June 26 2014

Street Fight: Cabs Protest Uber and Lyft

Patrice J. Lee

Washington, D.C. was filled with honking and noise yesterday as taxicab drivers protested the new competition they face from ride-sharing platforms Uber and Lyft. However, their plan to snarl traffic backfired.

Hundreds, perhaps thousands of angry taxicab drivers clogged major roadways in a caravan into downtown D.C. in protest against ride-sharing services. Ironically, their stunt likely drove more Washingtonians right into the arms of Uber and Lyft and based on a flurry of tweets, the cabs lost some sympathy with riders, workers, and residents who were unable to get to work, to job interviews, to important meetings, and around the city.

While this occurred in Washington, D.C., this fight is brewing in cities and states across the country. Innovative businesses using technology to bring their services to the market are rubbing up against the industries, unions, and industry associations which have spent big bucks lobbying policymakers to secure their monopolies and special treatments from government –what we call cronyism. Policymakers also don’t want to pass up any opportunity to extract more revenue from these services.

The Washington Post reports:

Drivers in and around downtown D.C. were gridlocked in traffic Wednesday as a caravan of angry taxi drivers made its way  from East Potomac Park to Freedom Plaza — in a protest against app-based ride sharing services such as UberX.

The drivers are members of the Teamster-affiliated D.C. Taxi Operators Association and the target of their protest is digital dispatched ride-sharing services such as Lyft, UberX and Sidecar, where regular people give rides to others using their private vehicles. The cab drivers have been at odds with the new services saying they have an unfair advantage over regular cabs since they don’t have to follow the same rules and pay the same fees.

Organizers said they planned to deliver a letter and petition to city officials asking them to impose a “cease and desist” order on the services.

…The app-based ride-sharing services have received a warmer reception from the D.C. Council where a bill currently under consideration  would allow such services to operate in the District as long as they meet certain insurance requirements and follow safety rules.

We’ve reported before on Uber and Lyft, which is just one slice of the new sharing economy. Considered disruptive technology, these companies setup online applications (apps) for regular people with goods and services to find those who want those goods and services. It’s just an online marketplace.

For example, I can tap my phone and find a driver nearby to pick me up and take me wherever I want to go. The transaction is processed online and I never even have to pull out my wallet. Similarly, if a person has a room or place to rent, she can advertise it on a website like Airbnb for travelers looking for a less expensive sleeping option for any negotiated duration. As you can imagine, the hotel industry is none too pleased either.

Services like Uber and Lyft are often less expensive and service areas that are underserved. Disruptive technology is great for people, especially young people in urban areas who can’t afford the goods, want to help the environment or just want to connect with other people.

Traditional businesses are upset by the new competition and they’re asking (now demanding) that government step in. However, free markets fundamentally allow for new competition to offer consumers new choices. Those already in the market can choose to innovate or become obsolete. The Sony Walkman was the leader in portable music until a “little” company called Apple introduced us to an iPod. The music industry has never been the same but no one misses their walkman.

Government’s role here should be to encourage innovation not to pick winners and losers. Let consumers decide which is the best option for them.

 

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