Hacker News Reader

Comment by aikah | Hacker News Reader

> I do wonder what will happen once Uber starts charging market rates.

That's an excellent question and the answer is it wont be cheap. That's why, in countries where Uber operates, a clear legal framework is needed so that Uber doesn't end up with a monopoly. If Uber is allowed to operate somewhere then anybody should be able to do that without the need for an army of lawyers and lobbyists or it's just replacing the old boss with a new boss and in the end nothing's going to change for the consumer. That's what I hate with the whole situation.

View on HN

Private monopolies are largely unproblematic as they will be destroyed by more effective competitors eventually. I'm way more afraid of government monopoly. Point in case: The protectionism and government interference that has kept the taxi business shitty for so long.

Private monopolies are in some theoretical circumstances unproblematic because according to extremist free-market ideologues they are destroyed by more effective competitors. In reality they are broken up by governments, regulated into the ground, or destroy a nation/society, and they manage to make a society/market a whole lot worse before this long-term and extreme regulatory action obliterates them and fixes the problem.

> they manage to make a society/market a whole lot worse

I can imagine this argument holding true for resource-based businesses, say, oil and gas. I can't imagine a taxi services aggregator having that substantial an impact on a nation

You're right the argument is less strong for a non-natural monopoly, but Microsoft, say, when they had a monopoly, held back computing by years and we're still seeing the aftereffects of their monopoly; it has warped an entire industry in not only the US but the world.

How is "ride-sharing" any kind of natural monopoly? Uber can't lock in either drivers or riders.

They have to consistently provide a good experience for both drier and riders, who can switch literally by opening a different app on their phone.

Uber probably had the market strength to contractually demand that you couldn't be on the Lyft network while on the Uber network. If they had done that, they would have lock-in effects. Maybe they didn't because they were afraid of monopoly accusations.

I find it ironic that people are warning about 'oooh, Uber monopoly' when their business model is all about deconstructing actual government monopolies.

Uber already has competitors in major markets. The market has very low switching costs. A new competitor doesn't even have to educate the customer on what to expect, or how it works, or even how to find drivers. All this has now been worked out, so any price gouging can be easily competed with.

I can only conclude those who want to 'regulate' Uber for the 'betterment of society' are severely long Taxi licences, or are hardcore socialists who abhor any economic freedom of agency, or maybe both.

Many countries, eg much of Europe, already have largely deregulated taxis, eg the complaints in London are just about the legal requirement to declare the fare upfront for private hire vehicles. In Sweden taxis are completely deregulated. People seem to assume that the situation is like the US taxi monopolies everywhere.

That's a pretty stupid thing to say.

Regulation of taxi services does exist for a reason other than corruption or general malfeasance. On the one hand, deregulation might increase competition and reduce fares. On the other, regulation might help to avoid price gouging or ride refusals. There's a coherent discussion to be had there.

Your shallow dismissals of all attempts as regulation as by 'hardcore socialists' or 'Taxi licenses' contributes absolutely nothing.

I'm talking about the ability of Uber to become a private monopoly. My comment about monopolies is meant to highlight the disconnect of people arguing they might form a monopoly when most places already have a monopoly.

You bring up an interesting point, though - Uber could very much suffer from being the first to break through all of these regulations, only for a second comer to step in, debt-unhindered, and destroy their business.

Reply on news.ycombinator.com