This article caught my eye because it began with the case of Tesla Motors being attacked by state governments. The topic, however, is not automobile companies using government to hurt Tesla in the marketplace. Rather, it is another kind of anti-business crusade being launched by local governments to ruin new businesses in order to protect an older business.
Now the same principle is being applied to stymie the emergence of another set of companies in the transportation sector — cloud-driven ride-sharing services. Ridesharing – also known as carpooling – involves members of the public contacting each other via a smartphone or PC internet networking service and arranging to ferry each other to various destinations for fees. The practice in informal form is almost as old as the automobile itself, but in the digital age app-enabled ridesharing has seen an explosion in interest, threatening the commercial taxicab industry and the city officials who depend on that industry for revenue.
In some places, arranging to give people rides in exchange for fees provokes some dire retaliation.
In 2013 the Philadelphia Parking Authority (PPA) — a city authority that derives its revenue from taxicab licensing — decided it was time to put a stop to the business, which hadn’t paid its toll. It conducted a sting, seizing cars, ticketing drivers, and shutting down the operation. Marty O’Rourke a PPA spokesman told TechCrunch
[Sidecar drivers are] passing themselves off as taxis and they’re not. It’s clearly not about technology. This is about public safety. [The sting] was an operation to impound vehicles because they were operating illegally. If we find them out there again, we’ll impound them again.
Sidecar vigorously disagreed. It points out that its drivers don’t claim to be taxi drivers and are simply engaging in the time honored practice of carpooling with a small fee for the time and gas.
So there you have it. Carpool and you get your car taken away.
The article surveys many other cities. Everywhere, it seems, city governments are attacking people who arrange rides. Supervisor John Avalos of San Francisco is typical. He is quoted as saying, “We’ve gotten to almost a crisis mode. We cannot let [the taxicab] industry fail.”
Why? Why are taxicab drivers more important than other people? Why should other people be punished just to prop them up?
The answer of course is that city governments grant taxicabs a monopoly or cartel through the licensing system. The city government and the taxicab companies both make a lot of money through this corruption.
In the meantime, we are all stuck with overpriced, second-rate service.