Friday, June 19, 2015

Uber and rules

From the comments at Cathy O'Neil's page:
Uber is a worldwide company; NYC type medallions are found in just six US cities. There’s absolutely no evidence that inflated medallion values in these six cities had anything to do with medallion owners pocketing obscene taxi profits at the expense of riders and drivers (there are no obscene taxi profits in any city; medallions are a financial instrument, and inflated in line with comparable instruments). The “heroic innovators versus corrupt protectors of the status quo” framing is designed to prevent anyone from actually examining whether Uber can produce taxi service much more efficiently than a reasonably run Yellow Cab, or where these massive efficiency gains might come from, or whether they are sustainable over time, or why no one else had ever thought of them.
This was generated by a question that Cathy posed:

On the one hand, it does seem to be a different act to raise your hands on Broadway versus using an app on your phone. But by the time we have chips implanted into our heads, just thinking the words “hail a taxi” might do the trick, and that’s where the grey area lives. Or, put it another way, yellow taxis might also want to have hailing apps, and in fact they really should. 
I can attest that yellow cabs have hailing apps in some cities already, Seattle for example.  Should that allow those companies to evade transportation regulation?  This is very much like the sales tax issue with Amazon -- slight differences in business model lead to a discussion as to whether the generally accepted rules apply at all.  In general, I think there are a lot of pernicious regulations and there is a lot of things that can be done to make things more efficient. 

But I also believe in treating groups fairly.  I don't think that technical exceptions to rules should be the goal -- rather we should overturn bad rules.   I'd have more sympathy if the new entrants were selling their app to all comers (pure software company) or if they were pushing for the rules to be revised wholesale into a new regulatory regime that all of the relevant players could participate in.  It isn't always the case that the status quo is good, but exception-based regulation seems to be a dangerous way to proceed as that can create a less competitive market.  Even Ayn Rand thought that was bad (see the first part of Atlas Shrugged and Taggart Transcontinental). 

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