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An Uber Victory For Consumers

· July 23, 2015

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New York City officials on Wednesday abruptly abandoned plans to rein in Uber, dropping a fiercely contested proposal to cap the company’s growth in its largest market. That’s a good result, because as Mitchell Moss, director of the Rudin Center for Transportation Policy at NYU, commented, it signals “that the days of taxi industry cartels are over.”

Yet the even better lesson is that competition, if left unregulated — without political or regulatory barriers protecting incumbents — can work quickly to correct market failures. The problem in New York for decades has ben a shortage of taxi availability on rainy days and during rush times.  Here:

Consumers have become too attached to apps like Uber’s that now make ordering a car as easy as two clicks on a smartphone. That base of users has now in many cities proven more powerful than the company’s not insignificant opposition, from traditional taxi providers and labor critics.

Uber triumphs as New York City officials abandon plans to limit transportation company | WashPost

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.