Uber Was Once The Underdog, Now They Use Regulators To Quash Competition

When Uber started, they were the underdogs. They were fighting against regulators who protected the entrenched interests of taxi companies, often corrupt, who tried to shut them down. Those companies were big contributors to politicians.

In many places, Uber was illegal. But they’d operate anyway. People loved them, and would turn out to keep them legal. Politicians had to cave. But Uber has gone from fighting regulators to be allowed to do business, to using regulators to quash competition.

New Yorkers thought that when the city capped the number of licenses for for-hire vehicles ‘to prevent traffic congestion’ they were regulating Uber. The truth is they were doing Uber’s bidding by handing the ridesharing giant a tool to keep out competitors. Uber (and Lyft) are the big lobbying spenders now.

In New York there are a limited number of licenses, and those are busy working for Uber. New competitors have a hard time entering the market. Startup Revel thought they found a loophole that would allow them to compete against Uber in New York. The Taxi & Limousine Commission created an exemption to the cap on ridesharing vehicles for electric vehicles. So they’d use only electric vehicles in their service. They’d be driven by employees with benefits, too.

In a perfect example of regulatory capture, the Taxi & Limousine Commission did Uber’s bidding to keep out a new competitor: they abolished the electric vehicle exemption just before Revel’s launch.

Revel CEO Frank Reig criticized the TLC’s “unprecedented resistance” to the company’s plan, which would have seen it launch an initial fleet of 50 electric Tesla Model Ys, driven by employees rather than independent contractors.

“Revel isn’t going to flood the streets with thousands of cars at once like other operators have in the past,” Reig said. “In fact, we literally can’t do that,” he continued, noting the lack of charging infrastructure in the city.

The Taxi & Limousine Commission reportedly had even formally made its decision to ban Revel and held a public meeting afterward only to satisfy legal requirements, and didn’t even take time to consider the arguments presented before moving forward. It was a fait accompli.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Pingbacks

Comments

  1. Gary, Uber has been using regulators since 2014. It literally sought to shape and create rules everywhere to keep out additional competitors. It approved of — and encouraged — licensing, bonding requirements et al. to ensure no one new came along.

    The scrappy startup ended in 2013-14. That’s already a long time ago.

    (Disclosure: I worked there, this isn’t idle chatter)

  2. Whenever the government regulates something “for your safety” you can bet there is a corporation or special interest group behind it. So many people think government or corporations actually care about people. To them, people either = money or a burden, and treat them accordingly. If people could just see through the BS and have a little more critical thinking or evaluating long term repercussions America would be much better off. Instead, people just regurgitate the talking points that are spoon fed to them by “the media” because the “message” sounds good. China knows how to do this well, and unfortunately I think the technique is infiltrating us here now too.

Leave a Reply

Your email address will not be published.