There’s nothing like watching a rent-seeking industry fall on its own sword.
This week, taxi drivers Perth staged a mass protest outside Parliament House against ridesharing company Uber, with some 200 drivers parking their cars, shutting off their meters, and blockading streets. The protestors claim that car-sharing services like Uber avoid regulation, drive down fares, and cost taxi drivers their jobs.
In a predictable twist of irony, the taxi drivers actions have worked to Uber’s benefit, both giving them free publicity and driving a huge increase in sign-ups:
Uber spokesman Simon Rossi told ABC local radio the protest did little but help his company gain new customers.
“What we saw yesterday was a 500 per cent increase in riders coming to our platform,” he said.
“The Premier also, if I can summarise, said something like you know the world is changing, people want choice and as long as that choice is safe, reliable and accountable they want to support that.”
“We urge our counterparts in the taxi industry to rise to the occasion, instead of attempting to stifle healthy competition and consumer choice.
“Last year, the governing Liberal Party in Western Australia voted at their state conference to remove the regulatory barriers that prevented services like Uber from operating…
Mr Rossi said there were 100,000 passengers in Perth signed up to Uber and more than 1,000 partner drivers in the service…
As argued frequently, ride-sharing is an economic no-brainer, providing greater choice to consumers and lowering costs, while also improving productivity by facilitating a more efficient use of the existing transport fleet. Yet, economic no-brainers tend to be resisted by incumbent interests who are threatened by it.
Everywhere in the world where ridesharing has been tried, a storm of opposition has been aroused by vested interests; not just in the Taxi industry, but in public transport monopolies and government.
As argued by Colin Clark (a distinguished colleague of J M Keynes), in possibly his last published work, “Regional and Urban Location” (1982):
Anyone who defends the taxi monopoly, and restrictions on multiple hiring, while at the same time complaining about the use of fuel, is totally incoherent. The abolition of the taxi monopoly would cheapen travel, save fuel, reduce congestion, and would have one further great advantage, to which hardly any attention has been drawn, namely that it would provide employment opportunities for the unskilled…..
All that should be required to operate a ridesharing service is meeting basic performance standards, a valid driver’s licence, and a registered and road worthy car. People should be free to choose their transport options, not have them dictated to by the government for the purposes of protecting the Taxi cartel’s ‘licencing’ monopoly, which gleans an economic rent from purposely-limiting the number granted.
