How Government Cripples Innovators

uber

Preventing services like Uber and Lyft from operating discourages competition and innovation.

For US News reports: Everyone seems to love rideshare services Uber and Lyft. Everyone, that is, except regulators and the government-imposed transportation cartels they defend. You know, the ones who have been working off the same tired model of service since the days of the horse and buggy? Virginia’s Department of Motor Vehicles recently fined the operators of both innovative car services, and last week the government issued cease and desist orders demanding both stop operating or their part-time drivers would face more fines.

How popular is Uber? Just this past week it was valued at more than $18 billion.

In a previous life, I worked for a Fortune 500 corporation at a time when “entrepreneurial spirit” was the buzz phrase of corporate America. While downsizing and rightsizing, America’s corporations in the 80’s adopted a “If-you-can’t-beat-them-join-them” attitude in the struggle to keep pace with the flexibility and adaptability of myriad niche marketers plundering their customers.

[Also see Glenn Reynolds‘ USA TODAY COLUMN: Regulation: Uber’s Problem Is That It Offers Insufficient Opportunities For Graft.]

“We want our managers to be more entrepreneurial,” our divisional vice-president wrote in a memo. “We want you to think like entrepreneurs. We want you to be innovative and take risks, but be careful.”

Do we see the problem, hereCorporate executives thought they were delivering the message “be innovative and take risks,” but operational managers heard only the message “be careful.” Not surprisingly, whatever entrepreneurial spirit existed was nipped in the bud.

Fast forward to the political climate of 2014. Like misguided corporate executives of the 1980s, elected officials are sending mixed messages to American entrepreneurs.

The popularity of urban living is on the rise. Young, progressive Americans — the so-called creative class — are moving back to the cities and bringing with them a whole new set of expectations that elected officials fail to grasp, but entrepreneurs do.

These urban pioneers and entrepreneurs are seeking and providing services in non-traditional ways that are at odds with politically powerful, entrenched interests shaped by decades of regulations that suddenly put them at a competitive disadvantage. Instead of remaking their businesses to be more competitive, entrenched interests look to government to provide regulatory cover for their inefficiencies…(read more)

US News


2 Comments on “How Government Cripples Innovators”

  1. […] Pundit from another Planet Preventing services like Uber and Lyft from operating discourages competition and innovation. For […]

  2. Jim White says:

    I used to work in Crystal City and would need to take a cab to the Pentagon after work. It would always be be late at night on weekends. All the traffic would be cabs bringing drunk people home from D.C. Most of the time I would have to walk the whole way because none of the cabs would stop for me. I would be passed by literally 50 cabs a night. Some of them would stop and tell me they were sorry, “I can’t pick you up because I’m from D.C. or Maryland, or Fairfax county and I’m not allowed to operate here.” It’s a free country though.


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