Comment by tjpd | Hacker News Reader

Comment by tjpd | Hacker News Reader

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There are plenty of examples of individual companies (or groups of companies) getting too much monopolistic (or oligopolistic) power and doing just that or similar. You could look at at the Phoebus Cartel of lightbulb manufactures [1], the Bell System monopoly [2], or in transportation the GM Streetcar conspiracy [3].

Due to Uber's network effects you could say they'd have even greater power to change prices dramatically. Let's say Uber became the dominant transportation network in a particular geography and then trebled prices. Any new competitor has to both lure riders and drivers from Uber. Riders, sure they can be lured by cheaper travel but drivers want to earn the most money. Uber could simply double how much they paid drivers. All the existing drivers (and any new drivers) would rather work for Uber and get paid more. In fact they would have a vested interest in seeing the competitor fail.

1: https://en.wikipedia.org/wiki/Phoebus_cartel

2: https://en.wikipedia.org/wiki/Bell_System#Nationwide_monopol...

3: https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...

Phoebus couldn't last, no free market cartel can.

Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.

But in reality Uber can never become a natural monopoly, entry into their market is too easy and just gets easier over time as costs decline for systems development/operation.

What will happen if they succeed is that Uber will become a valuable brand, people will prefer it, and other competitors will be forced to compete solely on price. So far brand building is something Uber is struggling with.

> Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.

I think it's unlikely that the current political climate will allow such problems to be solved with regulation.

At this exact moment? No. But if Uber was really gouging people Trump would be one of the first to try to make political capital from regulating them.

Politics is politics. I was just re-listening to Dan Carlin's podcast series on the fall of Rome. He starts with the Graccus brothers, who were populists. Rome had an elitist power structure, basically the founding families controlled the senate, with the Equestrians and Plebes below them (and slaves below that).

The Graccus brothers got themselves elected Tribunes, which were roles intended to check the power of the senate, and took those roles to push forward land and other reforms to check the power of the senate and give things to the middle class and poor (some would say to buy the mob).

To stop this, the Senate at one point recruited their own Tribune candidate, and he didn't promise to rollback the Graccus reforms, in fact he did the opposite. Instead of giving away land for cheap prices to the Plebes, he offered them free land. He offered even more bread subsidies, and instead of the state paying for a foreign colony for the plebes, he offered to pay for 12 of them. And he got elected to replace Gaius Gracchus.

All politicians are sensitive to where the wind is blowing and most try to take advantage from it.

Don't forget cable providers.

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