Friday, April 29, 2016

How Big Government is Driving Out Ridesharing


For a certain man named Demetrius, a silversmith, who made silver shrines of Diana, brought no small profit to the craftsmen. He called them together with the workers of similar occupation, and said: “Men, you know that we have our prosperity by this trade. Moreover you see and hear that not only at Ephesus, but throughout almost all Asia, this Paul has persuaded and turned away many people, saying that they are not gods which are made with hands. So not only is this trade of ours in danger of falling into disrepute, but also the temple of the great goddess Diana may be despised and her magnificence destroyed, whom all Asia and the world worship.”
Acts 19:24-27

Texas Public Policy Foundation -- Yesterday afternoon, TPPF hosted a policy primer to discuss regulatory issues related to ridesharing.  Obviously, this is happening in the context of the upcoming Prop. 1 referendum.  Panelists were Senator Don Huffines, Councilmember Ellen Troxclair, Josiah Neely of the R Street institute, and Joe Deshotel of the Travis County Democrat Party.

Troxclair explained how the regulations council passed don't create a level playing field across the ride for hire industry.  To do so would require either forcing TNC's into the city's franchise system (*SHUDDER*) or eliminate the arbitrary cap on taxi's (which we'd love, but of which the Taxi companies are the strongest opponent).  She also pointed out it might be impossible to regulate TNCs and taxis the same way, just as it's impossible to regulate cell phones and landline or Netflix and Blockbuster in the same way.

Troxclair also made a very good point about why Uber and Lyft have leverage in the first place.  They only have leverage because the service is incredibly valuable.  Hundreds of people don't stay at a council meeting until the wee hours of the morning unless they care about the issue.  65,000 people don't sign a petition unless the feeling is widespread.  That's the response to the silly "Uber and Lyft are buying an election" narrative.

Senator Huffines discussed state level pre-emption.  He considered this in the context of local government accountability.  As Senator Huffines said, "local control is not a blank check" when municipalities infringe upon the liberties of their citizens.  His goal would be to pass a bill that "levels the playing field with no regulations."  This was the first time we'd heard him talk about this issue.  He brought up a really good point when he asked if we should also fingerprint passengers to prevent harm to the driver.  We pray he doesn't give anyone ideas.

Deshotel voiced concerns the Uber and Lyft would eventually become a monopoly.  The thought was that because the companies use investor capital to keep prices for consumers low, eventually they'll raise prices after they price the incumbent providers out of existence.  We don't share that concern.  We're old enough to remember when people said the same thing about Amazon fifteen years ago.  To this day, that still hasn't happened.

Deshotel correctly pointed out that this discussion will not end with Prop. 1.  We agree with that prediction but disagree as to what it means for Prop. 1.  We believe Prop. 1 passing is the only way to get the taxi companies to acquiesce to meaningful deregulation.

Regardless of what happens with Prop. 1, this debate is going to continue for awhile.  Yesterday's primer was a good discussion of the landscape moving forward.  Kudos to TPPF.

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