The pro-Disruption argument goes like this: In a digitally connected age, there’s absolutely no need for public carriage laws (or hotel laws, or food safety laws, or… or…) because the market will quickly move to drive out bad actors. If an Uber driver behaves badly, his low star rating will soon push him out of business.
It’s a compelling message but also one with dire potential consequences for public safety, particularly for those who can’t afford to take a $50 cab ride to Whole Foods.
Laws don’t exist merely to frustrate the business ambitions of coastal hipsters: They also exist to protect the more vulnerable members of society. Back home in London (where such statistics are available), 11 women a month are attacked in unlicensed cabs, and unlicensed drivers are responsible for a horrifying 80 percent of all stranger rapes. If Uber doesn’t have to follow licensing laws, then neither does any Tom, Dick, or Harry who chooses to paint the word “TAXI” on the side of his car, and start offering rides via the Internet. A disruptive CEO will shrug (and there’s a foreshadowing word) and insist that it’s not his fault that such criminals exist. “Just because there are people who want to rape, murder, or rob you shouldn’t prevent me from making another million dollars,” he’ll argue.
One of the many things that bugs me about the Rand-o-bot kind of stuff is the assertion that not only is government regulation ineffective and or harmful, but that anyone suggesting that government regulation would help in a particular situation is either a naive flack, or is looking to implement total and complete government control of every aspect of our society and economy.
I have never met, seen, or heard any actual person who thinks that government regulation is either inherently good or an end in and of itself. It is one of many available tools, and like any tool, it can be used either effectively or ineffectively.
Government regulation, like everything in life, is a mixed bag. Some laws are passed for good reasons, some for bad. Some are effective, some are ineffective. These guys point to laws like those around NYC taxi medallions and shout "Unintended consequences!" as though every single possible action taken by anyone anywhere does not have unintended consequences (or the risk thereof) attached.