Uber: Breaking New York’s Taxi Cartel
Recently Uber, the wildly popular and innovative transportation network app, came under attack in New York. Mayor Bill de Blasio was attempting to push through “Uber Cap” legislation, regulation which would have capped Uber’s growth. In reality, it would have saved the New York taxi cartel, a government created and protected monopoly threatened by Uber’s explosive growth.
Remember, a license for a yellow taxi medallion in New York can cost over 1 million dollars and is almost a guaranteed government protected investment for those who can afford it. Uber on the other hand, destroys this model by providing better service and lower prices. Additionally, it empowers its drivers to make as much or as little income as they desire as owners of their own business.
In evaluating fairness, New York’s taxi drivers are subject to regulation that Uber is not. But, those regulations are asinine and unfair, generally created again to enrich owners at the expense of workers and consumers. If New York really cared about their transportation woes, they should eliminate most if not all of their useless taxi regulations.
But, with history as our guide, that will likely not take place. Taxi companies invested almost a quarter-million dollars in getting de Blasio elected and it was not because they cherished the value of citizenship. Uber represents the end of traditional taxi regulations and organizations, archaic structures of a forgotten, and coincidentally corrupt, past.
When Uber and Lyft are truly free, who would choose a more expensive and less comfortable yellow cab experience? In the end, the taxi cartel is fighting for their lives, the battle becoming their Napoleon defeat at Waterloo. When it is over, if Uber and Lyft are allowed to innovate, the medallions and government bestowed licenses will be worth nothing.
We should be Uber-grateful that innovators decided New York was a good place to flex their muscles and fight. Whether it was publishing letters, engaging celebrities like Kate Upton and Neil Patrick Harris, promoting viral videos, or having Uber drivers protest on the street, it was all out war for innovation.
New York has been here before. In 1808, the legislature of New York granted Robert R. Livingston and Robert Fulton a monopoly to provide transportation on all waters within the state. It was plucky entrepreneurial upstarts like Cornelius Vanderbilt who aggressively fought these monopolies defiantly against the law. Ultimately, the battle lead to the Supreme Court where a unanimous decision found that New York’s navigational licensing scheme was unconstitutional, breaking Livingstone’s and Fulton’s monopoly.
The breaking of these established aristocracies in New York lead to America’s explosive growth, not only for the steamboat industry but the railroad industry as well. This entrepreneurial monopoly-free driven economy has defined America to this day.
When we innovate, we always battle entrenched interests. It is also always about money, cloaked in public safety and jobs. Whether it is Edison against the natural gas industry or more recently on a micro level, the licensure of African Hair Braiding, the fight is the same.
Uber’s recent victory over de Blasio was a benefit for all New Yorkers, which will lead to less expensive transportation, more choice, and entrepreneurial opportunities for thousands. Uber and Lyft are trailblazing a new economy, just as railroads and steamboats did before, where people are empowered and not just the politically connected few.
We should all be grateful that Uber has decided to give Mayor Bill de Blasio a black eye on the matter. He had it coming.