And... Yet Another Regulator Flips Out About Uber, Tries To Kill It

from the regulation-2.0 dept

Thu, Jan 31st 2013 7:49am — Mike Masnick

Here we go again. Yet another local transportation regulator who either doesn't understand Uber or (perhaps more likely) understands it all too well has decided to give Uber all the free Streisand Effect publicity it needs to build its reputation in the market by trying to pass legislation to shut it down. This time it's the Colorado Public Utilities Commission, which is looking to pass some new regulations that effectively make it impossible for Uber to operate its innovative car/taxi service (which is incredibly popular with users) in Denver. Of course, all this has really done is give Uber the perfect opportunity to get tons of attention for its service in Denver as it urges Uber fans to speak out against the regulatory changes.

Uber points out that the proposed changes will basically make its business model illegal in multiple ways -- saying that you can't price based on distance, effectively keeping Uber cars outside of downtown areas that taxis populate, and forbidding Uber's key relationship set up with drivers (independent partners). As Uber points out, these rules don't serve any legitimate regulatory purpose other than to prop up the taxi business model and hurt the disruptive upstart:

These rules are not designed to promote safety, nor improve quality of service. They are intended to stop innovation, protect incumbents, hurt independent drivers, and shut down Uber in Denver.

Of course, we've seen this before. In a bunch of places where Uber operates, the service faces regulatory crackdown by local regulators who seem to do a lot more to protect incumbent taxi services than they do to figure out what benefits the users the most. This gets back to that concept of corruption laundering that I've mentioned a few times. The regulations can be presented as having good intentions: they want to protect riders from getting scammed by unscrupulous drivers, and they want to make sure the market is safe and efficient. But, as with so many regulatory schemes, what can be positioned as having the best of intentions also serves a secondary purpose: to allow incumbents the ability to thrive, while blocking out competition and the impact of disruptive innovation. That seems to be the case here yet again.

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Filed Under: colorado, denver, limos, puc, regulations, taxis
Companies: uber

13 Comments

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Ninja (profile), 31 Jan 2013 @ 7:08am

I'm amazed someone at the Federal Govt hasn't tried to pass laws making the service a felony. That's how the US work nowadays. The established corporations buy laws that protect their businesses models at the expenses of everybody else.
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- Atkray (profile), 31 Jan 2013 @ 7:22am
  
  Re:
  You forget how slowly they think.
  
  Now that you have accelerated the process by giving them an idea it would have take them another 5 years to come up with on their own they will move in that direction.
  
  I hope you are proud of yourself.
  
  1/31/2013 The day Ninja killed Uber.
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  - Ninja (profile), 31 Jan 2013 @ 7:50am
    
    Re: Re:
    LoL!
    
    Sorry =(
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  - Anonymous Coward, 31 Jan 2013 @ 8:25am
    
    Re: Re:
    Except that you can't arrest a company and put them in jail for committing a felony even if they are a "person" under the law.
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    - Anonymous Coward, 31 Jan 2013 @ 8:48am
      
      Re: Re: Re:
      Hasn't stopped the major telecoms from drafting laws that directly make new competition with them illegal, or otherwise making it illegal for competitors to exercise fair pricing that gives them an advantage.
      
      Capitalism at it's finest. Every senator to the highest bidder.
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      - Ninja (profile), 31 Jan 2013 @ 9:08am
        
        Re: Re: Re: Re:
        That. Justice in the US serves the deepest pockets. If you happen to be on the not-so-deep side you are screwed.
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        yaga (profile), 31 Jan 2013 @ 6:19pm
        
        Re: Re: Re: Re: Re:
        Ninja, you keep talking poorly about the US like it's the only country that this happens in. Wake up. Money makes the courts go round in every country. Tell me about the shining beacon of justice and legality that is the court system of Brazil. Oh wait, it's not. It's more corrupt than the US system. Tell me how the UK is so much better than the US. Oh wait, it's not especially if you're someone famous. Greece, the cradle of democracy? Nope not even close.
        
        I like bashing the US as much as anyone but I've actually lived in several other countries and have visited many, many more so I have some real comparisons other than reading a website. I've dealt with court systems around the world. The US isn't perfect but there are a lot of other countries in the world that aren't close to being as free as the US even with the corruption of our democracy.
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    - John Fenderson (profile), 31 Jan 2013 @ 9:28am
      
      Re: Re: Re:
      But you could, theoretically, revoke their corporate status. That this remedy is considered off-limits is a real tragedy.
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- JBDragon, 31 Jan 2013 @ 9:23am
  
  Re:
  Which is why we need a much smaller Federal Government! A Government that will start following the Constitution and not step on everyone's rights!!! A Government that will let the free market work, not over regulate everything. The Government can't even protect our Boarders which is one of the Jobs it's suppose to do, and instead wants to stick it's nose into Baseball players taking steroids! Or this whole Evil of Video games, while at the same time over looking all the Violent Movies, because Hollywood is in most of their pockets. Not that they should touch Movies either. For the last 100 years the Government has been over stepping it's bounds more and more. There almost no limit on what they think they can do these days.
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Anonymous Coward, 31 Jan 2013 @ 8:44am

What's Uber?
*google* oh cool, will have to try them out... sounds way better than calling a cab.
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iambinarymind (profile), 31 Jan 2013 @ 10:00am

Regulation
The power to regulate is the power to grant favors.
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shane (profile), 31 Jan 2013 @ 12:30pm

Cabbing is a Racket
I tried to drive a cab in Austin Texas for a while. It is a ridiculous racket. Further, the rules in place basically prevent people from organizing to carpool systematically, which is a gross violation of civil rights and a rather pathetic sing of just how not-serious American government officials are about saving gas.
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Jesse (profile), 31 Jan 2013 @ 9:55pm

I nominate "corruption laundering" as the best catchphrase of 2013.

It can be used in so many more situations beyond regulatory capture.
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