Progressive New York Mayor Bill de Blasio and Socialist Paris Mayor Anne Hidalgo found common cause on a shared threat while attending a recent climate-change conference at the Vatican.
“The people of our cities don’t like the notion of those who are particularly wealthy and powerful dictating the terms to a government elected by the people,” de Blasio declared.
“As a multi-billion-dollar company, Uber thinks it can dictate to government.”
But before de Blasio could return from Rome, he learned that people really don’t like it when politicians try to take away their favourite app for getting around the government’s taxi cartel. The mayor was forced to drop his plan to limit Uber to a 1 per cent annual increase in cars, far below the current rate.
It’s hard to see why de Blasio thought that would be good politics. Two million New Yorkers have downloaded the Uber app on to their mobile devices — a quarter of the city’s population and more than twice the number of citizens who voted for de Blasio.
But it’s easy to understand why he views Uber as an ideological threat. A tipping point is in sight where big-government politicians can no longer deprive consumers of new choice made possible by technology — whether for car rides, car sharing or home rentals. De Blasio’s experience should encourage other politicians to sign up for innovation.
Uber has become a wedge issue. The Conservative mayor of London, Boris Johnson, took the opposite approach from de Blasio. “You are dealing with a huge economic force which is consumer choice, and the taxi trade needs to recognise that,” he told a gathering of taxi drivers. “I’m afraid it is a tragic fact that there are now more than a million people in this city who have the Uber app.”
When cabbies objected that Uber drivers were undercutting their prices, Johnson replied: “Yes, they are. It’s called the free market.”
Presidential candidates are divided as well. Hillary Clinton implicitly criticised Uber in her campaign speech on economic policy, saying the “so-called ‘gig economy’ raising hard questions about workplace protections and what a good job will look like”.
By contrast, Marco Rubio has a chapter in his presidential campaign book, American Dreams, titled “An America Safe for Uber”.
He describes explaining to a college class he taught how Miami had banned Uber cars. “As my progressive young students listened to me explain why government was preventing them from using their cell phones to get home from the bars on Saturday night, I could see their minds change,” he writes. “Before I knew it, I was talking to a bunch of 20 and 21-year-old anti-government activists.”
For its part, Uber hired David Plouffe, who managed Barack Obama’s 2008 campaign, to help wage the political fight.
De Blasio didn’t know what hit him. He justified the cap on Uber cars by blaming the company for traffic congestion, citing a 1.36km/h decline in Manhattan’s average vehicle speed between 2010 and 2014. That took chutzpah, given it was the mayor who pushed through a 10km/h reduction in the speed limit to 40km/h. It also ignored the numerous bike lanes and pedestrian roadblocks the city built during that period.
Uber made the fight personal by adding a “de Blasio” mode to its app, estimating how long the wait would be under the proposed law. Model Kate Upton tweeted in Uber’s support. Errol Louis wrote in the Daily News that “Mayor de Blasio is leaving NYers stranded — like a black man trying to hail a cab uptown”. An Uber spokesman picked up the theme: “There is nothing progressive about protecting millionaire taxi donors who mistreat drivers and discriminate against riders.”
New York taxi plates have plummeted in value due to competition. Owners made the fatal miscalculation of assuming City Hall would always protect them by limiting the number of cabs. They failed to anticipate how new technology disrupts every industry. Apps like Uber give consumers better protection, prices and services than regulators ever can.
Government-enforced cartels fall faster and harder to disruptive innovation than most businesses. When change comes, it is more dramatic than in industries that already have competition. The fate of taxis is a warning to other regulated industries that new technologies always give consumers more choice. And citizens can always make the choice to vote for candidates who embrace innovation over regulations that protect entrenched interests.