Times change and along with them economies. Uber and Lyft have hammered the almost ubiquitously crony taxi cab industry around the world. Yes, some of those medallion loans will go south. The banks and the cab companies made bad bets and now they lose. That is how markets work.
Who knows? Maybe teleportation devices will put Uber and Lyft out of business next year. Creative destruction.
If there is any city that needs access to Uber (though probably eclipsed by New Orleans and Las Vegas) it is Austin. The place is full of politicians, college students, musicians, and UT football fans. All of these folks like to drink. But that is precisely why Uber is banned. The taxi cartel didn’t want competition for the sauced so they got their crony friends to chase the ride sharing companies out.
Now DUIs are back up.
In other words Uber is more sustainable. Less fuel. More miles. More passengers. Less carbon. (For those who care.)
I just came back from DC and I saw quite a few Uber and Lyft vehicles. More than even a couple of months ago.
The taxi industry in Australia is feeling the Uber heat and apparently the cronies in the industry have been able to secure a bailout from the government because no one wants to use their service anymore. Other industries which consumers have forgotton are now lobbying for taxpayer money too.
Why, other than blatant pro cab company cronyism is such a restriction being put on Uber drivers? Uber is a better product than your standard cab ride. It makes more sense than the antiquated cab companies of old. In most cases it’s cheaper and the service better than what we used to have. But the buggy whip…er…I mean… taxi companies around the world have worked to shut out competition by enlisting crony friends in city governments in an effort to stop legitimate progress.
He wanted a bailout because Uber and Lyft have hammered his business. He leveraged himself to the hilt financing more taxi medallions than he should have and now he’s crying in his beer because he is losing business and medallion prices are tanking. Boo hoo, he wants his government protected monopoly to remain insulated. Unfortunately for him the market has come calling and creative destruction is doing its thing. Even Freidman’s new crony buddy, Mayor DeBlasio probably wont be able to save him.
When it comes to the sharing economy. Just do it.
Beat the cronies back.
Over the medium to long term the only way a firm or a small group of firms can maintain a monopoly is if it has the backing of the government.
If a firm in a free market attains monopoly status, and this can happen, it won’t last as new firms with better equipment, techniques etc. will enter the market. If however a firm can get in good with the government, then the monopoly firm can get its politician buddies to regulate away competition.
I think at this point I may just have to avoid taxis all together. It’s probably worth it to go out of my way to use services like Uber and Lyft. Thing is, even with all the crony capitalism, with all the inside dealing, the licensing, etc., I probably still won’t have to go out of my way to get a ride from Uber or Lyft. You know why? Because the ridesharing companies want my business and respect me as a customer.
This is almost as bad as the taxi association guy in Chicago who threatened to out local gay alderman if they voted to let Uber operate within the city.
The taxi guys (not the drivers for the most part) are used to getting their way. They are used to cozy relationships with city halls all across America. What they aren’t used to is market pressure to increase the value of their service for their customers. Now,
The fight against people trying to make an honest living and against customers who want a higher level of service continues on in Austin Texas. The taxi industry knows that their business model makes no sense these days so it is trying to regulate its survival. Across the country cab companies are leaning on their contacts in local government to make life as hard as possible for Uber and Lyft. And of course for you and me too.