Uber, Yellow Cab, Unions, Government … (But No Competiton!)

TaxiA deep 1921 depression triggered an argument between President Warren Harding and his Secretary of Commerce, Herbert Hoover. Hoover, a Republican Progressive, insisted that the government intervene in the declining economy; President Harding would not; he said it was no business of government. The depression lasted about two years. We know how long the depression faced by President Herbert Hoover in 1929 lasted. Contrary to what we often hear, he was the first Progressive U.S. President and jumped into the depressed economy with both feet. His successor, Democrat Franklin Roosevelt, continued and expanded his policies, which extended the depression into the Great Depression.

News in today’s paper at breakfast brought it all to mind. The headline was: “Calif. court rulings ominous for Uber, Lyft.” Those are entrepreneurs who use the Internet to compete with the old taxi companies. You dial Uber on your phone, asking for a ride from where you are to somewhere else. An independent Uber driver agrees to come, pick you up and deliver you to your destination in his car for a specified fare. If you accept, he does so. You are assured that he is insured, his background has been checked and his car inspected. You pay with a credit card.

So far, these folk are eating the traditional cab folks’ lunch. You needn’t go to an airport or downtown hotel taxi stand for your ride and surveys say you don’t wait as long when you call. In some places, they are cheaper. Yellow Cab and similar are increasingly unhappy with the competition. That is not expressed by supplying better service; it is expressed by lawsuits and by leaning on (mostly Democrat) politicians to throttle the new competitors.

In New Mexico, a Democrat-run state (though with a Republican Governor) the Public Regulation Commission that regulates the taxicabs ordered Uber to cease business. Uber said that its business model was not a taxi company; it simply provided an Internet service for car owners and passengers to get together so it is not subject to the PRC. It continues operations, pending lawsuits from cab folks.

In California, two Federal judges have ruled that Uber and Lyft are actually employers of their drivers, who are therefore not independent contractors. Employers are stuck with minimum wage, unemployment, overtime, workman’s compensation and other government requirements that have been avoided by Uber, Lyft et al. California is a strongly union-friendly place. If up held, this may be the end of the “ride sharing” business model. Forget a cab unless you are at the airport or downtown hotel. Then, pay through the nose …

While America was getting rich, anybody could start a new business with little interference. We are sure that candle and lamp makers were unhappy with Thomas Edison and that few buggy makers loved Henry Ford. But they did not stop those symbols of progress and millions were ultimately enriched thereby. The Internet has provided new competition for taxis, a stultified service much in need of improvement. Uber, Lyft and such provide anyone willing, opportunity to work and earn in a time of persistent unemployment. That’s a win-win, seems to us, even for the Neanderthal cabbies who are if they are willing, free to use the Internet too. But our “Progressive” governors are ganging up to deprive both the unemployed and potential passengers of this needed opportunity in order to protect political bedfellows from having to innovate. That is corruption. It is also a guarantee of the status quo and ultimately, of poverty.

Recently, some teenaged Boys in the smow-laden East got together, printed up some flyers and offered snow removal services for their neighborhood. Once, they would have been lauded as entrepreneurs; today, they were shut down by the police for attempting illegal snow removal. They had failed to file a request for a business permit and other requirements imposed by government.

The Labor Department tells us that the working percentage of the population has fallen significantly; why do you suppose, is that?

About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much) Couple of degrees in government, a few medals in figure skating; just reading and suspicion for economics ...
This entry was posted in Economics, Government, Politics and tagged , , . Bookmark the permalink.

1 Response to Uber, Yellow Cab, Unions, Government … (But No Competiton!)

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