Since the invention of Uber, Taxis have been angry about a new business undercutting their market, and rightfully so. Uber has entered a market with extensive barriers of entry, simply bypassing them at the expense of the taxi drivers. Taxi drivers are only trying to make a living as well. This kind of negligence from the federal government is dangerous, and it affects the lives of many. Uber is innovative, but taxis have a right to be angry about biased regulations on them and not their competitors.
Uber started out as a rideshare service, meaning people would give others rides to the same or similar place that they were already going, which is very different from the system and services they provide today. Uber was not regulated at the beginning because of this, and because regulating this type of service is next to impossible. Uber has since transitioned into a taxi-like service, and because of that, the old system is no longer viable. As of March of 2014, there were 13,605 taxis in New York, and that number is capped and regulated by the local government. They purposely have too little taxis for the market, therefore making taxi driving competitive. It is based off of “medallions”, which is basically the permit for a driver to drive a taxi and are given out by the government, and these are hard to come by. Unfortunately, because taxis are regulated and Ubers are not, taxis are charged more in taxes and fees and have to jump through hoops to do their jobs, while Uber is very different.
Many taxi drivers are angry at Uber for taking their business, but in reality, they should be mad at the government. The government is the one that strictly regulates taxis drivers, yet cannot find a system to regulate Uber, and other rideshare services such as Lyft, effectively. Uber was able to find an innovative way to take advantage of the free market, while duping the federal government in the process. They are able to run their business as they please, employ people to drive, and provide customers with better service, and cheaper prices than taxis could ever offer. There are obviously many factors involved, but the primary reason this happens and taxis can't keep up is because of the taxes and added fees taxis have to pay that Uber does not. Taxi drivers have paid into a system with large barriers of entry, due to government regulation, and they have a right to be angry when other businesses are not held to the same standards.
Taxis can and should be mad, but their anger is misplaced. They should not be mad at Uber for innovating and finding ways around the system in place of regulation, they should be mad at the government for forcing these regulations on them to begin with. These regulations they face take away the competition within the market and make it significantly harder for others to enter the market, which puts taxi drivers at a disadvantage, even once they do enter the market. A taxi company in San Francisco recently filed a lawsuit due to Uber not being held to the same standards as taxis and other services. Fortune reported: “In short, Flywheel says that Uber’s practice of subsidizing rides by pricing them below cost has the effect of forcing competitors like taxis, whose prices are regulated, out of business. This is monopolistic behavior, argues Flywheel. ‘Once all competitors have been forced from the market, Uber, unfettered by competition, will be free to charge exorbitant prices for all ride-hail transportation in San Francisco,’ Flywheel said in a statement.” Uber responded: “We compete with lots of ways to get around, especially car ownership. Our goal is to provide a credible alternative to the private car,” an Uber spokesman told Fortune in a statement. “Our technology lets us make our network more efficient over time, and innovations like uberPOOL are further lowering prices, making ridesharing more available to more people.” This is a perfect example of the misplaced anger that taxi drivers have, and blaming Uber is not the answer. Taxis need to call on the government, state, locally, and federally, and demand that they abolish these barriers of entry for all businesses, allowing actual competition to sort this issue out.
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