Legislators in California see something wrong with sharing economy services like Uber and Lyft, and yet evidence of their benefits are abound. Steven Greenhut observes:
As an occasional cab rider in Sacramento, I’ve noticed something that isn’t always a given: fleets of newer cabs, polite drivers and the use of modern credit card machines. This is a city where the cabs can be so shabby, the City Council two years ago passed new regulations that require drivers to have a rudimentary understanding of local geography and English, to drive non-jalopies and “be hygienically clean.”
“The ordinance was written in response to reports of fistfights among cabbies, rude exchanges with customers and high-speed rides,” according to the Sacramento Bee. But few would credit the new rules for a quickly improving cab-riding experience. The credit properly goes to Uber and Lyft—those ride-booking services that introduced competition.
In San Diego, pressure from these upstarts caused the city to deregulate its “medallion” system that imposed a limit on the number of cabs in the city. Because of the cartel, operating permits cost more than $100,000, which forced cabbies to work long hours (earning only $5 an hour, according to one study) paying off the cab owners’ medallion fees. Now anyone who meets some basic standards is free to buy and operate a cab.
This is how markets work.
California legislators don’t like that, and are coming up with new ways to hamper such market forces.
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