Less cronyism, more competition a win for both drivers and riders
There are 40,000 Uber drivers in London who may soon lose their livelihood, and 3.5 million passengers who may lose their preferred method of transportation. A recent surprise move by the city’s taxicab regulator to revoke the license of the city’s only ride-sharing service is currently under appeal. Libertarian National Committee Executive Director Wes Benedict urges London regulators to grant Uber its appeal and renew its license, along with any other transportation network company (TNC) or taxi services keen to compete for Londoners’ money.
“This license revocation is an example of the type of crony capitalism we experienced in Austin, Texas,” said Benedict, who ran for both city council and county commissioner in Austin. “It was a win–lose situation: Uber and Lyft drivers and their ride-sharing passengers lost, and Austin’s three taxicab-franchise owners won. The taxis were granted both an oligopoly and the inflated prices, set by bureaucrats, that such oligopolies can get away with when politicians interfere. When free markets are allowed to flourish, business transactions are win–win. Willing drivers and willing riders agree on a price and service, and they do business.”
In 2015, the Austin City Council imposed stifling ride-sharing regulations, which were upheld by a misleadingly worded referendum in an election with low voter turnout — despite the fact that ride-sharing services led to a decrease in drunk driving. So, in mid-2016, the city’s two TNCs, Uber and Lyft, ceased operations there, leaving 10,000 drivers out of work, and even more passengers scrambling for reasonably priced rides.
“All too often, when an industry is highly regulated by government it gives established companies an unfair advantage,” Benedict said. “Competition is shut out when consumers succumb to the scare tactics of crony capitalists about the safety of newer goods and services.”
Luckily for Austin riders, Texas passed legislation in May 2017 moving the regulation of TNCs to the Texas Department of Regulation and Licensing, which finally did grant licenses to Uber and Lyft. Not only did they bring better service to the people of Austin, they became public benefactors in the aftermath of natural disasters.
“When companies are set free to pursue success, their owners can be capable of tremendous generosity,” Benedict said, referring to Uber’s donation of $300,000 worth of rides to and from shelters (up to $50 each) to Houstonian victims of last month’s Hurricane Harvey. “Ironically, some of those shelters were located in Austin.”
Uber has also faced hostility from regulators in Los Angeles, Chicago, San Francisco, Atlanta, Portland, Seattle, and many other jurisdictions throughout the United States and the rest of the world. In almost every case, established transportation interests had called for protection from competition.
“Libertarians believe that government regulation is ineffective at guaranteeing consumers the best service at the most reasonable price,” Benedict said. “Regulators can’t replicate or replace the effective, clear signals provided by businesses that self-regulate by participating in the market and protecting their reputations by repeatedly satisfying customers, and generously making up for it when they don’t.”
Libertarian Party leaders have not only stood on the forefront of calling for ride-sharing competition, they’ve also made a practical regulatory difference. In Dec. 2015, while the city of Austin was busy over-regulating TNCs, Libertarian Party leaders met with the commissioners of Collier County, Fla., and introduced a bold proposal to deregulate the entire local taxicab industry. Their proposal passed, and Collier County became a leader in establishing a competitive transportation market by rescinding its taxi, limousine, and other vehicle-for-hire regulations.