The Contentious Uber

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By Kalbasa Arbuzken

What’s all the fuss about these ridesharing companies such as Uber and Lyft? Why have taxi unions, for example in London, staged protests blocking whole streets off in disdain towards these companies?

What is the controversy all about? Why is there any controversy at all particularly when Uber is like any other business competing in a free market, capitalist country like Australia?

You would think Uber to receive an open welcome by the political establishment and by the laissez faire economists. Hailing Uber as a prime example of the efficacy of the free-market and democratic capitalist countries, a further victory for the ‘Western’ world.

Taxi companies are venting their objection at the symptom of the issue, not the problem or ‘cause’. Essentially, taxi companies with their unions and politicians who have a symbiotic relationship, say that these ridesharing companies are illegal and are unsafe. How is this ‘illegal’ then? It’s quite simple actually. Taxi companies’ fume that they pay exuberant costs in government issued licenses, which the politicians want to keep going as that is revenue. From this perspective it seems fair, but the underlying point is missed: the ridesharing companies challenge government regulations and protectionism which is polar to the free market. This state controlled taxi cartel is quite contrary to a capitalist system. Why shouldn’t a company hire freelance contractors employing their own vehicle and at the same time requiring high standards of compliance to enter into voluntary trade? You want travel service to ‘x’ destination and I have a vehicle capable of doing that for you. Just pay me some money and leave me a review and I will leave you one. This is a win-win scenario. Put plainly, and in truth it’s this plain, there is no problem.

The ‘Comprehensive Operating Statement For The Financial Year Ended 30 June 2014’, from the Taxi Services Commission report, the government raked in approximately $80 million in revenue. An astounding amount for what essentially equates to a ‘middle man providing rent services’ position.

The free market, yet to see the light of day in the real world, only exists as words passed around the media, universities and some of the financial institutes. A good step towards a more honest capitalist system is to reverse the legal standing of corporations as legal persons, thereby bringing individuals to accountability. In truth, government regulation is antithetical to a free market system. In a free market economy, Uber and Lyft would compete openly with taxi companies and this in turn would lead to efficiency and better services as these companies would strive to get your buck. One only needs to refer to the works of the greatest ’free market capitalism’ thinkers suck as; F. A. Hayek, Ludwig Von Mises and Murray Rothbard. Indeed this school of thought, known as Austrian Economics and ties in with the Libertarian school, can be traced as far back as the 6th century BCE to whom some have called the first laissez faire capitalist, Lao Tzu the founder of Taoism.

On the issue of the current legal debacle, as taking place in the United States, the government the ever truthful overlords, want to designate Uber drivers as employees rather than as contractors so as to tax a higher portion of their earnings. Makes sense if your job relies on the money of others to function. UberX, the commercial service side of Uber here in Victoria is facing legal woes pertaining to the violation of section 158(1) of Victoria’s Transport (Compliance Miscellaneous) Act, with $7583.50 as the penalty price. And what have these UberX drivers done? Well they have dared “…to operate a commercial passenger vehicle without a licence, permit, or other authority”, as described in an article from the Age. You see even the wording of the Act (known also as Statutes, which is positive law or man-made law) hint to the nature of the regulatory and protectionist nature of the government.

For the elucidation of the reader, the following definitions were employed, taken from :

Capitalism: an economic system characterised by private or corporate ownership of capital goods by investments that are by private decision, and by prices, production and the distribution of goods that are determined mainly by competition in a free market.

Laissez faire: (economics) an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies.

Free-market: a summary term for an array of exchange that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economicgoods, either tangible commodities or non-tangible services.
So what the point of this article? In truth, to simply show how from basic principles, other humans (the concepts government or state) impeding the voluntary (non-violent) action of other humans is utterly absurd. As Travis Kalanick, the founder of Uber, said in an interview, ‘Whoever bought that medallion basically is buying into a corrupt system that’s bad for society”. In reference to the regulatory taxi medallion system of New York city. With government regulations and restrictions, which impede voluntary human interaction, win-win scenarios will be as scarce as hen’s teeth.

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