A Free Economics Lesson for London Ontario Councillor Bill Armstrong, about Uber

Lee Friday – February 11, 2018

It seems a few people are annoyed, frustrated, and downright angry about Uber’s successful penetration of London’s vehicle-for-hire market. The London Free Press (LFP) reported that “Statistics on trips between April and Sept. 2017 show Uber accounted for 41 per cent of rides, while taxis delivered 48 per cent.”

From the LFP (here and here):

Taxi drivers and operators insist that’s always been their prediction, claiming council all but obliterated their work and livelihoods by allowing Uber to operate in London.

“They destroyed an industry, bottom line, that’s what happened. There are people in this community that are hurting,” said Roger Caranci, spokesperson for the London Taxi Association.

Coun. Bill Armstrong slammed his colleagues for the decision to allow companies such as Uber to operate legally under the city’s “vehicle for hire bylaw,” arguing the move has left taxi drivers struggling to make a living.

Too bad. The government should not be picking winners and losers in the marketplace. By what moral logic does councillor Armstrong support a taxi driver, but not an Uber driver, both of whom are trying to “make a living?” Likewise, Caranci says the taxi industry may consider a “legal challenge.” Thus, as with Armstrong, it appears Caranci wants to alleviate his concern about taxi drivers who “are hurting” by re-establishing the previous monopoly, thereby transferring the “hurt” to Uber drivers.

Let Consumers Decide

In an unhampered market, by virtue of their decisions to voluntarily buy, or not buy, the various products and services which are offered, consumers pick the winners and losers. When the politically imposed (thus coercively imposed) taxi monopoly was loosened, the free market was strengthened, and consumers flocked to Uber. Clearly, many consumers have expressed a preference for the prices and service offered by Uber.

Politicians such as Armstrong pontificate about the supposed benefits of regulations they force upon the public, while ignoring the repercussions. When the government coercively interferes with the voluntary decisions of market participants, it overrules the decisions of consumers by favouring some groups at the expense of other groups, resulting in severe economic consequences for 99% of the population. This is reflected in higher prices for goods and services, as well as significantly reduced opportunities to earn income.

Armstrong, Caranci, and others of their ilk, complain loudly about the harm which free competition imposes on taxi drivers. They dream about transferring this “harm” to Uber drivers by recreating the previous monopoly, but remain silent about the harm this would impose on consumers. These busybodies salivate over a coercive monopoly to benefit taxi drivers who (cue the tears) are “struggling to make a living.” But such a monopoly simultaneously reduces the living standards of consumers and Uber drivers.


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