Oh, the marvels of the modern world. Information, entertainment and commerce are always at our fingertips. We are a mere click of the mouse or tap of the tablet from anything our hearts desire. This brave new world of constant communication has stimulated innovation in every nook and cranny of the economy, making goods and services better, cheaper and faster both online and IRL. Most astonishingly of all, this digital revolution has not sprung from any central plan, but rather has arisen from capitalism’s symphony of competition and cooperation among millions of individual actors worldwide.
But where markets work, a government bureaucrat cries. Take Uber, for example. For four years, this mobile application has been connecting city dwellers on the go with cab and luxury car services to quickly pick them up at their location at the flick of an iPhone. No longer are tech-savvy passengers bothered by hailing a cab or arguing over a fare. Uber is uber convenient, making millions wonder why they would ever take a taxi again.
Enter the taxicab lobby. While Uber’s new competition is great for consumers, the cab industry has foreseen creative destruction in its eminent future unless it does something about the new kid on the block. So, instead of getting creative, it’s gotten destructive. Cab coalitions have successfully lobbied city governments to impose restrictive regulations that effectively put Uber out of business in their city. Thanks to Big Taxi’s crony connections, Uber’s operations are under threat in Chicago, Los Angeles, New York City and Washington, D.C., among other major cities both here and abroad.
Sadly, Uber’s situation is not unique but, rather, is becoming all too common for online entrepreneurs nowadays. As further proof, consider the Marketplace Fairness Act. The Senate passed this suspiciously innocuous-sounding bill in May that would slap consumers’ state and local sales taxes on every online purchase they make, a scheme favored by brick-and-mortar businesses to reduce online competition. Under the proposed law, a small business in Texas that receives an order from New York City will have to pony up 8.875 percent of the purchase to Mayor Bloomberg – even if its owner has never set foot in the Big Apple. Only can a bureaucrat’s twisted logic call this “marketplace fairness.”
In a sense, Uber’s troubles are not just the growing pains of a typical startup, but rather are indicative of a growing regulatory threat in the tech sector. As the Internet makes goods and services from around the world increasingly on demand, established businesses resistant to change and competition could increasingly embrace cronyism.
While government favoritism is outrageous at any level, it could be devastating on the Internet since technology has been such a major driver of prosperity in recent decades. Just imagine how economically destructive it would have been if the government outlawed Steve Jobs’ Apple computer in the 1980s because its word processor threatened the jobs of secretaries who use typewriters. Technology has improved the health and wealth of millions around the world. So while Uber’s current situation may seem like the trivial regulatory troubles at first glance, it actually represents a serious threat to the future of human innovation being brought by the mobile app industry.
Fortunately, consumers have started to fight back. Rider outcry saved Uber from regulators’ wrath in Washington before and just might do the same again soon in Los Angeles after the city recently sent the startup a cease-and-desist letter for not possessing a taxicab license in the City of Angels – despite the fact that Uber employees don’t actually drive the cars. Users should stand up against these government roadblocks on the information superhighway before they completely obstruct online entrepreneurs like Uber from continuing to improve our lives and revolutionizing our economy.
Casey Given is a policy analyst in the Washington, D.C. area. Follow him on Twitter @caseyjgiven