In March Seattle passed an ordinance mandating that Uber (and other similar companies) could only have 150 active drivers on the street at a time. A clear case of rent seeking on behalf of traditional cabbies, this restricted the supply of Uber cars below below what the market demanded.Fortunately for Uber patrons, the city has now reversed itself and lifted the cap entirely. Not everyone is happy, as Geek Wire reports:
GreenCab Taxi General Manager Chris Van Dyk, who’s listed as a plaintiff in the referendum lawsuit against the City, said in advance of the announcement that there would be a major problem with ending the cap on the TNCs.“The experience in Seattle in years past, in San Francisco and in Ireland now, is that if you have unlimited entry, if you have no limit on the number of taxi and for-hire vehicles, operators simply cannot make a living wage, and the industry goes to hell in a handbasket, and in a relatively short time,” Van Dyk told GeekWire. “The economics of the industry are counter-intuitive, because of the low threshold of entry. Apps do not change this.”
Van Dyk may have trouble selling some of these arguments to Uber drivers, some of whom reportedly make as much as $90,000 per year. Meanwhile consumers love the service, and this was presumably a big part of the reason Seattle caved on its original policy. The service also contributes to a greener future, and even cabbies who don’t work for Uber will be able to share in the benefits—that is, if legislatures and municipal governments get out of the way.