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Uber and Its Enemies

Uber and Its Enemies The Daily Beast


There’s no doubt that Uber should be held responsible for the deadly actions of its driver. (More on the lawsuit in a moment.) But members of San Francisco’s taxi cartel are trying to turn this tragedy into a broader indictment of the company and its business model. Outflanked by companies like Uber, they’re resorting to the timeworn tactic of seizing on an isolated incident to persuade the government to enact new rules that would cripple their competition.

Cabbies in other cities are resorting to similar tactics. On Thursday, a group of taxi drivers sued the city of Chicago in federal court for not clamping down on “Unlawful Transportation Providers.” You have to hand it to the group’s lawyer, Michael Shakman, for maintaining a straight face when telling the press that the lawsuit is really about “whether low-income areas and people with disabilities are going to be left without taxi service.”

First, some background on the taxi business. San Francisco, like many cities, grants exclusive permits to operate cabs that are called “medallions," which hold tremendous value. (In New York City, a taxi medallion fetches over $1 million.) This system has had the unintended consequence of turning cab operators into a mobilized interest group out to protect both their oligopoly and the resale value of these precious licenses. San Francisco's drivers fought for years to limit the supply of medallions, which is why it’s often impossible to hail a cab there.

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It's going to be interesting to see if Uber and its powerful friends (Google, Silicon Valley) are able to overcome entrenched cartels and savvy political interests.

They might succeed, or they might fail in a big way.

At some point it might make sense for them to be bought by Apple or Google, to have the deep pockets required to fight all the impending legal battles, in the same way Google was able to shepherd YouTube.

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