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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day While it is perfectly reasonable to expect companies to obey the law in the countries in which they operate, the rage against Uber highlights how stifling regulation of economic life can be. Prior to the emergence of Uber, complaints of never being able to get a cab during peak times were common in every major city in the world. Uber’s sidestepping of licensing laws and other regulations that limit enterprise has enabled it to increase supply and meet demand.
What’s more, Uber’s cheaper fares have saved customers money, expanded our transport options and provided a source of income for a whole new sector of drivers. While the debate about Uber drivers’ pay and employment rights rumbles on, it is clear that banning the service, and forcing these drivers to go through the same costly licensing systems as everyone else, does no one any favours.
It is the competition that Uber provides that is driving its popularity with drivers and customers. But this is precisely what is enraging licensed taxi drivers.
– Rob Harries
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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I had occasion to use Uber for the first time last week. I’ll never use a regular cab again if I don’t have to.
Uber is disruptive of crony capitalism.
The internet is disruptive.
Funny how the left now wants both them shut down or regulated.
The cab companies do have a legitimate beef, though. If I’ve jumped through a bunch of regulatory hoops, paid all sorts of fees and taxes, and adhered to strict regulations regarding how I can treat my employees, it’s not going to seem very fair to me when Uber comes along and says “Nah, we’re just not going to bother with any of that”.
Re: Eric.
I might have some sympathy for the black cab drivers if their fares weren’t so grotesquely inflated. As things stand, sod em.
Well they want their business model protected at other people’s expense. I do not think it is fair to me that the state has made me pay so much for so long for taxi services.
Oh, I agree. But the fix is to strike taxi regulations from the books, not to heavily regulate traditional cab companies and ignore Uber.
Of course, if you’re a government type the obvious solution is to drive Uber out of business.
If you have a job where you have a substantial and long standing barrier to entry erected by the government – which you had to climb over – you’re bound to be pissed off if someone comes along and evades the barrier to entry. Normal attitude of guild members to the free market.
Imagine a politician standing up in a political meeting, promising to abolish planning controls in the home counties, to allow a free market in housing. He wouldn’t get out of the building alive.
I completely understand the cab owners’ (note that they’re not necessarily, or even usually, the actual drivers) objection to Uber. (The drivers themselves should simply sign up with Uber or Lyft.) In New York, and probably in all other major cities, they had to pay very large sums for the “medallions” (the ticket for entry to the guild). They have a vested financial interest in maintaining the status quo. But that doesn’t make me want to continue paying more for inferior service just to protect their monopoly, or their investment. They need to figure out how to compete, in terms of both price and service, with the upstarts and their new business model. And the cities (read: politicians) need to figure out, and quickly, what to do with the old regulatory model, which is being superseded by technology before our (and their) eyes.
What they should do is phase out the taxi monopoly entirely, and give pro-rated refunds to the medallion owners. What they will do is probably something quite different, and wholly unrelated to actually serving their constituents.
Singapore took a different approach, with the government investing in a rival app called GrabTaxi and the local taxi companies all fitting themselves out with this Uber-like service. Uber hasn’t really taken off here and the local taxi drivers love the added convenience of choosing fare destinations.
That’s all well and good, Chip, but why should the government be the one to own to app? If the taxis are now all fitted out with that device why don’t they all just sign up with Uber or Lyft? What does the government add to the equation (other than rent-seeking)?
The cab companies do have a legitimate beef, though.
Then the cab companies should be the ones leading the charge to ditch those government regulations. If they are doing anything except that, then I consider them part of the problem, not the solution. If you’re part of the problem then I have no sympathy for your failures.
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Why should the government be the one to own the app? [GrabTaxi]
“Clearly You’ve never been to Singapore mate.” -Captain Jack Sparrow
No, they don’t. In the vast majority of markets where Uber thrives, it’s able to thrive because taxi plate owners or taxi companies have colluded with the state to set up a protected industry which restricts competition and makes consumers pay an artificially inflated price for taxi services. I don’t feel the slightest bit sorry for these parasites when they complain that their investment in the taxi cartel is looking shaky because an alternative has developed which circumvents their closely-guarded market barriers and threatens to bring down the cartel.
Would you pity the lost investment of a neighbourhood hard man who purchased permission to “protect” a city block of homes and businesses, only to find his shakedown racket broken shortly after by law enforcement? I view the parasitic cartel owners similarly. Their operations are responsible for countless predations on their captive market. These operations shake down a cab passenger every time they hail a taxi. And every time someone who would have taken a cab charging market-governed fares decides not to on account of the artificially high fare they will be charged, a new victim emerges.
Good post and good comments.
Lower barrier to entry also means lower wages. It can also have bad effects in other areas. For example, I’m told Las Vegas is considering putting regulations on Uber because congestion pricing while quite useful in say London when you don’t want the Hoi Polloi in the city its not at all good for the casinos on a busy weekend.
Also to what Lee Moore said, guilds were historically and still are generally a good thing in that they increased quality (well most of the time) and increased wages as well.
The goal should be to prevent wage arbitrage not encourage it.
Since automation reduces work we have to regulate to compensate and this can mean erecting barriers to entry, minimum wages, maximum hours worked (game theory here, forcing everyone to take vacation means everyone can take vacation and no one can game the system) lots of things.
Otherwise failure in this direction will either end up in a demand collapse (we are seeing the edges of that now) with massive deflation and social disorder (or even dissolution) or a regulatory and distributive state far larger than we have now.
The growth in government is the cause of inflation but it isn’t the cause of lower wages but a product of it.
Oh and a last thing, don’t think you can opt out or rig a political system to protect you. The mob is global now and anywhere you go, someone wants blood.
No, they were a very bad thing indeed when they had the means to forcibly exclude people from competing with them. They are an attempt to control and force up prices by limiting supply for the benefit of existing suppliers, stifling disruptive innovations.
Why?
No and who is ‘we’? Automation changes rather than reduces work.
But that is exactly what guilds and regulation mean: rigging a political system to protect the interests of certain people.
Mobs are like tides. You can always build walls to keep them out.
Well, the government doesn’t own the app. My point was that unlike other governments that tried to stand in the way, the Singapore government saw an opportunity to invest.
It highlights the pragmatic, results-oriented governance in Singapore as opposed to the cronyism and ideology-driven stance of too many western governments today.
A.B. Prosper,
You do realise that if your analysis were correct, the automation of farming and cottage and extractive industries since the eighteenth centuries would mean we were all relatively poorer than we were then. I may have missed something, but all the evidence I’ve seen suggests this is not the case. So maybe your (luddite, to keep a theme going) assumption about the effects of automation needs questioning? Unlike Perry I am happy to believe automation reduces work (because I am saying this to you without the benefit of a secretary and a lot of postmen…), but you are showing a classic socialist-type error in believing work to be a desirable end in itself. Increased leisure time (which does seem to correlate to automation) is a desirable end – work is a necessity.
I think you are confused about the nature of the mob as well. The mob is an unthinking reaction, not a long-term presence. The mob is generally an attempt to renegotiate society through a display of power when no other method is available – so generally a last resort. It is not in itself a phenomenon, but a reaction (generally manipulated by those with particular interests).
The purpose of production is consumption. Or, if the customer is getting what they want, fuck the producers/providers.
Unless technology made the former secretary and postmen unable to ever find a different kind of job, then no, automation does not reduce work, it just means some kind of work goes away and other kinds are enabled.
Are cab drivers in London still required to have ‘the knowledge’? If they are, that is what you are paying for when you use a taxi in the smoke. Out here in the sticks most taxi drivers, when they can speak sufficient English to have a conversation with, demand you tell them where to go as they have no clue at all where places are. If you only have an address and aren’t local, you are pretty much buggered.
When say a taxi business undercuts a rival and takes less money for the same service, then we can applaud. If a government thinks, because it isa quiet Tuesday afternoon and they really must do something to show they are ‘on the ball’ and choose to ‘step in’ and issue instructions, then we have the right to jeer. Thus I have no idea if Uber is good or bad, but like most end users, I may well ask what is it I am paying for?
You’re either totally wrong, or the Las Vegas authorities are incredibly misinformed regarding the function of the congestion pricing that Uber maintains. I can fathom no way that transient fare increases caused by demand spikes could be “not at all good for the casinos on a busy weekend”. Perhaps you’d like to explain how Uber’s surge pricing could conceivably have even a minor detrimental impact on the casino trade in Las Vegas.
Why don’t you go and find out? UberX is cheap compared to a regular taxi (on weekends, taking an UberX car is about half the price of a taxi fare in my city), and the overwhelming chance is that you’ll have a better experience in an UberX car than you would an average taxi.
Perry,
Fair enough – but the secretary and postmen are either now working less in their new roles, or are relatively more productive, thus enabling others to work less (hence our ability to sustain an increasingly elderly population). I suspect we are viewing the same question in different frames rather than truly disagreeing.
Almost certainly the case 😀
A.B.Prosper.
Everything you have said is mistaken including-
“Lower barrier to entry also means lower wages.” The opposite is true as is –
“It can also have bad effects in other areas…” but I see others have already answered – Samizdata is the home of a number of economically educated individuals so it might be worth your while reading George Reisman’s “Capitalism” [the sixty pages from 605-665 cover this topic, and how J.S.Mill undermined capitalism.]
I expect the propaganda campaigns against UBER will intensify because UBER is such an obvious refutation of the whole principle of state regulation – a Panorama expose of an unregulated criminal employed by UBER is probably already in the making – you can bet there will be no mention of John Worboys and Christpher Halliwell!
The blessings of regulated transport:
– TIME magazine 1976.
Good point, JohnW. If “lower barrier to entry also means lower wages”, and that this a bad thing individually and in the aggregate, then it follows that we should infinitely increase the barrier to entry in all sectors across the entire economy.
Bloody hell. Is that the shitball you wish to push up this vertical incline, A.B. *ahem* Prosper?
Yaron Brook talk show on Why UBER matters.
And now, in 2015, most of the cabbies in New York City are Muslims, or some equally illiterate and arrogant creatures from the Third or Fourth Worlds. If you’re lucky, the driver won’t stop midway to your destination to hop out, throw a rug on his hood, and say his prayers, aiming his lifted arse in your direction. If you’re a good-looking chick, his eyes will always be staring up your skirt through his rear-view mirror, or drooling over your décolletage, thus increasing the chances of a collision with another vehicle by 90% because his eyes were not on the road. If you have a service dog, he will just stop short of taking a machete to it and cursing you out for not knowing how Muslims hate the animals. If he hears the clank of bottles in your grocery bag, he will say that alcohol isn’t allowed in his cab, even though it’s likely he knocks back consecutive giant shot glasses of the hard stuff in private.
If you smoke, he won’t allow that, either, even though he would likely smell like a burning tobacco field (which thankfully might disguise, just barely, his natural body odor; if not, then the whole cab will reek of something akin to fettuccine that’s sat in the sun for a week, or a mound of wet mulch). If you’re black, and he’s a swarthy olive-skinned superior Muslim being, he won’t go where you want to go. He will take several minutes to make change from your proffered $20 bill, because a knowledge of arithmetic apparently an arcane language to him, it wasn’t a required hiring skill, so it’s a risk to challenge what he slips back into the little change box, because he will probably intensely glare at you as though he were declaring a fatwa on you and your children.
After I posted this addendum to the Time Magazine squib elsewhere, I received unanimous confirmations from correspondents that my and Time’s descriptions conform to their own experiences.
JohnW, a wonderful extract. Thanks for finding (and posting) it.
Just about everything A.B. Prosper said was wrong, but enough people here have already taken him to task over it that I’ll resist the urge to pile on. However, I will add that with respect to Las Vegas’ objection to Uber’s “congestion pricing” (assuming his assertion is correct), even with the congestion premium Uber’s prices are still lower than normal taxi fares. The casinos should be celebrating it, not demanding more government controls. (Frankly, I doubt that the casinos are really behind this; it smells like a typical politician’s excuse for another power grab.) I doubt even Las Vegas politicians are really that stupid (although this is Nevada, the state which repeatedly sent Harry Reid to Washington and almost elected his son Governor, so you should never underestimate the stupidity of that electorate).
Apologies to A.B. Prosper for my intemperate comment.
The cab companies do have a legitimate beef, though.
I understand this statement a bit though: The law needs to be uniformly applied if it is going to be applied. From what I understand, Uber isn’t using some newfound technological power to disrupt things – it is disrupting things by ignoring the regulations everyone else was burdened with.
You don’t want whether or not your business can start or become successful or compete to be determined by how cool everyone thinks you are. If the cool kids can do whatever, where someone without startup cachet and media glamour is going to get stepped on by the government for trying to do the same thing, that isn’t a free market, or a nation ruled by objective laws.
Completely agree that the solution is to get rid of the monopoly, and shred the regulations though.
Lee, I think you have succinctly summarized one of the biggest problems a libertarian movement faces; that of people wanting to ensure that others suffer just as they have themselves.
Everybody else being the taxi industry, which was instrumental in lobbying for the regulatory framework to be put in place in the first instance. I think it’s a bit rich to pity the burden the taxi industry must shoulder when it is they who demanded the burden be placed on them. They were perfectly happy with the regulations that allowed them to gouge consumers and keep out competitors whilst these regulations were effective. Enter Uber, and suddenly they start screeching about how they want a “level playing field”. Er, no. The taxi cartels have gamed the system in their favour for well over half a century, and created a very unlevel playing field for anyone wishing to compete with them. The only “level playing field” they’re going to get now that Uber is on the scene will come about through a dismantling of the taxi cartels.
Or your driver can dispense with ‘the knowledge’ and embrace a GPS unit. Its navigating ability might not be on a par with a London Black Cab driver’s, but if you’re in an UberX car being directed by a GPS unit, the ride is going to cost you a fraction of what you’d pay in a Black Cab. Up to the passenger to decide if ‘the knowledge’ is worth the extra folding.
JohnW, what a gem! Thanks. 🙂
Edward Cline.
Can’t help but feel you may have a problem there, or possibly just very bad luck with your cabs. Gooing with problem myself though – looks like it might be a genuine case of irrational hatred of others to me.
You may be surprised to know that just because we don’t support big government, we don’t all support your ethnographic categorisation of muslim = bad. We might dislike what a lot of muslims believe, but in my case at least I equally hate those who appear so bigoted, regardless if their physical appearance might approximate to mine. The difference between and A.B. Prosper is simply the way you categorise people – neither of you support freedom of the individual, because your views require people to conform to schemas.
Watchman – why is the explicit bigotry that forms the essential core of the Muslim ideology an acceptable position to you?
Watchman,
Newsflash: people do conform to schemas. Not perfectly, but generally and overwhelmingly people conform to schemas.
Also just FYI: tolerance of intolerance is the plank walked to defeat.