by Mary Katharine Ham
Liberals and Washington Post, meet regulatory capture. Regulatory capture, liberals and Washington Post. The fight in major metropolitan areas over Uber has instructed a new generation of liberals on this concept, even if they call it Stockholm Syndrome:
What started out as a fight over price and quality has turned into a fight to win the hearts and minds of regulators.
That fight took an ugly turn this month when Seattle’s Committee on Taxi, For-Hire and Limousine Regulations voted to limit the number of vehicles UberX and two similar services could operate to 150 each, down from an estimated 2,000 that had been in service.
Explaining her rationale for the vote, city council member Sally Clark, who chairs the Taxi Committee, explained, “No, I don’t want to ‘temporarily’ kill innovation, but I do want to buy a year for the taxi world to adapt.”
Clark’s rambling blog post and a subsequent one written after the vote give all sorts of explanations as to why it is in consumers’ best interests for governments to protect taxi and limo services from market competition even when every other business large and small must compete on its own merits. These include concerns over the training of drivers, adequate insurance, and protecting consumers from unfair pricing.
She also notes that most of Seattle’s drivers are immigrants. And those immigrants may have had to pay as much as $150,000 on the “gray market” for the right to operate for-hire vehicles, because, Clark notes without irony, Seattle hasn’t issued new medallions for over twenty years. (The City Council issued a moratorium in 1990). And anyway, she concludes, companies such as Uber have raised millions in “massively successful” venture financing rounds, suggesting, I guess, that they are all run by fabulously rich people.
The incoherence of regulators such as Clark isn’t much of a surprise. Like the taxi and limo drivers they oversee, the regulators haven’t had to deal with disruptive technological change for decades. The committee was created to protect consumers, of course, but after all this time working exclusively with the industries they regulate, it’s not surprising to find something at work akin to what psychologists call Stockholm Syndrome.
And it may well be that the same technology that makes UberX possible has also become a far more effective regulator than out-of-touch regulators. Consumers, not bureaucrats, rate the quality of the vehicles and the rides, and do so at the time of service, not at random checkpoints. The smartphone calculates the cost of the ride and takes payment, reducing the opportunity for drivers to cheat the rules. Constantly-updated data lets everyone know where traffic is worse, and when there are more drivers than passengers, or visa-versa, optimizing the number of vehicles on the road not once every twenty-four years but in real time.
Welcome, literal limousine liberals, to the downside of regulation. This is why Sen. Marco Rubio is making waves on this issue. “Technological disruption” is the gateway small-government drug of my generation. Com on in. The water’s fine! Rubio wants to thwart the powers that be in Miami and get Uber operating there. Smart. This ride home from the club brought to you by…your Republican senator?
Sen. Marco Rubio was looking to score a quick ride in Miami, but when he tapped his white Uber button on his smartphone, the Florida Republican came up empty.
“I was bragging to someone about this service in Washington and I clicked onto my app … and up comes a message saying, ‘Sorry we can’t pick you up in Miami because the county commission won’t allow it,’” he recalled.
That incident was the impetus for Rubio’s Monday visit to Uber’s Washington headquarters, where he used the struggle of a growing and fashionable tech company to underscore his case concerning overburdensome regulations.
“We should never allow government power and government regulations to be used to protect an establishment incumbent industry at the expense of an innovative competitor,” he said.