Minority of One blog

Uber and Lyft, at risk in Chicago

Governments don't excel at promoting innovation, and that's fine. All they usually need to do is get out of the way and let it happen. But they can certainly suppress, it and that's what may be about to happen to ride-sharing services like Uber and Lyft in Chicago and the rest of Illinois.

The Chicago taxicab industry wants drivers for these companies regulated just like taxi drivers, and an Illinois House committee has approved a bill that more or less does exactly that. But if that framework were so beneficial, these competitors would not have emerged and found such a large customer base.

The industry and its allies think consumers need the protections of city taxi regulations. But the complaints about Uber and Lyft come much more often from their competitors than their customers.

The companies say they provide insurance to cover injuries to passengers. And with Uber and Lyft, riders know who they'll be riding with and how their past customers rate them -- which provides ample protection. Drivers gain because they can get similar information about their passengers before taking them in, and because payment is arranged in advance, they don't have to worry about getting stiffed.

The real gripe from cab companies is that they've spent huge sums of money for medallions that let them operate in a market that limits the supply of cabs, to the detriment of passengers. But as Institute for Justice lawyer Anthony Sanders, who is suing the city on behalf of ride-sharing drivers, puts it, "There is nothing in the Constitution that protects taxicab companies from competition."

Ride-sharing is a useful innovation that has proved highly attractive to both drivers and passengers. Changes like this are something to welcome, not something to stamp out. 

 

CHICAGO

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