Glenn Reynolds offers a quick sketch of the political economy of the Uber wars—and of any conflict between an upstart operation and an entrenched industry:
Just imagine that you're a big-city mayor. If
taxi medallions—granting the right to run a taxi to a limited number of people—sell for six figures, the people who own them are heavily invested. They'll offer lots in the way of money, political support and votes to a politician who will protect their investment from competition. Thus, even though services like Uber (which requires no medallions) are cheaper and offer service in poor neighborhoods where taxis won't go, for a politician, it's a no-brainer: Support your supporters. The result is a host of regulations and taxes designed to protect old businesses from new competition. Sometimes the new competition wins anyway. Uber has been good at generating a large base of mobile customers, then using them to pressure politicians: When New York City Mayor Bill de Blasio went after Uber, Uber used its app to let its users pressure de Blasio…. Even so—and here's the key point—politicians don't care, except to the extent that we make them care. Whatever they say when they're running for office, their top priority once elected is to build a coalition that will keep them in power, and accumulating money and influence, regardless of whether the interests of that coalition coincide with the public's.
Comments