When Uribe ally Ivan Duque handily defeated socialist ex-guerrilla (and longterm Hugo Chavez admirer) Gustavo Petro last year, libertarian-minded observers were generally pleased. Compared to Petro (who famously pledged to revolutionize the Colombian economy through avocado production), Duque seemed firmly grounded in free-market principles, and promoting the free enterprise system.
However, the Duque administration has repeatedly hit a sour note on so-called “regulation” of ever-more popular ridesharing platforms such as Uber, Lyft, and Cabify. As taxi drivers increasingly take to the streets to stop traffic, hunt down ridesharing drivers, and even destroy private property and commit acts of vandalism and violence, it is clear that the Colombian government must do something.
Here is what they should not do: entrust a government ministry to “regulate” ridesharing.
“Regulating” platforms is not the golden panacea that is going to solve transportation problems in Colombia. Colombians (except taxi drivers) are extremely happy with the concept and ridesharing service. Uber (and services like it) offers better service and better prices; if taxi drivers want to compete, then they should improve the service and lower prices. Only competition in the context of a free market can benefit consumers.
When politicians talk about “regulating” something for the benefit of “us”, what they would really like to do is benefit themselves…and create more jobs in some Soviet-style “Ministry of Transportation” full of politically-connected (and obscenely well-paid) bureaucrats who do little to nothing productive. There are already more than enough people in Colombia sucking off of the government teat.
Senator Jonatan Tamayo, elected on Gustavo Petro’s Congressional ticket but a supporter of Ivan Duque, recently argued that, “”You have to regulate Uber so that there is no unfair competition. I understand that there are some projects that we are going to start studying, in order to present a working proposal on July 20th.”
Senator Tamayo, do us all a favor and read Milton Friedman’s book Free to Choose. And then don’t regulate anything.
Where, exactly, does this concept of “unfair” competition come from? Are we in Colombia…long a bastion of economic freedom. Or are we in Venezuela listening to some absurd and asinine lecture from some Chavista bureaucratic pencil pushers?
There is nothing unfair about Uber’s business model. Consumers, of their own free will, can choose between Uber, Lyft, Cabify, or the city’s yellow taxi service. That is their right. That is their choice.
Who is clamoring for the government to step in and create a whole slew of regulations for the ridesharing industry? Absolutely no one except the taxi cab owners and the taxi drivers’ union.
Regulation does not help businesses, consumers, or nations. Regulation stifles competition, innovation, and economic progress.
Look at the internet. Did the internet revolutionize the world because governments stepped in to offer oh-so-helpful-and-considerate regulation?
Hell no! Just the opposite. The internet has thrived precisely because of a lack of regulation.
Who is hurt by ridesharing? Certainly not working class and middle class Colombians who rely on it daily to get home safely, particularly at night, or if they don’t live close to the Transmilenio or other public transportation.
And this is not merely the right that is making this case. I would venture to bet that Uber is wildly popular across class and political divisions.
So President Duque…here is what you should really do to boost the economy and your own popularity: make Uber and all other ridesharing apps legal. Period. Punto. Ya!
The taxi industry is not going away, and certainly not overnight. In fact, Uber prices and taxi prices generally are rather comparable. People, however, prefer Uber because the drivers are friendlier, there are no arguments about the fare, Uber drivers do not try to overcharge passengers, the cars are newer, cleaner, and more sophisticated, and Uber can be paid for with a credit card. Additionally, for safety reasons, Uber can not be beat. There is an electronic record of your Uber route, delivered to your email, which provides peace of mind, particularly in a relatively high crime country like Colombia.
In fairness to taxi drivers, there is one area in which they generally beat Uber hands down: they do know the streets of Bogota, Medellin, Cali (or whatever city they are driving in) better than the Uber drivers. After all, they have years or decades of experience, while many Uber drivers are completely new to the game.
Nonetheless, the taxi industry must innovate, and it must compete with ridesharing, if it wants to stay alive. That is only fair.
And here is a final question for Duque or for any other political leader in Colombia: if you wanted to get your son or daughter safely home at 2am on a Friday night in Bogota, would you rather entrust them to a taxi driver or an Uber driver? I guarantee that the vast majority of Colombians would pick an Uber hands down.