Key to Uber’s success lies in ensuring everyone understands the evils of regulation

Nationalpost.com
Sept. 7, 2015
By Marni Soupcoff

When taxi drivers in Ottawa started secretly filming Uber drivers and posting the videos online, they said they were helping gather evidence against lawbreakers. After all, the Uber drivers were ferrying passengers from place to place without a taxi license. In response, Ottawa officials said thanks but no thanks: gathering evidence is the job of police, not vigilante videographers who are aggressively confronting their competition. Ottawa’s mayor even compared the taxi drivers behind the videos to “thugs.”

The taxi drivers were not able to become the law-enforcement heroes they’d hoped, but they did accomplish one thing. Any public sympathy that remained for the taxi monopoly that Uber has so powerfully challenged was greatly diminished.

The irony is that the very inflexibility and passenger-unfriendly nature of Ottawa’s taxi cartel has come back to bite one of the vigilante-videographers. Ottawa taxi driver Roy Noja, who said he came up with the idea of filming Uber drivers, has now been kicked off his union’s executive.

According to the CBC, Unifor has accused Noja of having “undermined” an ongoing labour dispute after Noja worked out of the Ottawa airport taxi stand, where other drivers had been locked out by their dispatcher. Sadly, no union reps were on hand to secretly create a YouTube video of Noja’s violation of the union constitution.

This irony becomes richer when you consider Noja’s reply. The union should support the airport drivers for a week, he suggested, but after that it’s playing favourites. “They should be doing a fair game for everybody and open the airport to everybody,” Noja told CBC. “I think it’s not fair for the union to do that and leave the other drivers behind.”

Any public sympathy that remained for the taxi monopoly that Uber has so powerfully challenged was greatly diminished.

When I talk about why ridesharing services deserve a chance, I make the same argument. In fact, many taxi drivers I’ve ridden with have made it themselves.

Never has a driver praised the onerous costs and requirements he faces thanks to the municipal licensing scheme. Never has a driver told me: I’m so glad I have to rent a limited plate from another guy who inherited it from his uncle. It’s not that drivers truly like the status quo; it’s just that if they’re going to be made to jump through unreasonable and expensive hoops, they want to make sure everybody else has to jump through those hoops too. As far as I can tell, the better option is to jettison those hoops altogether.

So driver Roy Noja gets the argument for allowing ridesharing services like Uber even if he doesn’t know it. The openness and fair playing field that he’s calling for is exactly what would be left behind if municipal governments stopped protecting local taxi monopolies with strict licence caps and related regulations. When a large taxi company currently enjoying a massive share of the market opposes ride sharing, it’s easy to see why. The company stands to lose profits that have previously come easily in the absence of competition. If the market is opened up, the government-conferred advantage those companies have enjoyed disappears. The little guy driver with a work ethic and Ford Escort can compete.

When a taxi driver opposes ride sharing, it’s less clear that the fear is rational. The status quo for most drivers involves long hours working for someone else, major regulation-generated expenses, and the difference between a profitable and unprofitable day depending on the whim of cranky dispatchers. “If I have to go through that: why shouldn’t others suffer similarly?” seems to be the current driver mantra.

As the ridesharing movement continues to gain steam, drivers may start to realize that the better plan is to end the suffering. By bringing convenient, up-to-date, economical service to an industry that had long since forgotten the meaning of every one of those adjectives, Uber has suddenly made ending taxi monopolies and protectionist requirements a real political possibility.

Now drivers have a chance to control their work destinies. That brings new challenges: having to cater to customers with a pleasant experience and good service, and having to withstand a public customer rating system. But those are the sorts of challenges that make entrepreneurs create stronger businesses and reward hard work and initiative, the very opposite of the effects of the red-tape challenges drivers are dealing with now.

We know that economic liberty will always be resisted by the handful of companies enjoying an oligopoly. The key is making sure that every other person out there understands just how much ending arbitrary government interference would benefit his life.