Reply to post: Re: Innovation meet .... regulation or why Free enterprise is now a fairytale

German court slaps down Uber's ride-sharing app

dan1980

Re: Innovation meet .... regulation or why Free enterprise is now a fairytale

@AC

Many taxi companies are horrid enterprises, this much is true. But in disliking them, many Uber apologists make the mistake of innocently misunderstanding or deliberately misrepresenting the situation and the history behind it.

As stated by another poster, above, taxi services started off unregulated in most cities and countries. Taxi regulation emerged from the problems that existed with the unregulated industry. The regulation was not created due to pressure from some greedy company, though no doubt there would have been instances of undue influence from groups. But, the fact that almost every 'modern' city has strict regulations governing taxi services, it is relatively safe to assume that the problems that were faced are endemic to an unregulated taxi industry.

So, regulation was implemented, though the specific regulations obviously varied.

What was created, in many cities, was a monopoly, but it was a government monopoly, with the government deciding and controlling who could and could not operate a taxi service and what criteria they must meet and what standards they must meet. Taxi drivers and services are therefore more akin to franchisees who have bought into the system after meeting the requirements and paying their money. To stay as a 'franchisee', they must continue to meet certain standards, just as is the case for many more conventional franchises.

The existing taxi services are the ones who are adhering to the regulations imposed by the government and this is a bargain. It costs money for the drivers and services to do this - not just to buy in but to maintain their cars at a certain level and ensure correct training and monitoring, response times and numbers, service levels, etc...

In return, the franchisees are granted a semi-exclusive right to operate.

In some locations, nearly anyone can be a taxi driver so long as they meet the requirements and get licensed appropriately and there are no limits of the number of licenses. In other locations, this is controlled very tightly.

BUT, the important point is that whatever the situation is, it is a situation implement, managed and controlled by the government.

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