Saturday, 3 August 2013

This Is Why We Can't Have Nice Things: Uber And Lyft Drivers Being Arrested [ Bus1nessN3wz ]

It's a long standing contention of mine that one of the reasons for slowing economic growth in recent decades has been the morass of regulation that deters people from doing anything new: doing something new being one of those definitions of economic growth of course. At which point we get this gobsmacking story from California:

At San Francisco International Airport, they're arresting car drivers for ride-sharing. Police officers approach the cars and start asking questions, and then, a few minutes later, airport officials arrive with the arrest papers.

The problem is that these drivers are offering rides through ride-sharing companies such as Uber and Lyft, using cars that aren't certified as taxis or limos and thus not meeting the airport's regulations for who can provide paid pickup and drop-off. So far, according to SFO spokesman Doug Yakel, eleven Uber drivers and one Lyft driver have been cited for misdemeanor unlawful trespassing. "We're certainly open to new business concepts, but not at the expense of safety," Yakel says.

The two services, Lyft and (this part of) Uber are simply electronic methods of hitching a ride. That electronic thumb replacing the one waving by the side of the road. That's it, really, that's all they are: and yet airport authorities are arresting people for doing this?

We could of course take them seriously, at their word, that this is all about safety, but why bother to do that when we can look at the larger picture? Which is that every taxi company and commission in the country has been desperately searching for a reason not to allow these services to operate. Even when they do allow it, it's only after 18 months or so of procrastination.

And it is this that I am certain is contributing to our inability to have nice things. We've simply set the rules up so that too much protection is being given to the incumbents in any area of the economy and not enough room being left for those who would disrupt by doing things in a different manner. We need to recall that there are two ways to get economic growth: the first is by doing entirely new things that expand consumption opportunities. The second is to do old things in a new manner, more efficiently, thus freeing up resources that can be used to do either new things or just more things. And it's that second method of growth that I fear is getting kyboshed by the regulatory state. Those who currently do things the old way have too much power to prevent the new methods from becoming established. It's that, as I've said many a time before, we're not allowing enough of the destruction that is part of capitalism's creative destruction.