This is a longish, though very interesting article, on a development in the transportation industry and one man's ongoing battles with government officials who try to block his innovations in order to protect others already in business (their economic constituents). I shall try to do it justice but recommend a reading of the entire piece.
The individual is Travis Kalanick and he runs a company called Uber. Mr Kalanich is your typical silicon valley computer geek who in the past has developed and run several companies utilizing peer-to-peer technology, such as for music sharing. As a result he has been sued several times including being sued ...for $250 billion (yes, with a "b") by 30 or so media companies
. He's had his financial ups and downs and during one of his up periods he was casting about for the "next big thing" when he hit upon an idea where people could press an app and, for a premium, get extremely quick limo service instead of waiting for, say, a cab.
He began this service in San Francisco and it was an instant hit with customers if not the existing transportation services and their protectors, the regulators. In fact, he describes a confrontation with a SF bureaucrat thusly: Oh man, I've never. . . . She was fire and brimstone, deep anger, screaming.
But to no avail. She had no power to regulate his service since his wasn't a taxi service but a limo service which is regulated by the state, not the city.
Since then he has branched out to NY where the taxi lobby tried to block him but city officials were cooperative; Chicago where they tied to change the rules to block him (to no avail); Seattle, no problem; Boston where a cease and desist was issued because the state's Division of Standards didn't have a standard for using GPS in commercial vehicles.
The company ignored the order; and the worst city of them all for hindering his efforts: Washington, DC, the clash with regulators in the city where they order red tape by the truckload
By now Kalanick had developed a loyal and appreciative customer base and he mobilized them to send emails and tweets to city hall to offer support. The result: Supporters sent 50,000 emails and 37,000 tweets.
(Later he was to use the same tactic in Chicago to get the bureaucrats led by Rahm Emanuel to see the light. It was so successful it worked)
The regulators [in DC] didn't give up, however. In July, the city tried to change the law—with what were actually called Uber Amendments—to set a floor on the company's rates at five times those charged by taxis. "The rationale, in the frickin' amendment, you can look it up, said 'We need to keep the town-car business from competing with the taxi industry,'
Mr Kalanick's says of the DC attempts to block him: "It's anticompetitive behavior. If a CEO did that kind of stuff—you'd be in jail."
Kalanick was fortunate in that he had plenty of start up capital, could hire top notch legal talent to defend him, and was willing to fight to achieve victory over the government forces which opposed his efforts. But what about the little guy who doesn't have these advantages, for as Mr Kalanick says, "The regulatory systems in place disincentive innovation. It's intense to fight the red tape."
And that is one of the reasons our economy is so sluggish.http://online.wsj.com/article/SB10001424127887324235104578244231122376480.html?mod=WSJ_Opinion_LEADTop