Taxi Drivers’ Last Stand: “Are You Not Talking to Me?”

Tea Party Economist reports:

In Europe and now in South Korea, taxi drivers have pressured their governments to make Uber illegal. Uber supplies taxis ordered by cell phone to people who want a ride. It’s illegal, city governments say. The drivers are not licensed as taxi drivers.

Taxi drivers want guaranteed jobs and above-market wages. So, they get the government to pass a law mandating licensing. This restricts entry. This raises prices. This raises wages. So, fewer people use cabs.

Computer-driven cars are a decade away. The day that these are made legal for use on the roads will be the end of taxi drivers in that jurisdiction. Uber and its competitors will no longer have to pay drivers. The cost of getting a cab will fall. People will start using cabs more than ever before.

People who are dumb enough to still be taxi drivers will scream bloody murder, but to no avail. “It’s unfair! No one is hiring us!” True. Why should anyone hire a cab driver when a computer program works cheaper? No tip is expected.

Price competition works. Robotic cars will be safer than human-operated cars.

Even the law of diminishing returns applies to rent-seeking.