Creative disruption is constantly dismantling the establishment. Innovation has improved the quality of life for humans since the begging of civilization and will continue to do so.
We’ve seen audiotapes replaced by CDs, which were replaced by mp3s. We’ve watched the internet boom and bust and boom again, making a billionaire out of a 23-year-old college dropout. We can connect with each other today in ways that were unfathomable ten years ago. Smartphones and their applications have made life infinitely more convenient.
Businesses live and die by their ability to adapt to a dynamic marketplace. The only real impediment to the progress of business has been government.
In suburban America, residents all own cars and rarely take cabs. Upon visiting a city like Chicago or San Francisco, a suburbanite is instantly overwhelmed. And then came along Uber.
It sounded ideal: hailing a Towncar (as opposed to packing four people in a Prius) with the click of a button on your phone. Payment is completed through a credit card already on file, and customers can actually rate their drivers. As a customer, you know that Uber is taking a cut, but you’re happy to pay a little extra for a lot more convenience.
Uber exists as a mechanism to streamline processes, making urban transportation more convenient for every party involved. Uber has even used market forces to protect the public (a novel concept!) because consumers know more about a driver because of information available about each driver on the app.
Enter the regulators.
The International Association of Transportation Regulators is considering a series of measures that would effectively shut Uber down. This fall Washington, D.C. officials proposed new regulations that are anti-competitive, to say the least, and that Uber says would “shutdown Uber’s business in the District and limit transportation options” for the consumers. These regulations were put on hold only after D.C. Council was “bombarded” with constituent complaints. The Public Utility Commission of California issued $20,000 and a cease-and-desist order to Uber and two similar companies for operating without a permit (a permit for what, exactly? Efficiency?).
Critics of Uber are ostensibly attempting to “protect the public,” but are actually just safeguarding their own power and the monopolies/oligopolies of urban transportation. As Uber founder Travis Kalanick put it, the regulators are essentially telling consumers shouldn’t be able to get a taxi in under thirty minutes, and any attempt to facilitate quicker car service should be illegal.
Another beef regulators have with Uber, is that the company charged more for rides in the aftermath of Hurricane Sandy as an incentive to keep drivers out on the street. Regulators believe Uber owes New Yorkers an apology for giving New Yorkers a transportation option in the aftermath of a natural disaster. This criticism is especially humorous given that D.C. mayor Vincent Gray allowed taxi cab drivers to levy an emergency rate increase during the storm for the same exact reasons that Uber is being attacked for.
Regulators always convince themselves that they are protecting the public from evil capitalists, but they rarely do. Bureaucrats become more concerned with maintaining their own power, which necessarily means capitulating to entrenched interests, than doing what is in the best interest of the public. This stifles innovation, entrepreneurship and capitalism itself.
The unionized ran taxis services have been operating inefficiently for years, and attempts to streamline urban transportation should not be met with contempt. Uber’s creative disruption is improving life. This notion, that modern regulators are unable impeding progress for future generations, including ours, should both scare and motivate young Americans into taking action.