Cabs and Cars and Tobacco, Oh My!

OK, this piece really has nothing to do with tobacco, pretty much, although there might be an analogy I bring in later.  But you can't do a "lions and tigers and bears" spoof without three things, so I stretched.

Technology Review is the MIT alumni magazine, combining an actual set of articles on very cutting-edge technologies with news about my alma mater and whereabouts and stories of alumni.  It is published six times a year, and as the permanent secretary of the Class of 1973, I receive a printed copy without having to donate to the university, which I won't do as long as Jonathan "Obamacare" Gruber is still employed and teaching young people there.

In the latest edition's technology section, there was a piece about Taiwan, and how they were dealing technologically with issues between the nation's Uber drivers and its taxicab industry.  These two forces are at odds in a lot of places, including New York City, where I wrote about the City's decision to pick a winner and a loser on purely political grounds.

Without getting into the whole "vTaiwan" point of the article, suffice it to say that the island nation was trying to come up with a reasonable accommodation between the two industries.

But it made me think.

I really, really do not like governments picking winners and losers except where government contract awards are concerned, where by definition winners and losers are picked, but based on merit and cost, and not on politics.  Mostly.

In New York City, the mayor and council decided to limit the number of Uber drivers so as not to cause any competition for the taxicab business there, which generates lots of revenue and possibly bribes (often called "campaign donations") to the City and its leaders.

Well, when I read that the Taiwanese were dealing with a very similar situation, I thought back to New York and I let my mind wander, which is rarely a good thing unless I need a topic for an article here.

What, I thought, would have happened if there were neither a taxi nor an Uber system in the city at all.  Suppose that all privately-owned cars were banned, but starting January 1, 2020 the city would allow commercial passenger-carrying vehicles only.  Would there even be a taxi service started then?

In other words, if the notion of passenger-carrying vehicles were allowed with no predecessor model to start from, would we invent both an Uber and a taxi system?  Or would there be an Uber system alone?

I don't use either, since I don't travel and I have my own car when I do go somewhere.  I have used taxis in my life -- actually drove a cab for a short while -- and I've used Uber once.  And I realize that in some places, like dense cities, a service where you can just wave down an orange-yellow-colored vehicle because so many are out there, well, maybe that would be useful compared to a summon-by-smartphone model.

But I don't know if taxis would have proliferated to where they are today, highly protected but expensive to get a license to operate, if a free-flowing Uber presence were out there already.  And if the demand for cabs would have been fairly tiny had Uber been out there previously, well, perhaps the taxi industry, coming in after Uber, might not even start up, or at least be a simple niche industry, not one protected by the City.

Maybe both Taiwan and New York City should look at which service it should allow to shrink back based on consumer demand among its citizenry.  Or (gasp!) let the market decide.

If you took them away, and then allowed them to start up again and compete on a totally even playing field, well, you get the idea, I hope.  Sort of like the fact that if tobacco were discovered tomorrow instead of 400 years ago, there would be a whole lot fewer people getting lung cancer -- especially since, if you removed all the historic rationalization for certain states to protect the industry, people wouldn't voluntarily think to roll that stuff up and smoke it.  There, analogy.

I hate it when governments pick winners and losers.  And I do hope when that sort of contention happens, we need to use the square-one test -- if the two solutions didn't exist yesterday, what would be most sought by the market?

Just a thought to start the week.

Copyright 2018 by Robert Sutton
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