Hacker News Reader

Comment by jeffyee | Hacker News Reader

Is Uber more disruptive because of its experience or the fact that it technically violates the rules/regulations in the taxi cab market? Cabs can't compete on price because, the prices are regulated and fixed, and of the cost of medallions and compliance etc are non-zero. Similar remarks for the hotel industry and AirBnB.

Can this/should this be done in other markets? If someone built an equity crowdfunding platform that ignores SEC rules (and the JOBS act) but investors like it/use it, would it succeed? In the cases of Aereo and Silkroad, they didn't succeed in fighting the laws.

The rules and regulations exist ostensibly to "protect" consumers, but we see that when consumers don't agree with them, huge companies get created.

View on HN

Let's split up the questions and look at them one by one:

Is Uber disruptive? Probably in some places.

Why? Because some free market-liberal cooked up a way to cap the number of available taxis. Ubers skirts these restrictions by loudly proclaiming not to be taxis in various creative ways, thereby lowering their price structure.

How could this be done in other markets? Definitions matter. Could you raise funding by callling it something else? Very unlikely (it's hard to deny why people send you money). Could you sell useless medicine by calling it something else? Very likely (see "homeopathy", "natural medicine").

I think that there is a difference between rules intended to protect consumers and those designed to protect incumbency. In many cases, such as taxi medallions and other types of business licensing, what once was designed to be a light weight way to protect the public because cumbersome and anti-competitive. These are the areas ripe for disruption.

However, regulations that still predominantly serve the public interest, such as those set out by the EPA, FDA and SEC (though not perfect) are much less open.

The rules in the AirBnB world make a lot more sense than for Uber. While homeowners should have some minimal ability to rent out their abodes, there are good reasons why it should be limited to less than a full-time business.

For Uber, I still haven't heard a decent articulation of the need for such rules as is seen in the taxi business.

My understanding is this... In New york, you hail a cab, and you call a car/limo service. Uber operates legally as a car service. The cab companies are upset because uber is faster, whereas car service typically require a long wait time.

right?

Reply on news.ycombinator.com