shut it down. But in another sense it is grotesquely wrong: meting out indiscriminate violence to demand the government threaten further violence — operation of Uberpop can get you two years in a French prison, kid you not — to make consenting adults stop engaging in free and peaceful economic activity. On Monday French authorities arrested two Uber executives for the unpardonable sin of offering people a product they really seem to like.

And they're not alone. As The Wall Street Journal reported Friday, "Courts in Spain, Germany, Italy and the Netherlands (also) have banned Uberpop." The reason is that Uber's ride-sharing and ride-for-hire services are immensely popular — far more popular than traditional taxi services. So the traditional taxi services want the government to do, by force, what they cannot do themselves: keep Uber from enticing customers by offering a more appealing product at an appealing price.

Which is pretty astounding, when you think about it. It would be like telegram companies trying to outlaw telephones. Like record companies trying to get digital music banned. Like the Postal Service demanding prison time for anyone using email.

Taxi drivers have some legitimate beefs, of course. They often have to pay outlandish sums for the privilege of doing business. Many places restrict who can drive a cab by requiring a medallion, then limiting the number of medallions — which drives the price of one into the stratosphere. Boston, for instance, allows fewer than 2,000 medallions, each of which costs upward of $700,000. Boston cabbies end up having to pay medallion owners fees of $100 or more for a single driving shift. Not surprisingly, this translates into exorbitant cab fares.

Uber, which has been largely unregulated, has not had to put up with any of that. This naturally frosts the shorts of traditional cab companies. But the appropriate answer is to relax the rules that constrain them — not to ban the competition. Yet banning the competition often is the reflex reaction from both government and the private sector. Here in Virginia, the state slapped Uber and its closest competitor, Lyft, with cease-and-desist orders after they began operating in the commonwealth. Fortunately the state eventually relented and allowed the services to operate under certain conditions, such as background checks and insurance coverage for all drivers.

But many states, including Virginia, frequently stifle competition in other ways. Thirty six have some form of certificate-of-public-need (CON) regime. The CON system requires hospitals, physician practices and other medical providers to get state permission before they make major new investments — and sometimes even minor ones. Existing providers often exploit the system to keep potential competitors from opening up shop.

Many states also use occupational licensing to restrict who can enter certain fields. Half a century ago, only 5 percent of occupations required some kind of permission slip from the state. Now nearly one-third do. The requirements often have little relation to public health or welfare. As a Brookings Institution paper points out, in many states you face stiffer licensing requirements for becoming an interior designer than for becoming an emergency medical technician. Who knew the interior-design cartel had such good lobbyists?

In France, President Francois Hollande said Uber must be shut down and its "vehicles must be seized." The AP reported that Interior Minister Bernard Cazeneuve "rushed back from a trip to Marseille to meet with taxi unions," as if consensual economic activity was some sort of titanic natural disaster (which, in France, it well might be). Uber "must be closed," he fumed. "The government will never accept the law of the jungle."

Now that's rich. Like Pope Francis, who has said market economies are "lacking in ethics," the interior minister has a funny way of looking at things. Civilized societies — societies that respect the inherent dignity of every individual — recognize the truth in Milton Friedman's observation: "The single central fact about a free market is that no exchange takes place unless both parties benefit." Ford Motor Company will never sell you a car at the point of a gun; free enterprise depends, above all, on mutual consent. It's the uncivilized brutes who try to get their way by force.

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25 responses to “Why Banning Uber Isn't the Solution to French Cab Drivers' Problems

  1. The US is not so far behind this level of derp as it used to be. Frightening, indeed.

  2. Fucking Henry Ford! You know buggy whip makers gotta feed their families! We oughta ban those dangerous Model T contraptions!!

  3. Whatever happened to those comments about A Barton Finklestein or whatever, the little funky poems?

    Back on topic, this one basic fact, that business relies on voluntary agreements between the parties and government relies on force, would seem to be such an obvious fact of life, like water flowing downhill, that I usually forget that a lot of people simply don’t see it that way. Why these people are so blind to the obvious is beyond me.

    1. Fr?re Jacques, fr?re Jacques,
      Dormez-vous ? Dormez-vous ?
      Sonnez les matines! Sonnez les matines!
      Ding, dang, dong. Ding, dang, dong.

      Did you sing that in grammar school? You did, didn’t you, you fucking commie!

      1. *sniff* You’re the one who seems to have memorized it.

    2. For scarecrows and woodchippers everywhere:

      A. Barton Hinkleheimerschmidt
      His name is my name, too!
      Whenever we go out people always shout,
      “There goes A. Barton Hinkleheimerschmidt!”
      LALALALALALALA….!

      1. You are my hero! *swoon*

    3. Who said they’re blind to it? There was an agreement between the gov’t & these people that they’d have an oligopoly. They’re so mad about it that they’ll riot. Authorities have to uphold that agreement or nobody’ll trust them to scratch your back when you scratch theirs any more.

      They’re not blind to the fact that the unregulated competitors serve consumers better. They see it quite clearly. But the consumers aren’t organized & haven’t made a deal like the regulated businesses have. The authorities know where their bread is buttered.

  4. Transportation in France will soon be by camel only. And the camel will be wearing a burqua. Limeytardia soon to follow.

  5. A friend of mine made $700 last Friday driving for Uber in Portland, Maine. He averages $200 a night. Not bad. Not bad at all. Except that he’s putting tons of miles on his car and I doubt he’s setting aside money for taxes.

    1. My friends aunt’s dog made $8651 last pretending to be a cat on the internet.

      1. On the Internet, nobody knows you are a dog?

  6. I doubt this is about Uber as much as it is about a warning shot to those who would try to expand other businesses into realms outside the kickback, crony fiefdoms erected. This is why the war on cash must be fought. Govts get us to go full digital currency and any hope at subversion goes with it.

    *Bitcoin not included.

    1. Alternative currencies will always emerge so that black markets can operate. Look at any prison.

    2. Exactly. Their credibility is at stake.

  7. Yeah,can’t have people offer a better product and take money from a protected industry that the government sucks money from..On the same note,the IMX bank was created due to the effects of Smoot-Hawley law that,along with similar laws around the world,choked off trade and made the ‘depression’ worse.

  8. I started with my online business I earn $58 every 15 minutes. It sounds unbelievable but you wont forgive yourself if you don’t check it out.
    For information check this site. ????? http://www.workweb40.com

    1. But are you an uber driver?

  9. “The government will never accept the law of the jungle.”

    I wasn’t aware that tigers were capable of such irony.

  10. And they’re not alone. As The Wall Street Journal reported Friday, “Courts in Spain, Germany, Italy and the Netherlands (also) have banned Uberpop.” The reason is that Uber’s ride-sharing and ride-for-hire services are immensely popular ? far more popular than traditional taxi services.

    I recently read that up until the arrests, Uber, which only launched middle of 2014 in France, had 1 million drivers there. I’m glad to hear about its popularity because that means not everyone shares the collective derpitude of the government and taxi cartels there.

    1. When you can get a relatively unskilled job that pays well, you take it, especially in a second-world economy like France.

      I suspect that many of Uber’s drivers there and here mouth all the usual platitudes about social democracy even while they’re working to undermine it. That’s one of the reasons why one of the best examples of markets innovating solutions was christened the “sharing economy,” as though selling rides or couch-crashing opportunities were examples of charity and compassion rather than win-win trading, aka capitalism.

  11. How is it that the taxi cartel is so powerful in every country on earth? I could see it being more or less powerful depending on the region but no – it is like a planetwide mafia.

    1. Concentrated benefits, dispersed costs. /MF

      Taxi drivers will riot when they lose their monopoly, but who’s going to riot when monopolies are made?

      1. Concentrated benefits, dispersed costs. /MF

        Right but there are other long-time monopolies that are peacefully allowing elements of privatization in various countries. Train and bus service, for example. I want to know why taxi service specifically is so, uh, “resistant” to change.

        1. Mass transit workers operate thru their unions, who are averse to wildcat actions because the union bosses have positions to protect. Taxi drivers aren’t tamed.

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