Uber and the Rule of Law: Should Spontaneous Liberalization Be Applauded or Criticized?
Competition Policy International (2015)
12 Pages Posted: 22 Nov 2015 Last revised: 4 Dec 2015
Date Written: November 20, 2015
While Uber is able to operate legally in a growing number of countries and cities, regulatory approval has proved to be elusive in other jurisdictions. Yet, in a number of regions or cities Uber decided to launch its services despite the absence of regulatory approval. The fact that Uber has decided to engage in “spontaneous liberalisation” has drawn criticism from various quarters. But should Uber be blamed for failing to comply with certain regulatory requirements or should they be applauded for pushing the boundaries of the law? Whether spontaneous liberalization should be applauded or criticized depends. While there is generally no justification for ignoring rules that are necessary to protect the services’ users and nonusers from the risks that are inherent to the carrying of passengers on public roads, there is an element of public good in testing the boundaries of public restrictions of competition. Whatever happens to Uber’s efforts to challenge rules impeding its ability to deliver certain categories of services in certain markets, the taxi industry has already changed for the better as many taxi companies have developed their own apps, either alone or with others, and efforts have been to improve their quality of service. Uber was a needed electroshock in an industry whose actors had often become complacent and failed to meet user expectations.
Keywords: Uber, online platforms, electronic marketplaces, two-sided markets, competition, taxi services, care-sharing services, transportation, regulation, regulatory barriers to entry
JEL Classification: H41, K23, K 21, K40, L51, L91
Suggested Citation: Suggested Citation