Mark Thoma points to an essay by Dean Baker accusing airbnb, uber, and other services of cashing in on regulatory evasion as opposed to the Internet or other economic fundamentals. Thoma comments,
Agree about the level playing field, but perhaps it will serve as a catalyst for changing regulations that “were originally designed to serve narrow interests and/or have outlived their usefulness”?
Or a catalyst for encouraging the incumbents to act differently. The original low-cost bus services between NY and DC ultimately spurred the legacy bus companies to set up low-cost subsidiaries in order to compete.
Arnold, See my lengthier analysis here:
http://econlog.econlib.org/archives/2014/05/dean_baker_on_t_1.html
Why exactly is such illegal? Other than because it used to cost nothing to enforce?
Hotels are regulated for safety possibly because they aren’t the owner’s houses. And ease of enforcement on unrepresented taxpayers doesn’t seem like a philosophical argument as much as pure convenience…which is by definition changing with the PSST. I am constantly amazed at how quickly I disagree utterly and totally with people I thought were perfectly rational.
Well, taxi medallions in NYC cost a cool $1 Million each! They thought they were buying a kind of property right to a share of the NYC cab market without competition, with all the “reasonable investment-backed expectations” that implies (the language from the Penn Central regulatory taking case.)
The prices of those medallions are likely to fall if the city doesn’t try to crush Uber and other gypsy-cab services, but it’s not like the cabbies can really respond to competition from Uber, since they are obligated to comply with all the other cab regulations.
Instead, we’d see ordinary cabs gradually go out of business and be replaced by regulation-evading Uber, salutary neglect about which which would have the effect of ending the medallion regime by passive stealth.