May 22, 2014
I’m getting closer to being a middle-aged guy – well, closer to middle age than a young guy. As such, I remember some of those things that commercials sometimes mock middle aged guys, or older guys than me yet, for remembering. Like Pintos, vinyl records, those plastic things you used to have to put in the middle of some records to play them, printed books and typewriters.
When I went to school I read printed books and typed essays on typewriters. Yup old fashioned (though electric by that point) typewriters. I also was a bookseller many years ago. So I like old stuff like antique typewriters and antiquarian printed books (as anyone who has been over to my place can attest to). I don’t, however, run my business on them and I become fairly uneasy when I see efforts to restrict new technology. More on that below.
Also, books and printing, indeed almost every conceivable other technology that is of use to people, have evolved. Try and think of one that hasn’t. It’s tough. Typewriters became computers. Rotary phones became smart phones. The telegraph and transatlantic cables have become fiber optic cables and satellites. Printed books became e-books. And so on.
You get the point. And of course I don’t have to tell you any of this – because it’s obvious. Well, one would think it’s obvious. Competition and technology lead to innovation and change.
That’s why I don’t think that regulators should pass laws saying, for example, that all books must be printed using moveable type, rag paper with calf leather covers. Or that students must type their essays on antique Underwoods. Of course this sounds rather nonsensical.
Despite the apparent reason of this view in a few high profile markets – notably, and growing it seems for this post, taxis – protests appear to be erupting in many parts of the world over the growth of ride-sharing apps like Uber, Lyft, etc.
I’m sure most of you have seen many articles and posts on this already. But on my daily media sweep earlier today, three more caught my eye: Europe’s cabbies decry competition from Uber app (Times Union), Cab drivers call taxi commission ‘monopoly’ in lawsuit and Boston taxi drivers’ union to protest ride sharing service Uber.
As reported in several of these updates, Uber opponents (a Boston taxi union and Italian taxi drivers in Milan) organized protests against Uber arguing that the rider-sharing app and similar technology “pose a threat to the public”, “put residents, tourists and business travellers at risk”, are “unfair competition” and that there must be a “level playing field”. Some cities (e.g., Brussels) are even banning or discussing banning or curbing the ride sharing technology. Banning technology?
Like several other recent and ongoing local regulation (market restriction?) cases, including the ongoing efforts by Tesla to market cars directly to consumers in a number of U.S. states, ongoing liquor retailing debate in Ontario and recent Toronto food truck regulation tussle, a common theme being raised by Uber and Lyft opponents is consumer safety. Notably, few or none of the opponents appear to have raised fixed taxi rates or license quotas in the discussion. Ride-sharing app opponents also do not appear to be devoting any serious effort, at least to the extent I have seen their arguments, to explaining how license quotas and fixed rates/tariffs correspond to passenger safety. That may be because it’s a very easy claim to make, but very difficult to support. And, as I’ve written before in relation to other local regulation cases (including the recent and ongoing local regulation tussles above), it is perfectly possible to establish common requirements to protect consumers without establishing quotas or regulating rates. My own profession, law, is it seems to me one of the clearest examples.
In the case of the Boston-organized protest linked above, Uber replied with a quote that I thought goes straight to the heart of the matter – i.e., that this is an innovation and competition issue:
“Rich taxi medallion owners should spend their time improving customer service, serving underserved communities and investing in new, safe and reliable vehicles, rather than complaining about what Bostonians already know – Uber is the safest, most affordable and reliable ride in Boston and Bostonians rely on Uber to get around the city” (Natalia Montalvo of Uber in an email).
Neelie Kroes (European Commission) took a similar stance in Europe, following the Brussels ban, scoffing:
“Are the police now going to spy on our phones to see when we are making Uber bookings? Don’t you think the police in Brussels have something better to do?”
To me, like food trucks competing with bricks and mortar restaurants in Toronto and Tesla competing with historic dealer distribution networks in the U.S., Uber, Lyft and other ride-sharing technology is simply another example of the inevitable change that naturally flows from competition and technology – like the shift from typewriters to smart phones, moveable type to desktop publishing and many, many other examples.
As I’ve written many times before on this and similar developments where the market is operating naturally, what should regulators do in response to these changes? As very little as necessary: encourage and develop conditions for competition; minimize entry or regulatory barriers; and, if necessary, and only to the extent necessary, establish regulations to protect consumers (e.g., minimal safeguards for consumer safety, etc.).
But, ban the computer, smart phone or in this case ride-sharing supported by new technology? Don’t be silly.
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