France is at it again, it seems. Riots and unrest swept the country in what almost seems like a national tradition. This time, however, instead of protesting austerity measures or decreased rights for students in the job market, the protests were about taxis, and the introduction of Uber.
In this day and age, images of riots, protests and civil unrest are almost common. However, to get this riled up about a ridesharing app? It frankly boggles the mind that while some protest against institutional racism, police shooting citizens left and right and corrupt government, a bunch of French taxi drivers think advances in technology is a legitimate thing to riot about. Perhaps the French believe computers should be banned, because of the unfair competition they create for file clerks. Maybe forklifts should be banned in favor of groups of people lifting things.
The problem for the taxi drivers boils down to the licensure. When licenses are required to carry out some sort of business, a barrier to entry is created, preventing competition from acting in the market. Raising the cost of doing business directly decreases the number of people who can do business. When competition is strong, the only way to make money is to satisfy customers better than anybody else in the market. Without competition, there is no incentive to satisfy customers. Comcast is considered by many to be one of the single worst companies, especially in terms of customer service. It’s not surprising, when providing cable TV and Internet is a geographic monopoly.
New York City is a classic example of taxi regulation, where taxi drivers need to purchase a medallion in order to be able to legally operate a taxi. Instead of a small fee, however, NYC taxi medallions can cost over $500,000. Prices on a website selling medallions can even approach $800,000, and medallions sold in auction can cost in excess of a million dollars.
A cost of a million dollars to enter the market may make sense for a chemical laboratory or luxury hotel, but for an individual to drive around a city, giving lifts to people should cost no more than the car and the gas. The French taxi drivers claim that Uber is unfair competition. How competition in the marketplace can be unfair is completely beyond me. If customers routinely choose a competitor, they do so for a good reason – price and customer service. The blame for a taxi driver’s inability to satisfy customers rests solely on the driver and nobody else.
If a bakery selling sub-par, stale sandwiches with mystery meat decided that Jimmy John’s was unfair competition and called for Jimmy John’s to be declared illegal, people would scoff. The same thing happens in France, but the French government agrees with the taxi drivers. In fact, two executives of Uber have been arrested.
To be jailed for wanting to provide a harmless service to people is the sort of totalitarian measures one might expect in Nazi Germany or Soviet Russia, but democratic France in 2015 is just absurd.
These licensed taxi drivers are acting like spoiled children, crying to their parents to force the other children to play by their rules, having fully rid themselves of the most basic responsibility in the market. Technology is ever-improving, but the advances will never make an impact on the world when people feel they have the right to forbid anything that might make it harder to make a buck.
I’m reminded of wagon-makers protesting the automobile, saying Henry Ford was killing their livelihood. If they had got their way, cars would have been declared illegal. Sure, it sounds comedic and absurd, but that way of thinking is more common than it should be.
A famous piece of satire by French economist Frederic Bastiat published in 1845 called “The Candlemakers’ Petition” tells the story of those involved with making candles asking the French government to block out the sun due to its unfair competition. It certainly seems that in 170 years, the ways of thinking have not changed a bit.
When the lawmaking ability of the government is coopted by greedy business owners with no goal but to avoid the work it takes to improve customer satisfaction, it’s the public as a whole that pays for it.