Nevada lawmakers are reviewing a request from the state’s transportation regulatory board, the Nevada Transportation Authority, for more funding and staffers, in order to deal with peer-to-peer for-hire transportation companies ‘increased activity in the state.
Nevada Transportation Authority (NTA) regulators, whose agency’s mission statement is ensuring “safe, adequate, economical and efficient service” for consumers, say they need to beef up staffing to monitor and regulate services like Uber.
Earning Consumers’ Business
Victor Joecks, executive vice president of the Nevada Policy Research Institute, says freer markets lead to happier consumers and more innovation.
“In a free market, companies have to earn the business of consumers by offering the best combination of prices and features,” Joecks said. “Free markets allow businesses to experiment and try new ideas. Those ideas succeed or fail based on the wishes of consumers.”
Joecks says regulatory agencies like NTA can become tools of established companies.
While there is a role for limited regulations related to public safety, too often companies use regulations to box out innovative competitors or use regulations to mandate consumers purchase their otherwise unpopular products,” he said. “Questions on regulations often come down to a more fundamental question: are individuals smart enough to figure things out for themselves or are they little more than children who need to be directed by Big Brother?”
Joecks says competition is better at ensuring quality of service than government boards and commissions.
“Making even a simple product like a pencil requires coordination among thousands of people,” Joecks said. “Even the smartest person in the world can’t compete with the collective wisdom of thousands of individuals pursuing their own self-interest.”
Old World Blues
Adam Smith, an assistant professor of economics from Johnson and Wales University, says government regulators are struggling to find their role in the new peer-to-peer economy.
“You have this kind of game going on between regulators and new companies, where regulators wish it was like the old way, where they could keep the organization in one place and just tax and regulate them that way,” Smith said. “The problem with peer-to-peer stuff is you’re regulating an organization that’s not a centralized organization. The other dynamic is that the service is so popular that they don’t want to get in the way of them.”
Smith says freer markets better satisfy consumers’ desires.
‘Markets On Steroids’
“Markets are good at getting consumers what they want,” Smith said. “These platform markets are almost like ‘markets on steroids.’ It’s getting consumers what they want at a far faster pace, and at a more nuanced level of quality, than we’re used to.”
Smith says regulators have largely been replaced by networks based on feedback from consumers.
“Regulators would be foolish to get in the way of it completely,” Smith said. “Most policymakers realize that’s a way to stop being a policymaker, to try to ban it outright.”
Andy Torbett ([email protected]) writes from Atkinson, Maine.