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Uber and why the Internet doesn’t like taxi cabs

October 6, 2014
A taxi picking up a fare. -- Carlos Sardá/puvlicdomain

A taxi picking up a fare. — Carlos Sardá/public domain

The noisy debate in Vancouver — and around the world — over the Uber towncar ride share service is, to my ears at least, the sound of another  artificial monopoly (this time taxis) crumbling before the leveling influence of the Internet.

I don’t believe monopolies should be tolerated simply to protect the prerogatives of the monopolists. They must clearly and decisively show they serve the public interest or they should be thrown on the scrap heap of history or just thrown into the marketplace where they can evolve or perish.

The Internet exposes monopolies that have lost their value

Before the Internet, there was often no other way to deliver services except through specially designed and centrally coordinated bureaucratic systems. These systems were expensive to setup and run. The result was a society serviced by a lot of monopolies, big and small.

But the Internet has knocked the pins out from under a whole category of service delivery monopolies:

Music, movies, books, news and information, classifieds, radio, television, telecommunications, taxis, buses, utilities, government, and countless others, all distributed centrally, originally out of necessity then habit.

The Internet provides virtually everyone instant and free access to a massively sophisticated and decentralized distribution network with all kinds of feedback mechanisms. At a stroke the Internet removes the rationale for all sorts of monopolistic, centrally controlled, delivery systems.

But even without the original logistical necessity, these entrenched monopolies have tried to survive on the strength of momentum and tradition; buttressed by standards of practice and rules of professional conduct.

This just doesn’t seem to cut it with consumers who, given a choice, generally have different value priorities than old-line service providers.

Isn’t the customer always right?

Typically, as the Internet loosens a monopoly’s control, the public shows how little they care for restrictive industry standards. The public always goes for the freedom of choice that the Internet appears to offers.

The public chose MP3 files and the ability to choose individual songs over the high-fidelity of restrictive 10-song CDs. And once the ability existed the public chose to do it illegally until legal alternatives were created such as iTunes and all the digital music download services that followed.

Likewise the popularity of downloading movies over the Internet shows how little much of the public cares to watch movies in the restrictive environment of multiplex theatres — they’ll take the choice to watch what they want, when they want. And again, many of them will do it illegally until they are given legal channels such as Netflix.

The Internet made the maddeningly-complicated idea of peer-to-peer file sharing possible, why not peer-to-peer ride sharing?

Protecting taxi service for who?

As far as I’m concerned, Uber is another iTunes or Netflix or Kickstarter — another example of a younger generation of entrepreneurs, not so blinded by tradition, looking through the modern economy and identifying service delivery models obsoleted by the Internet.

If Uber actually provides a better service to the public then the writing is on the wall for traditional taxi services.

History — not just Internet history — shows that once people realize a thing that they want can be done, the genie cannot be put back in the bottle. You cannot un-invent technology. You cannot easily suppress a good idea and you cannot protect a monopoly for its own sake in the face of real public demand.

Of course,  you can try. You can try to shut down the Internet for instance, or else the taxi monopoly — among others — will just have to evolve or go extinct. Click the image to enlarge it.

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