Uber, a peer-to-peer transportation company connecting people seeking rides with drivers, is suspending operations in the city of Eugene, Oregon after the town’s city council placed new regulations on the ridesharing company’s operations.
After Uber began operations in Eugene in 2014, elected officials passed new laws requiring Uber drivers to submit to criminal background checks administered by the city’s police department and to obtain insurance policies with at least $1.3 million in liability coverage.
Asking Permission to Exist
Reason Foundation Vice President of Policy Adrian Moore says government should not force businesses like Uber to ask permission to serve customers in new or innovative ways.
“I don’t think businesses should need permission from the government to exist or start operations, so I would deregulate the taxis and other ride-share companies and let the market take over,” Moore said.
Moore says allowing companies to compete for customers without government interference benefits consumers.
“The market can handle virtually all of the problems that might arise in this market,” Moore said. “The beauty of the new technology that enables Uber and similar services is that they overcome the information problems that regulators have used to justify their restrictions. That technology and information lets issues of safety, insurance, liability, and quality of service be worked out in the market and contracts and, if needed, in the courts.”
‘Nothing Protects Consumers Better’
Moore says consumers are better judges of quality than government inspectors and lawmakers.
“On a simple level, the constant day-to-day customer feedback via the apps is far more scrutiny on vehicles and drivers than an occasional taxi commission bureaucrat inspector,” Moore said. “On a larger level, nothing protects consumers better than competition and the ability to stop using a lousy company.”
Steve Buckstein, senior policy analyst and founder of the Cascade Policy Institute, says government should get out of the way and allow consumers to engage in voluntary trade with Uber drivers.
“The only legitimate reasons for city regulation are to make sure that drivers and vehicles of both taxi companies and ridesharing companies are licensed, insured, and relatively safe,” Buckstein said. “After that, it should be between willing passengers and willing drivers and companies engaging in free trade.”
Tony Corvo ([email protected]) writes from Beavercreek, Ohio.