Politics vs. Economics in East Hampton, N.Y. (Gov’t. Uber Alles …)

Model TThe ongoing saga of the Internet’s Uber explains why the choice is always between widespread government or widespread wealth. The two cannot coexist. We are observing here the arrival of Uber  in East Hampton, New York, a recent event.

Uber is an Internet app; you may, anywhere in the world that it operates, request a ride from your smartphone and a local, self-employed Uber driver will respond to your need for a fee. It is called “ride sharing” because Uber serves only as the connecting point between driver and passenger; it is a middleman only. Each driver is in business for himself.

Passengers who have tried to summon cabs from places other than airports and downtown hotels will understand why Uber is expanding successfully. Add that it is very price competitive with old line cab companies.

Add also that those unionized, expensive, politically connected and regulated old line cab companies are not pleased by this new competition. No more we suppose, than were buggy makers facing Henry Ford. For a while, local governments set speed limits appropriate to horse-drawn vehicles at the behest of the buggy folk.

In our 2015 version, East Hampton legislated that any Uber driver picking up a fare in town must have an East Hampton cab license and furthermore, the address on that license must be within East Hampton, a rather small precinct. The local cab operator met this, a lot of unrelated Uber drivers who had been serving Hamptonites, did not. So the town promptly cited them for violations and is holding jail time over their heads. Uber has ceased operating in East Hampton.

Parsing this, the government is maintaining a less efficient and more costly monopoly over a new and better business model in support of political relationships. Naturally. Governments are politically, not economically, motivated are they not? Exactly why they produce no wealth but consume it instead.

Progress cannot be held back forever; Uber will find a means for motivating the politicians to permit them to operate. The cost will be borne by the passengers of Uber. (Government is never free!)

In the meantime, life in East Hampton will be a little less convenient. A price of government …

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About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much)
This entry was posted in Economics, Government, Politics and tagged , , . Bookmark the permalink.

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