Uber proves we don’t have a free market economy 2

File illustration picture showing the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign in Frankfurt, September 15, 2014. A Frankfurt court earlier this month instituted a temporary injunction against Uber from offering car-sharing services across Germany. San Francisco-based Uber, which allows users to summon taxi-like services on their smartphones, offers two main services, Uber, its classic low-cost, limousine pick-up service, and Uberpop, a newer ride-sharing service, which connects private drivers to passengers - an established practice in Germany that nonetheless operates in a legal grey area of rules governing commercial transportation. REUTERS/Kai Pfaffenbach/Files (GERMANY - Tags: BUSINESS EMPLOYMENT CRIME LAW TRANSPORT)

e logo of car-sharing service app Uber

Uber the ride-sharing alternative to traditional taxi services, highlights one of the big myths of modern capitalism, that  one of the central tenants of a functioning capitalistic system is that of a strong  Free market economy. I feel we don’t have a true free market or worse have a corruptible free market, where those with money and political influence can bend the laws to suit and protect their business interests.

The free market needs to exist  to be available so that goods and services can efficiently and fairly be transacted. Its not a totally free, naturally some government involvement is needed, but As Adam Smith puts it “is free from all forms of economic privilege , monopolies or artificial scarcities”. This is a core principle because it means that if you come up with a better idea, product or service, you can stand to gain from it, and society in general will likely be better served.

This is exactly what Uber is, it’s  a better mousetrap for transportation. And its a win-win proposal for just about everyone. Drivers win because they get a decent fare for their work, they choose their own hours, and are their own bosses, Riders get the convenience and friction free experience of getting a ride to their destination.

Sadly the entrenched players that is the owners of the taxi and livery companies all over the world, can’t stand this concept of the free market since it threatens their traditional business model, and thanks to their political influence are working to squelch out the free market for ride-sharing.  Countless examples world-wide of city protests by taxi companies can be found everywhere. Here are just a few.

But why should society be held hostage by entrenched businesses that have not evolved, have not had the consumer interests at heart, and simply want to milk the most money from their customers and drivers for eternity….

The Sleezy cab industry world wide

First off I want to note this isn’t section isn’t a rant against the hard-working front-line cabbies and other livery drivers , they provide a valuable service, its against the owners of these cab companies and their political surrogates, that are stifling innovation and lining their own pockets at the expense of others.

The owners who generally rent out their cabs to the drivers (typically in big cities where you need a medallion to legally drive there) are not in the business of customer service they are in the money making business.  So they have no vested interest in lowering costs or making their service better or more efficient, don’t believe it hail a cab in any big city, they do the same thing with an Uber, tell me which experience is more pleasant and more affordable?

Many of these protests movements world wide or organized and encouraged by the owners and their surrogates to maintain their near monopoly business model.

Its called progress.. get over it…

Companies like Uber, AirBNB, Amazon, etc. are classic disintermediation companies, that is they cut-out the traditional middle-man . But the fact is  when you look at these sharing-economy companies they generally do a pretty good job of saving money and providing a valuable service, otherwise they simply wouldn’t garner the exposure and popularity they have.

Because it exposes  how seedy and fake our free-market really is. Now this should not come as no surprise to any business person that has tried to setup a new business that encroached on someones existing business model. But here we see in plain site and aggressive business model preservation , even when its clear that everyone prefers the alternative sharing-economy model.

 

We need to stand up for the free market

In western democracies, where theoretically your vote and opinion matters we need to stand up to these interests and make society better for everyone and if our politicians are going to espouse free markets and entrepreneurial spirit we need to make sure that the artificial barriers of entrenched business interests do not stand in their way.  If America is the beacon of capitalism it needs to lead by example .

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2 thoughts on “Uber proves we don’t have a free market economy

  1. Reply pwillard Dec 27,2016 1:42 pm

    You know… there is little or no protection activity seen in the USA when its about eliminating the cost of employees by replacing them with robots or foreign workers but boy… start to change the paradigm that the business was based on and suddenly there’s trouble. They would like you to think that the medallion-ed cabbies are fighting UBER/LYFT to survive… but if livery companies could suddenly have driver-less cars, they would be gone in an instant.

    • Reply Tony B. Jan 19,2017 1:44 pm

      That’s great observation, I think the issue of self-driving cars will play a much larger part in the coming years, then the pesky medallion owners who are still hanging on to last centuries monopoly model, of course it doesn’t prevent the powerful and influential from creating rules and laws that favor their own “approved” driver-less tech..

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