Uber Under Siege by Government Regulations Around the World

Uber is an amazing idea — in theory and in practice.  The cab-alternative has taken off across the globe, based solely on the convenient way it improves upon the traditional American taxi cab experience.  If you’ve never taken an Uber, John Fund describes it this way:

Uber has built a better, tech-savvy “mousetrap” for transportation services. Uber drivers’ cars are often newer and cleaner than traditional cabs, and customers can easily request upgrades. Drivers are screened, and a passenger can see a picture of the driver and his or her customer-service rating before getting into the car. Low-ranked drivers can be and are removed from the system, accountability that’s missing from most cab companies.

Many Uber driver use their jobs to earn a supplementary income around a more traditional 9 to 5.  Since the drivers can work whenever they want, it gives them flexibility to earn money during their “off” hours.

However, no cool new technology goes unpunished from unnecessary government regulation, right?  Fund describes the problem. “Basically, the taxi industry is heavily regulated almost everywhere. The deal is that cab owners put up with a lot of picayune regulations in exchange for price floors or a limit on the number of cabs that are licensed to operate.”

Since cabbies don’t like to have their turf encroached upon, governments have been giving into the demands of taxi drivers, punishing Uber simply because of their entrepreneurship and their success.  In Madrid, this is happening now as twenty thousand taxi drivers have been on strike for two weeks to protest Uber and other driving apps. Riot police have been called, and the drivers have lit bonfires, frustrated traffic, and even blocked roads.  In Madrid, the taxi drivers have been hoping to decimate Uber as happened in Barcelona.  Recently, the Barcelona government passed new regulations that require people to call app-based rides an hour in advance. This, of course, means that people on the move won’t be able to get the transportation they need when they need it, resulting in more spontaneous hailing of cabs.  Realizing that these regulations were meant to undercut their business, Uber and its competitor pulled out of the city, putting 3,500 jobs at risk.

Fund describes the global pressure that these ride share apps have been under:

Uber is under pressure all over the world. After taxi drivers violently attacked Uber drivers in Istanbul, Turkey’s authoritarian president Recep Tayyip Erdogan moved to ban Uber last June. “That business is now over. There is no such thing anymore,” he said. In Hong Kong last month, cabbies vented their anger at online ride-hailing services by smashing two taxis with hammers. Hungary and Denmark have both banned Uber.

Good grief!  The government should not be in the business of shutting down entrepreneurs (drivers or companies), but should instead look to the future for the coming transitions that inevitably will follow new technology.  That’s the beauty of a free market society – it encourages competition and innovation.

The world will be satisfied by no less.

Image Credit: Mark Warner on Flickr

Hat Tip: National Review