New York legislators are close to deciding an issue driven by Uber and Lyft drivers. They are demonstrating in the streets and demanding a cap on the number of authorized ride-share vehicles.
Mainstream media began covering this dust storm two weeks ago, but the pending decision is putting international attention on the issue of licensing a sector that was credited with eliminating nanny-state legislation. After all, licensing should be confined to the singular issues of transportation safety and not overall commerce.
A cap? What is a cap?! Does this mean that a person with a clean car, a good driving record and no criminal complaints will need a special license or medallion to participate in a ride sharing service? How ironic! Don’t glance in your rear-view mirror, because that is exactly what we used to grant taxi services until…Well, until sometime next year. It’s an old school, anti-free-market concept that we surmounted 10 years ago!
Legacy drivers claim that we need a cap of 80,000 entrepreneur-drivers, ostensibly for two reasons:
- They want economic protection. (Duhh!). Drivers who were early to the party are cruising the streets in cars that are empty 42% of the time. They are waiting for their next guest. This quite ironic, because these are the same drivers that disrupted the protections afforded to taxi companies.
- They claim that capping ride-share cars will reduce congestion on crowded Manhattan streets, along with pollution and commuter frustration.
But the ride share companies are not backing their drivers. They are lobbying anyone who will listen that we must avoid legislative restrictions.
A Wild Duck Opinion…
Uber and Lyft are absolutely right in championing the fight against a legislative cap and thereby removing free-market economics from the transportation sector. These drivers are owner-operators. There is already effective vetting of safety and criminal records. They are not employees of a municpal service. They are entrepreneurs exploiting a smart-phone app to sell their own services. It is no different than programmer who uses an app to write and distribute his own software.
Putting legislative caps on the number of participants in a new-era, free enterprise service, or limiting hours of operation is antithetical to a democratic and empowered free market constituency. It smacks of a Communist mind set. The armchair economics of protestors (drivers who feel threatened by newer drivers) and even well-researched data of credentialed economists) plays no role in an organic, facts-on-the ground growth industry.
I am not suggesting that an unlicensed or criminal driver should get away without vetting. But attempting to impose restrictions that are unrelated to health, safety or the environment will have unintended consequences, such as:
- Underground apps that do the same thing with even less restrictions
- Pushing innovation and profits off shore — or —
- Ceding the market to foreign countries
Licensing has always been intended to serve the public good and not thwart innovation, growth and individual entrepreneurs. Unfortunately, it is often used to protect early entrepreneurs and exclude newcomers. That’s not how it should work—certainly not in a free country.
If you can’t take the heat of fair market competition, then innovate.