Uber and taxi regulations are often pro-business, and that’s the problem
This is the scorecard of major U.S. cities, and their regulatory frameworks regarding taxi cabs and ridesharing programs. R Street, the free-market-favoring nonprofit in D.C., has conducted a study of the laws that allow for, ban, regulate, protect and cartelize cabs as well their competitors like Uber, Lyft and Sidecar.
This is a crucial topic because it gets at some of the most important issues regarding economic liberty, special-interest politics and political economy.
For instance, one of the most poignant periods in American economic history is the Progressive Period, when the concerns were monopolies and cartels. R Street’s study on cabs and Uber reminds us that today cartels and monopolies tend to be not the enemies of the state, but the creations of the state. Most of the cities R Street studied require taxi medallions or they restrict the number of taxis that can operate.
The study also shines a light on the difference between being “pro-business” and “pro-market.” New York Times blogger Josh Barro points out that many of the worst cities in R Street’s study are Republican-run. Barro explains the dynamic…
…R Street writes: “Another interesting wrinkle comes from New York City, where the city took a novel approach to TNCs that forces even casual ride-sharing drivers to submit to commercial licensure and insurance.” This is an annoyance to full-time limo drivers. It’s a true barrier to entry to the guy who wants to make some extra money after his day job.
On city-enforced taxi cartels, R Street writes “economists generally agree that medallions tend to increase rents to owners, not drivers.”