In a previous article, I wrote about mankind’s greatest invention: The Free Market System. History has proven that there is no other system heretofore created that has generated so much wealth and prosperity for the average person. Plus, no other system has allowed so many of the poor to step up into a newly generated middle class.
A free market has four essential ingredients: 1) Free prices; 2) Profits that are meaningful; 3) Free competition, and; 4) Private property. Whenever one, or more, of those ingredients is artificially regulated or controlled then worse outcomes for the poor and middle class are produced. In our increasingly technocratic societies where bureaucrats and politicians (the Übermensch) believe that an economy is something that needs to be centrally managed and regulated in every way, it is not surprising that full-out war has been declared against the unlicensed ride sharing company Uber.
Uber is a website that connects private individuals with cars with private individuals who don’t have cars and need a ride – and are willing to pay for it. Taxi owners and taxi unions hate Uber because they have enjoyed their “protected” (monopolized) industries for years. By licensing taxis, the Übermensch can claim that they are keeping the public safe. After all, if a taxi driver goes postal on a customer, his license could be revoked. However, if an unlicensed individual harms customers, then the free market would ensure that he isn’t in business for long because he would go broke and/or would be sued and/or criminally charged. Nonetheless, since the Übermensch crave control, considerations of basic economics and human behaviour are often missing from their thought processes.
The taxi owners love the status quo. Firstly, they are guaranteed that competition will be limited because in most cities only a specific quantity of licenses are handed out. For example, the Übermensch have determined through some apparent magic that the city of Ottawa needs precisely 1,188 taxis. No more, no less. (Note that taxi owners love the free market system when selling their licenses to other owners because they can sell them for hundreds of thousands of dollars each. There is no way they would want the Übermensch to regulate those prices!)
Secondly, taxi owners love the fixed prices that the Übermensch set by law because they no longer have to haggle with customers or bother being “competitive” in their pricing. Taxis in Vancouver charge $1.88 per km because that is what the Übermensch say they must charge. No more, no less. A ride with an Uber driver comes in at half the cost (except for their luxury service which is on par with city taxis). Thirdly, profit isn’t an issue for taxi owners because they can simply lobby the bureaucrats to raise prices. Because the Übermensch have no way of knowing what the real costs of operating a taxi are, they often simply comply. A reluctant government is likely to find taxi drivers on strike or blocking their roads until the rates are raised.
Fourthly, in destroying the Free Market System that would normally exist in the taxi industry, the Übermensch have destroyed the innovation, low prices, and high levels of customer service that would normally come to exist. For example, Uber was quick to introduce a smart phone based application that makes it convenient for customers to identify individuals with cars to share. The price is predetermined prior to pick up. Pickup time is clearly identified. Taxi monopolies were horrified by Uber’s innovation and were forced to introduce similar smart phone applications as a sign that they are innovative, too. Uh huh.
One Uber driver in Ottawa drives a Tesla Model S. Who would not prefer to ride in a new Tesla than a typical drab and dreary taxicab with its worn-out interior and government-mandated ballistic plastic shield that obscures views to the outside and makes it feel like one is driving down a road in Fallujah? In fact, one Car & Driver author drove a $500,000 Rolls Royce as an Uber car sharing experiment. Could such innovation ever exist in today’s monopolized taxi industries? Of course, not. Because with fixed prices, fixed profits and fixed competition (and the ability to prevent others from using their private property from helping others), there is no motivation for innovation. Just pay your $1.88 per km, please (if you can get a hold of one of those 1,188 taxis, that is).
One of the big losers, of course, is the poor. The poor often do not have their own vehicle due to the high costs of government-mandated licenses and insurance. (Note that the insurance industries in Canada are highly regulated such that the free market system barely functions in them.) Therefore, the poor can either walk, take a bus, bike or taxi. For many cases, walking and biking is out of the question. Taking a bus can be onerous for those who are unable to walk or stand for long periods of time, or who cannot withstand the cold Canadian weather. A taxi is oftentimes the only way a poor individual can get to where he or she is going. But with high inflation and lowering standards of living, how can someone in poverty afford a taxi at the rate of $1.88 per km? By perverting the Free Market System, the Übermensch guarantee that the poor will continue to suffer in this way.
Another aspect to consider is that, in a free market, Uber would most certainly act as a means for poor individuals who do own vehicles, or have access to them, to earn an enhanced living. Perhaps there is a driver amongst the ranks of the poor who could be one of best Uber drivers out there. With the Übermensch in charge, we will never know.
The Übermensch could not care less, however. In a relatively prosperous nation like Canada, the poor are still a minority and do not carry a lot of votes (though this is changing thanks to the systematic destruction of the Free Market System in many industries). Hence, whether or not a poor individual has to pay $20 for a state-approved taxi ride, or $10 for a non-state-approved ride share is of no consequence to them. Upset taxi owners are more of a threat to the Übermensch than an old or sick man or lady who is unable to afford a trip to a doctor or dentist.
The battle going on between the Übermensch and Uber & the poor is a direct consequence of politicians perverting the law in order to advance their own interests (i.e., projecting the image of “protecting the public”) and those of their corporate friends (i.e., the taxi owners and unions). It is a despicable fight. Do you not agree that it is the Übermensch and the monopolists who should be on the defensive? Perhaps they should be the ones facing fines and imprisonment?