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Wealth & Poverty Review The Uber Controversy: A Choice Between Voluntary Exchange and Coercion

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Editor’s note: We are pleased to welcome Bill Walton as a Senior Fellow of the Center. An accomplished businessman, Mr. Walton is the chairman of a private equity firm and a film production company, as well as Vice President of the Council for National Policy. Read his bio here.
Human ingenuity is threatening the taxi cartels and governments everywhere are having none of it. The Virginia DMV has followed several localities, such as Las Vegas, Tampa, New York and Albuquerque in suing the tech companies Uber and Lyft to keep them out of the car lift business. Cabbies in London snarled traffic and taxi drivers in Spain have swarmed suspected Uber drivers in protest. Claiming unfair competition, the government-regulated taxi cab services are eager to shut these interlopers down.
Taxi services in most major cities have become like the quintessential government agency–slow, unreliable and costly. Uber and Lyft offer a fresh alternative.
Uber and Lyft provide responsive car services with competitive rates using a simple smartphone app and a fleet of private cars and drivers. Their business model allows private individuals to use their personal cars to pick up passengers and take them wherever they need to go. A passenger simply fills out a request via the app and he/she selects the driver who can meet the requested criteria and an agreed-up on rate. Drivers have to pass a background check, and have a 2008 or newer model 4-door car and insurance. What happens after that is up to both the driver and the passenger, who are in direct control of the transaction. Neither party is beholden to 3rd party dispatch, route maps, complex fee structures or government-mandated cab rates.
This is a wonderful example of voluntary exchange where two people freely and willingly engage in a market transaction and both are better off after the exchange. Sorry Marxists, there’s no exploitation going on here.
Nevertheless, rather than finding a better way to compete against this invasive species of innovation, taxi monopolies want to outlaw the upstarts. And rather than nurturing these new–and clearly popular–enterprises, state and local governments are using their coercive regulatory power to stop them.
No wonder the economy shrank 3% last quarter.
Image: Henning 48, Wikimedia Commons.

Bill Walton

Senior Fellow, Center for Wealth, Poverty, and Morality
Bill Walton is a Senior Fellow of the Center on Wealth, Poverty, and Morality, and Vice President of the Council for National Policy. He is the chairman of Rappahannock Ventures, LLC (private equity) and Rush River Entertainment (feature film production), which he founded in 2010.