Uber is sparking Silicon Valley’s first major labor conflict. With the exception of online news, past “disruptive technologies” like file-sharing, internet search, and Apple’s various innovations haven’t had a major direct effect on working class jobs. But Uber is now permanently altering the cab industry, which has many visible workers already living close to the economic margins. With electric cars, autonomous cars, and 3D printing on the horizon, this may well be a harbinger of things to come.
As a result, it is worth thinking about how to address the distributive conflicts that are emerging. Current debates around Uber pose choices between regulation and markets, and between producerism and consumerism. In this post, I argue that the former is a false distinction, and that the latter doesn’t begin to capture the complexity of the issues. Spoiler alert: I don’t have any ready solutions to these challenges, though I do believe we need to start thinking about them differently.
One reason I love reading about this conflict—apart from my own background in labor law—is that it is such rich terrain for regulatory theory. For example, we have taxi drivers and companies capturing monopoly rents enabled by existing licensing structures; we have a standard regulatory dilemma moving into overdrive as a new technology threatens existing social practices and rules; we have the relationship between law and worker organizing on the ground; and we have lingering questions about passenger discrimination by Uber drivers.
That said, I think the cab drivers’ argument that Uber “isn’t properly regulated” is a complete political loser, for the simple reason that Uber is making the very same argument! In fact, they wear it like a badge of honor, arguing that their business enhances consumer welfare while highlighting the perversities of existing rules. (The argument that Uber is dodging taxes may be a different matter, but that has little to do with the underlying dispute here).
At the same time, let’s collectively call BS on Uber’s casting itself as the champion of competition and freedom over regulation and protectionism. For one thing, Uber is now playing a game of regulatory arbitrage, benefitting from the service gaps created or reinforced by existing regulations—all while benefitting from consumers’ belief that car-hire services are relatively safe, which is in part a function of existing regulations. Moreover, if taxi regulations were altered, Uber would face greater competition, at which point it would almost certainly seek public regulations to keep out competitors. Because that is what dominant market players do.
So the question isn’t between regulation and markets, but rather how to balance the various goals to be advanced through car-hire services within a particular area. Off the cuff, if one were designing a car-hire system from scratch, one would presumably want to ensure (a) a reasonable level and quality of services; (b) reasonable user costs; (c) equity in services (though anti-discrimination rules, guarantees of service to the poor, etc.); (d) other public goods such as safety and environmental protection; and (e) a decent livelihood for drivers.
Via Concurring Opinions