George Gibbs Center for Economic Prosperity

M⁠i⁠am⁠i⁠ Tax⁠i⁠cab Compan⁠i⁠es Sue Coun⁠t⁠y Governmen⁠t⁠ Over Uber Legal⁠i⁠za⁠t⁠⁠i⁠on

By: The James Madison Institute / 2016

After local lawmakers voted to allow peer-to-peer transportation network companies, such as Uber and Lyft, to operate in Miami-Dade County, Florida, taxicab company owners filed a lawsuit against the county government, demanding $1 billion in taxpayer money as compensation.

The lawsuit, filed in May, claims county commissioners are responsible for protecting the value of taxicab licenses purchased by taxi companies.

‘An Exciting Time’

Sal Nuzzo, vice president of policy at the James Madison Institute, says the rise of the peer-to-peer economy is good for consumers.

“This is really an exciting time to see the battle of 21st century innovation hitting up against 20th century regulation,” Nuzzo said. “The same thing happened in the late 1990s, with digital music downloads. Record stores and the music industry fought it like crazy. At the end of the day, do you see a CD store anywhere these days?”

Replacing Regulators

Nuzzo says the nature of the peer-to-peer economy makes regulatory boards and government inspectors unnecessary.

“Even free-market-minded people agree that regulations in some cases help protect consumers,” Nuzzo said. “However, it seems really interesting that both Uber and Lyft enacted these [standards] on their own before being required to and in fact have used that as a marketing strategy. … [It] seems like a pretty good argument for free markets, in my opinion.”

Can’t Fight the Future

Jared Meyer, a researcher at the Manhattan Institute, says taxicab companies are fighting against innovation and consumer freedom.

“I wish that the taxi industry adopted the strategy of leveling the playing field by supporting the removal of existing, pointless regulations, rather than pushing for an application of the same antiquated regulatory model to new technology,” Meyer said.

‘Safer Alternative’ for Consumers

Meyer says the peer-to-peer economy is better than the traditional taxicab industry at protecting consumers’ safety.

“Ride-sharing’s dual-rating system and identity verification, along with its use of name-based background checks, has proven to offer a much safer alternative than taxis,” Meyer said. “But beyond that, people tend to forget that peer-to-peer online interaction has given consumers more information and power than they’ve ever had before. It is almost as if Chicken Little policymakers have never heard of Google reviews,Angie’s List, andYelp.

“Customers can hold companies accountable though a number of channels, and, believe me, a negative customer review or a flurry of angry tweets are even more damaging to businesses, including ride-sharing companies, than many citations from regulators,” Meyer said.