New York City Interferes in the Free Market with Uber Regulatory Regime

New York City now claims it is acting for the public good by restricting the number of ridesharing vehicles in the city, and establishing regulations for the ridesharing labor market.

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New York City is attacking the ridesharing business model, claiming companies like Uber are not operating in the public interest (New Boston Post).

You’d have to have a heart of stone not to feel bad for New York City‘s taxi drivers. Right?

After decades of running an egregiously lucrative monopoly, padding the campaign accounts of the city’s Democratic establishment in the process, and offering sub-par service at prices that only a millionaire could afford, New York City’s longsuffering taxi drivers now have to deal with the dreaded C-word: Competition!

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It is most unfair. Just like any other business…say a restaurant, a clothing store, a bar, a movie theater, a barbershop, a bowling alley, or a dogwalking business, taxi drivers must now compete in a free marketplace…where the quality of their goods and services will be put to the test, and consumers will have the right to choose based on price, quality, and service.

According to the Big Apple’s yellow cab drivers, this is the height of injustice, and their friends in local government agree with them. Uber, Lyft, and other ridesharing services represent “runaway capitalism” and “too much competition” so local government must, of course, step in to save the day, right the wrongs, and “regulate” ridesharing for the benefit of all!

We should thank God for the heroic efforts of local public servants who are taking on Uber and its vile mission.

At least that’s what Silicon Valley-based journalist Steven Hill, writing in the New York Daily News, would have us believe. Author of Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers, Hill deems ridesharing and homesharing applications such as Airbnb and Uber a clear and present danger to the health and wellbeing of Americans:

“Over time both of these private corporations, in typical Silicon Valley fashion, became greedy in their pursuit of market monopolies. They have refused to work with cities to enact sensible rules and regulations that would minimize the increasingly obvious downsides of their services.”

If Uber is such a monopoly why does it have robust competition from Lyft, Juno, and Via? Why are new ridesharing applications popping up all the time? If Airbnb is such a monopoly, why does it have considerable competition from Vacation Rental By Owner (VRBO) and Booking.com?

Mr. Hill seems to easily forget: the real monopoly was the near century that yellow cabs spent running a transportation cartel in the city; a cartel that priced all but the very wealthy out of taxi service.

Of course, anyone who has ever lived in New York City has had their fill of horror stories with cabbies: rude and surly drivers, terrible driving, sky high prices, and difficulty in hailing a cab come to mind. However, that is just the tip of the iceberg. Virtually any New Yorker would concede that many taxi drivers were disposed to cheat customers as well.

Setting aside the ethics of NYC cabbies momentarily, Uber critics contend that the pay is insufficient for Uber drivers. If that is the case, then why do they do it? This very simple question seems to blow a hole in their entire argument. If the pay is so miserable, and thousands of Uber drivers are “living in poverty” according to Alexia Fernandez Campbell, writing in Vox.

Uber drivers do what they do because it is better than the alternative. Some people enjoy spending the day driving around and listening to the radio or music, or talking to their passengers. I have had hundreds of great conversations with Uber drivers in dozens of countries.

Other people would prefer working as a barista in a coffee shop, being a dogwalker, working as a linecook, or taking care of children. These are all jobs with minimal pay. That is entirely understood. They are all also low-skilled jobs that virtually anyone could do.

The American Left has a fundamental disconnect when it comes to the labor market. They look at Uber, see that drivers in NYC are making USD $14 an hour (according to one study), and say that that constitutes living in poverty. Who is living in poverty making $14 an hour?

No one is forcing these drivers to do what they do. That is entirely their choice. If they are unhappy with the work, then they have every right to pursue another line of work. If they feel that Uber is not paying its drivers enough, then they can work for an Uber competitor, or start their own business model.

According to Hill, “Now is the time for a new, modern regulatory regime for the digital age. Just as in the past, New York City authorities are right to step in and harness ridesharing for the public good.”

Ridesharing already operates in the public good. It involves thousands of daily contracts between small business owners (drivers) and consumers (riders) operating in a free market place. Ridesharing does not need “regulation”…what it needs is for the government to stay the hell out!

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