Defend Uber! The FTC Jumps Into the Fray — On the Side of Disruptive Competition

FTC Commissioner Josh Wright, a former TechFreedom Adjunct Fellow, blasted the D.C. Taxicab Commission’s proposal to protect the taxi oligopoly from Uber, Lyft, Hailo and other disruptive Internet-based competitors in the Washington Post:

A wave of creative destruction is now crashing down upon the taxicab industry…. As is to be expected with any outbreak of creative destruction and innovation, consumers are reaping the benefits and entrenched interests are fighting back to suppress this new form of competition. The entrenched interests include not only taxicab drivers but the bodies that regulate them….

The appropriate referee for that competition is not the commission but consumers in the marketplace. Unlike the Taxicab Commission, the FTC does not weigh the interests of various groups in deciding to take action. The FTC serves the interest of only one group: consumers. And in the context of the taxicab industry, the FTC has long made clear through its advocacy efforts that local regulatory bodies should not stand in the way of companies like Uber that use new technology and new business methods to meet consumer demand unless there is the potential for substantial consumer harm.

The FTC has sued to break up such regulated oligopolies in the past. But for now, the Commission is starting with stern comments to regulators captured by the taxicab incumbents they’re supposed to regulate, for example:

In the case of passenger motor vehicle transportation services, competition takes place on a variety of dimensions, including price, availability, timeliness, convenience, quality, vehicle type, payment mechanism, and other amenities. A regulatory framework should enable these various kinds of competition and not directly or indirectly restrict the introduction or use of new types of applications, or the novel features they may provide, absent some significant evidence of public harm. Regulation of passenger motor vehicle transportation services should focus primarily on ensuring qualified drivers, safe and clean vehicles, sufficient liability insurance, transparency of fare information, and compliance with other applicable laws. Regulation of new computer and phone-based applications, therefore, should focus primarily on ensuring the safety of customers and drivers, deterring deceptive practices relating to fares, safety and liability, and other terms of use, and addressing other consumer protection issues, especially privacy, data security, and the prevention of identity theft. Regulation should not in purpose or effect favor one group of competitors over another.

Check out the FTC’s other competition advocacy filings. Now, why can’t the FTC focus on this, instead of beating up on companies like LabMD?

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