A Geek With Guns

Chronicling the depravities of the State.

Watching Cronies Fail

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A major benefit of providing solutions to government meddling is watching as the government’s cronies fail. Cab drivers in Mexico, as cab drivers in much of the world, are unhappy with ride-sharing services such as Uber and Lyft. Their unhappiness is understandable since they’ve been shielded from competitors by their government for decades. When you haven’t had to compete in a market it can be scary facing competition because it makes you realize that you have to actually provide a superior service if you want to thrive.

On Monday cab drivers in Mexico went on strike to protest Uber. The protest was a plea for the Mexican government to ban Uber. The end result was to give Uber a great dead of publicity and convince a lot of people to try Uber since they couldn’t get around using traditional cabs:

Monday’s protest from Mexican Taxi drivers, against ride-sharing mobile apps such as Uber, has proved a boon for the San Francisco-based company. After offering a protest-edition special with two free 10-dollar rides, downloads of the app rose by 800 percent, Uber Communications Director for Mexico Luis de Uriarte said on Tuesday.

Unlike Uber, the signs of regulated taxis were off in Mexico on May 25, as some 5,000 drivers took to the streets of Mexico City. Chanting “Get out Uber!” union leaders demanded the government impose a ban on the smartphone-based service.

With the hashtags #UberNoPara (Uber doesn’t stop) and #MexicoNoPara (Mexico doesn’t stop), Uber launched a campaign offering two MEX$150 (US$9.8) fares for free between 7:00 a.m. and 9:59 p.m. on Monday. The initiative not only have become a commercial success, it brought PR blowback on the taxi drivers.

Uber and Lyft are providing a solution to a market that has been crippled by government regulations for decades. Many localities put an artificial cap on the number of legal taxi cabs that can operate. Other localities, while not putting an artificial cap in place, require potential taxicab drivers to pay a licensing fee, which adds a barrier to entry. The result has been lackluster taxicab services in much of the world. With ride-sharing services such as Uber and Lyft anybody can act as a taxicab. Suddenly cronies that have been protected from competition are facing the competition of anybody with a vehicle and they’re floundering.

Providing solutions to government create problems weakens its grip by showing how unnecessary it is. While government protected taxicab drivers were refusing to provide services ride-sharing swooped in to save the day. Because of this people are unlikely to accept any prohibition against ride-sharing services.