While Uber may have come up with a fantastic app, their business model of dispatch (i.e. closest car) is hardly novel. Their superior technology allowed them to hit the industry hard when its back was turned. The problem is that the main players in the industry are now, after having been hit hard, looking for solutions in the traditional mode. The problem is that we are well past the traditional means of solving issues in the industry.
The days of having the leaders of the industry sit down and work things out are over. If Uber showed us anything it surely was that new updated ways of thinking are necessary in this day in age and at this stage of the game.
Immediate, massive Uber adoption allowed them to flout the laws/regulations all while gaining PR at an unprecedented pace….and remember….all PR is good PR. .” In a short period of time, enough people started using the regulation-flouting service which made it both impractical and politically unpopular to crack down upon. Ask NYC Mayor Deblasio who he supported when he was the Public Advocate. When it came time to stand up to Uber, our Mayor backed off.
When confronted with legal obstacles, such as tickets for operating illegally at Newark Airport, Uber utilized its massive checkbook to circumvent any problems by paying the fines incurred by its drivers and fighting their court cases. In the meantime, the company lobbies politicians, and of course, their massive pockets go a long way to obtaining time with leading politicians who are all tool happy to take their money to help in their re-election campaign……and in the meantime, most of the public are oblivious as to what Uber is doing….doing to its drivers, doing to the industry, doing to their own safety….but in the end, then win over unwitting consumer. In every instance thus far the NYC Taxi and Limousine Commission relented and brought Uber’s practices within the four corners of the law.
In nearly every city it’s entered, Uber’s strategy has succeeded with far-reaching consequences. By muscling into urban center after urban center, Uber hasn’t just changed how people work and get around. It’s transformed what it means to be a consumer..
Uber’s strategy is called “permissionless innovation”. It is the idea that we should make just about everything legal and let the individualized choices of consumers dictate the shape of society…..and when people get hurt, lawyers, laws and lawsuits can try to retroactively sort things out. I believe that experimentation and innovation with new technologies should generally be encouraged, but not without any limitation. Before Uber came along, the for-hire vehicle industry in NYC was vibrant. Yes, the yellow taxis needed to become more responsive to the needs of consumers and the car services needed a bit of a kick in the butt to get them to innovate a bit, but at least they played by the rules. Unless a compelling case can be made that a new invention will not bring serious harm to society, innovation should not be allowed to continue unabated and just wait to address the problems when they occur at a later point in time.
Generally, permissionless innovation means a start-up is allowed to break the law so they can give consumers what they want. Regulation sure shackles entrepreneurialism, but regulation is mostly in place for a reason. It is the job of the government to look after the health, safety and welfare of its citizens…and hopefully to regulate in a fair manner. It is not laws that corrupt people, such as politicians. It is money that corrupts people. Money corrupts politicians, eventually corrupts the process and in the end causes more harm than good.
What is Uber today if not the biggest lawbreaker in the world. Uber’s lawbreaking is unprecedented in the transportation industry. Uber’s open defiance of municipal law sets it apart from others Permissionless innovation is just another way of saying “it’s easier to ask forgiveness than permission”…and for every rule that Uber breaks, the NYC TLC seems all too happy to forgive Uber. Permissionless innovation suggests that the correct order for dramatic technological changes should be first harm, then fix. Perhaps the resolution is to totally deregulate and let the consumer make their choice.
Uber pitted regulators in NYC between the existing regulatory system and the desire of thousands of consumers to utilize a new service. Some permissionless innovation proponents equate consumer choice with democracy. Every purchase of the services of a Uber driver is akin to a vote for a product, it service and its business model. Yet, what is good for consumers is not always good for the public on the whole. Tensions between workers’ interests and consumers’ interests often collide. Even more than that, workers and consumers enjoy fundamentally different levels of power under capitalism. Most workers cannot choose between competing employers the way a shopper chooses which TV to buy. Millions of workers cannot even find employment. Uber claims to be a creator of jobs, but its recent entry to the creation of the driverless vehicle proves that Uber is not looking to create jobs, but is looking to use drivers to roll out their product to the consumer and when the driverless vehicle comes into being, to drop those drivers like a bad habit.
Uber benefits from and exacerbates the precarious situation between worker and consumer by drawing many of its drivers from the ranks of the unemployed and/or underemployed— and then completing the circle of death by classifying them as independent contractors. But misclassifying its drivers as independent contractors is not what sets Uber apart from the others. What’s different is Uber’s unconcealed contempt for the rules set out by citizens’ elected representatives. Therein lies the danger. You don’t have to regard monopolistic taxi laws as democracy incarnate to recognize the threat Uber poses to basic norms of popular governance.
Permissionless innovation has produced a world where a paying customer justifies any and all business practices, where certain laws— like the minimum wage and overtime pay — is entirely warranted if the market deems them unnecessary. But citizens are not synonymous with consumers. Consumers act according to different imperatives, and in ways that often undermine the rights of workers. And if you confer on them supreme power — sidestepping the ballot box and other forms of democratic control — you create a reactionary new order.
Personally, I am OK with deregulation of the FHV industry and letting he market decide for itself what it wants, but then don’t come crying to me when someone gets hurt or a workers is paid less than the minimum wage…..or for that matter don’t go running to your local politician for help because they usually do more harm than good. Finally, don’t go running to the courts when you feel you have been wronged. In the civil justice system, justice is like beauty, as it is often in the eye of the beholder.
I am all for getting rid of the regulators and letting the FHV industry fight it out amongst themselves. Let the strong survive or let the meek inherit the earth. Regulators serve only one purpose and that is to create more regulations. This does not help the situation, especially in NYC. We don’t need more regulations. We need the ability to compete on the merits without politicians and regulators telling us what to do. The NYC TLC has shown its contempt for competition on the merits. If they had any respect for the rule of law, Uber would have had its license pulled years ago.
In the end, the consumer wants Uber…of simply Uber-like service. So then let the public have what it wants, but there will be consequences and I believe the politicians and regulators in NYC, a liberal state, will simply not allow this to happen. Politics in NYC has largely been corrupt since the beginning of time. Uber has adeptly taken advantage of the loopholes in the law and the regulators have turned a blind eye.
So where does that leave us after my long rant…….Fair competition is the key to a healthy market. The regulators and politicians either cannot allow it or will not help maintain it……since all else has failed thus far, why not let the market be deregulated for a period, let consumers choose and suffer whatever consequences may come their way from their choice of providers/suppliers…… and let innovation reign supreme…..but in the meantime, get the regulators off our backs or at least put on a show and act like they are truly seeking to maintain a fair and open marketplace. Until, we put the brakes on all of this, the consequences of the Uber disruption will be felt for generations to come. If it is good, then our children and our grandchildren will benefit. If it is bad, then we have ourselves to blame for not taking a minute to put the brakes on innovation and growth of the for FHV transportation marketplace. The stakes are very high for all involved, but for the moment very few people are looking at the big picture. Ask yourself the hard questions, look at each point of view, consider what is best not just for yourself, but for society in general…and then you may begin to wonder, is permissionless innovation a good thing that should continue unabated…or should we take a minute to stop and consider the long term ramifications.