Laissez Faire on Innovation

quotes innovation disruption barriers to entry regulation

16 May 2014

Laissez Faire on innovation:

The same could be said about the cab I was waiting for. You see, it wasn’t just any cab. It was an Uber taxi. Uber, along with a handful of other competitors, found a way to thrive and succeed in an environment not entirely receptive of their presence.

In cities all across the U.S., most taxi organizations/unions/businesses hold a considerable amount of power. They created a monopoly for themselves, limiting who’s allowed to pick up passengers on the street. Fortunately, they forgot to cover all aspects of the market. They forgot to cover livery services.

Livery cabs differ from the ones you normally see on the street because you need to call and arrange for them to pick you up. Decades ago, before the invention of the Internet, mobile phones and smartphones, you usually “hailed” one of these cabs by calling for one at your home. But modern technology changed that.

Standing on that street corner, I was experiencing that firsthand. Minutes before, I had opened my Uber app and arranged for a driver to pick me up. He had called to confirm my address, and I watched on a GPS map on my phone as the car made its way toward me. A Lincoln Town Car pulled up, I got in, and it brought me to my destination.

The best part? The fare was actually cheaper than what I’d pay for a normal taxi.

Innovation finds a way. The special interests that created these monopolies for themselves will try all sorts of things to kill or stop it. The Municipal Transportation Agency (MTA) in San Francisco, where the Uber started, sent the company a cease-and-desist order, claiming they were operating an unlicensed cab company. Washington, D.C. set up a sting operation and impounded an Uber driver’s car. And Massachusetts tried to shut down the app, claiming it didn’t measure distance accurately.

But Uber’s still around… and more companies like it are popping up every day.

Read more here.