Original post date: September 08, 2014
Article by: Ben Douglas
High-ranking Republican officials have recently come out in support of Uber, the innovative but legally-troubled ridesharing app that connects drivers and passengers. Republican National Committee Chairman Reince Priebus penned an op-ed in the Chicago Tribune lambasting Democratic leadership for being “less than hospitable to Uber.” The RNC has even posted a petition in favor of the service on its website. In an email calling for signatures and donations, RNC Finance Director Katie Walsh condemns “government officials” for “trying to block Uber from providing services simply because it’s cutting into the taxi unions’ profits.”
There are two factual problems with this narrative and a political one. First, opposition to the interests of Uber, Lyft, and Sidecar come overwhelmingly from the taxi, limousine, and insurance industries, not drivers or their unions. Second, many of the “government officials trying to block Uber from providing services” are Republicans, which conflicts with the partisan narrative. Finally, framing the taxi innovation cause as anti-union risks alienating taxi drivers who could be some of its greatest supporters.
While the dichotomy of “taxi unions and liberal government bureaucrats” vs. “free market principles, entrepreneurial spirit, and economic freedom” may help rally the troops in one camp, a comprehensive assessment of the Uber Wars reveals transcendence of party lines. Complicated networks of political alliances based on economic incentives and concerns regarding legal equality and insurance coverage have put many Republican officials at odds with the GOP’s position on Uber.
Georgia’s pro-taxi monopoly bill was sponsored by five Republicans and only one Democrat. Arizona Governor Jan Brewer, a Republican, vetoed HB 2262 in April—a measure supported by Uber. New Jersey’s Christie Administration co-issued a consumer alert with the Department of Banking and Insurance against using ridesharing services.
GOP opposition becomes somewhat more understandable when you follow the money. Taxicab trade associations—Uber’s primary opponents—donate generously to Republicans. The Virginia Taxicab Association has given $427,150 to the state’s politicians since 2000, of which 59% went to Republicans. A recently-formed Illinois Taxi PAC with a $1 million annual budget sent its first check to the state’s House GOP leader.
On the other hand, many prominent Democrats support Uber. Maryland Governor Martin O’Malley protested the decision by the state’s Public Service Commission to regulate Uber, arguing, “We shouldn’t try to limit a 21st century marketplace with 20th century regulations.” Chicago Mayor Rahm Emmanuel endorsed an ordinance favored by Uber.
A more politically astute narrative can be constructed in terms of benefits accrued to drivers by Uber and the costs imposed on them by regulation. For example, the strict taxi company permitting requirements—vigorously defended by the companies themselves—serve to increase market concentration. Our ongoing research on taxi regulations in more than 40 U.S. cities, has shown a significant negative relationship between market concentration and taxi driver wages. Uber also provides an avenue for luxury sedan drivers to make a little money on the side through fulfilling the unmet demand created by market entry restrictions.
Opposition to taxi cartelism is hardly limited to one side of the aisle. A big-tent philosophy is advantageous to transportation innovation by incorporating all potential allies, including Democrats and drivers, as well as providing long-term benefits to consumers of these services.