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Anyone who has ever taken an economics class will have heard some variation on the following lesson: Monopolies are bad. They stifle competition, increase prices, reduce production, and generally abuse consumers. Images of greedy, mustachioed robber barons surveying their smoke-spewing factories with glee are called to mind, as we learn of how the good and noble government must step in to break up these evil and corrupt institutions.
Capitalists and customers throughout the country are celebrating a major free market victory as news that progressive NYC Mayor Bill de Blasio has announced that he will not continue to push a city council bill that would have placed a cap on the number of Uber drivers allowed to operate in the city. The news coming from the Mayor's office came in several days after Uber general manager, Josh Mohrer, publicly announced that he wanted to hold a live streaming debate between himself and de Blasio in order to discuss the bill for the public at large to witness; in addition to Mohrer's challenge, New York Gov. Andrew Cuomo who recently called Uber “one of the great inventions of this new economy”, which struck a more political blow to de Blasio, seeing how Cuomo has always supported the [populist progressive mayor in the past. There are four key points to understand about this whole situation:
Over this Independence Day weekend, New York City Council Speaker Melissa Mark-Viverito stated that proposed legislation that would limit the number of app-based driving services (such as Uber and Lyft) was motivated purely by the need to control "traffic congestion, pollution and labor standards," not because of the falling value of taxi cab medallions. In an interview between Ms. Viverito and radio program host Brian Lehrer:
Uber, the app-based ridesharing service based in San Francisco, has caused a stir in a local New Orleans suburb, where Attorney Deborah Foshee began investigating as to whether or not the taxi service can legally operate its vehicles in Jefferson Parish. According to a recent Associated Press article:
Recently the state of California struck a major blow to the ride-sharing industry, primarily the popular app-based taxi service, Uber. On June 19th, the California Labor Commissioner issued an order which officially labels Uber drivers as employees, instead of independent contractors like the ride-sharing business had intended for them to remain.
A Georgia lawmaker, state Rep. Alan Powell (R-Hartwell), has filed legislation that would, if passed, make it extraordinarily difficult for Uber, Lyft, and other ridesharing services to operate in the Peach State.
Since its inception, the popular ride sharing service Uber has been struggling against the burdensome set of regulations governing taxi services. In essence, government enforces a taxi monopoly by making it ridiculously expensive for anyone to break into the industry. This limits the supply of taxis while keeping prices nice and high for incumbents. Everyone was happy except the people who had to put up with poor service, long wait times, and high prices.
The Virginia DMV has reportedly lifted the ban on ride sharing services such as Uber and Lyft—at least for now! The Consumer Electronics Association (CEA) has issued a press release praising Gov. Terry McAuliffe for reversing the ban against these innovative companies: