Smartphone app Uber is changing the way people get around in a dozen major cities across the U.S. Just open the app, push a button, and within minutes a clean black sedan will show up and take you where you want to go. When you arrive at your destination, no need for cash or cards — the app has your credit-card number and automatically pays the fare, tip included.
What a great benefit to consumers, who no longer need to hunt for a cab or wonder when (or whether) a cab they called will arrive. And what a benefit to drivers, who can more easily find customers.
Despite this, rival taxi companies and government officials have tried to shut down the service. In Washington, D.C., the City Council in fact considered an “Uber Amendment” that would have forced sedans hailed through the app to charge five times the rate of ordinary taxis. That measure failed only because lawmakers received thousands of e-mails and social-media messages from the service’s fans. Uber also overcame orders from state and local authorities in San Francisco and Boston to stop operating, and it continues to fight bureaucrats and taxi-industry lobbyists for the right to offer its services in New York City.
Uber’s experiences illustrate how established vehicle services will exploit the law to stifle competition and enrich themselves at the expense of consumers. In fact, because of the taxi lobby’s influence, taxi regulations in most major cities already control prices and limit the number of vehicles that can operate — so success in the taxi business is most often determined by who has more political pull, not on who’s best at pleasing consumers.
An anticompetitive city ordinance has also barred one of our clients, Julie Crowe, from operating a vehicle-for-hire service in Bloomington, Illinois. Like Uber, Julie wanted to offer something innovative: a safer, female-friendly environment for university students who need a ride home at night. But a Bloomington ordinance requires her to have a license, and, worse, it entitles the owners of all existing taxi and vehicle-for-hire services to weigh in on whether she should get that license. Predictably, her would-be competitors objected to her application. The city then declared that “there is not a need to have an additional Vehicle for Hire Shuttle” and denied Julie a license.
The Liberty Justice Center is fighting for Julie’s rights in court because laws like Bloomington’s that infringe someone’s right to earn a living or start a business just to benefit a private special-interest group violate the Illinois Constitution. That case is currently pending in Illinois state court. Meanwhile, people everywhere should demand that their local governments repeal all protectionist taxi laws so entrepreneurs can exercise their rights and consumers can enjoy the choices and innovation those entrepreneurs create.
Learn more
Liberty Justice Center: Vehicles for Hire: Julie Crowe v. City of Bloomington
The Atlantic: Why You Can’t Get a Taxi
New York Times: As Uber’s Taxi-Hailing App Comes to New York, Its Legality Is Questioned
Techdirt: DC Dumps Bill to Force Uber Into Higher Prices