Wednesday, September 3, 2014

Advantage Ordo-Liberalism

At least in Hesse, Uber won’t be able to offer its peer-taxi service due to a ruling by a court in Frankfurt.  No, they weren’t objecting to the absence of an umlaut; rather to the fact that Uber doesn’t require that drivers have licenses or that they have to pick up anyone who needs a ride.  To understand this, note that (1) taxi drivers, like just about everyone else in Germany, go through apprenticeships that certify their mastery of the relevant skills, and (2) it is illegal for taxi companies to refuse service to anyone willing to pay for it.  The court ruled that if Uber wants to compete it has to meet these same criteria.

No doubt we will be hearing a lot in the coming days about how backward and inefficient, monopolistic even, the Germans are, and how they need to be rescued by Anglo-Saxon entrepreneurialism.  Not from me though.  I’m with the German court: the ordo part is not expendable.

The most important stipulation is the obligation to provide universal service.  If laissez-faire means that some people or parts of town won’t be served, scratch laissez-faire.  But maintaining a high level of skill is also valuable.  Maybe in only one ride in ten I’ll need a driver who knows obscure destinations and how to get to them, or how to avoid a particular traffic tie-up, but when I need it I really need it.  Guaranteeing that drivers are safe is obviously essential.  And there is a social interest in maintaining a living wage and professional respect for service providers of all sorts.  Obviously this is a question of balance, finding the right mix of competition and regulation, but the uber approach, like its name (with an umlaut) implies, puts the first over the second unconditionally.

If Uber’s take on taxi service is technologically superior, let them demonstrate this by competing on an equal social basis.

1 comment:

Anders Fremstad said...

I'm not a huge fan of Uber, but the current taxi system doesn't work that well in lots of places either. I don't know about Germany, but in the U.S. taxis don't serve all neighborhoods and often discriminate on the basis of race. There probably are not enough taxis in many markets. In some cases, Uber might get cities to improve the taxi system.

I am a huge fan of apps like Blablacar that facilitate ridesharing (or digital hitchhiking). These platforms could actual raise vehicle occupancy and reduce carbon emissions. Although they have yet to take off in the US, I think it would be a mistake to require drivers on these services to meet the same safety standards as taxis.