Uber vs. The Taxi Industry

Uber. Lyft. Yellow Cab. Which one of these is not like the others?

Evidently, the taxi industry is reeling from the first two. Taxi drivers pay ridiculous sums of money to be a legal taxi service. This article tells the story of one immigrant taxi driver who has had to fork over hundreds of thousands of dollars to get in, then thousands of dollars each year just to keep the privilege of carting around harried business people, oblivious vacationers, and drunk bar patrons. Meanwhile, services like Uber and Lyft– started by rich white dudes who could figure out ways to get around all those regulations– get accolades and $18B valuations. The rich get richer, etc.

On the face of it, it seems like if you play by the rules, you get screwed. But if you screw the rules you get rich. Users order an Uber or a Lyft online rather than calling for a cab or attempting to flag one down in the street.

I agree– it sucks to for the cab drivers weighed down buy excessive regulation. That is sad.

But it’s all regulation they asked for in order to increase the barrier to entry/decrease competition/make more money– artificially control the supply and increase revenue. Now, that established industry finally has some decent competition. And isn’t that how a market economy is supposed to work?

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