Wednesday, October 14, 2015

The Real Lesson of Leap (and VW and maybe Uber): Libertarian Tech Hubris

I think Farhad Manjoo draws the wrong lesson from the Leap debacle.  Leap, you’ll recall, was the private, for-profit and very posh bus service launched in the Bay Area a few years back.  It was pilloried for the way it catered to well-heeled techies at a time when ordinary people were finding it impossible to live in SF and many of the surrounding communities.  Well, yes, but what killed Leap was not its bad image but the fact that they tried to operate—twice!—without municipal and state permits.  The regulators shut them down.

And this isn’t an isolated case.  Uber has been facing increasing resistance from local governments around the world for trying to run a taxi service without adhering to taxi regulations.  One of the factors behind the VW diesel exhaust scandal is the disdain that the company’s engineers had for environmental regulations, or any regulations that would diminish the performance of their sleek machines.

In other words, there’s a libertarian, antiregulatory mood that has become the default culture of the techie class.  We are on the cutting edge, inventing all kinds of cool stuff; they are the dinosaurs trying to enforce brain-dead rules to hem us in.

Of course, a lot of regulation is garbage, designed to protect the interests that had a hand in writing them, and there are bureaucrats who will trot out any dumb rule they can find to maintain their power to interfere.  But most regulations, to a greater or lesser extent, exist because there were problems that people needed regulations to solve.  Transportation services have to be safe, and they can’t discriminate between people who are willing to pay to get from point A to point B.  Their service area decisions have large impacts on land values and community sustainability, and there needs to be a public process for talking these things out.  And of course the diesel exhaust standards exist because of the public health consequences.

What we’re finding out—and this is the main lesson of Leap—is that techie libertarianism is not only shallow politics, it can be lethal for business in a justifiably regulated world.  Grow up.

1 comment:

Wallfly said...

A couple of thoughts as a former taxi driver in suburban DC. Notice that the common theme among ventures such as Uber and Air BB is monetizing "domestic" property (i.e., houses/leases or cars). Given the pressure put on taxi drivers wages as they have been transformed from employees to independent contractors paying rent on their cabs (i.e. no income security at all), I am not sure the economic effects of companies like uber is all bad.
But with Uber or not, something needs to be done to protect drivers from the exploitation they suffer from taxi companies and medallion owners (which might well mean unionization).