The FTC vs. the DC Taxi Cab Commission

The FTC recently released a letter supporting competition in the DC Taxicab industry:

[The FTC] staff respectfully suggests that DCTC carefully consider the potential direct and indirect impact of its proposed regulations on competition. We believe that unwarranted restrictions on competition should be avoided, and any restrictions on competition that are implemented should be no broader than necessary to address legitimate subjects of regulation, such as safety and consumer protection, and narrowly crafted to minimize any potential anticompetitive impact.

In response, taxi commission chair Ron Linton suggested that Uber had a hand in writing the FTC letter. Regulators can sometimes be captured but not by firms launched in 2010! FTC commissioner Joshua Wright (formerly a colleague at GMU law) responds in the Washington Post with a telling point:

Linton’s uninformed comment tells us more about the commission’s approach to regulation than about the FTC’s. According to The Post, Linton described the commission’s regulatory role to that of a referee of competing interest groups.

Indeed, what competing groups is Linton talking about? Might it be producers and consumers? And what does it mean to “referee” the competition between producers and consumers if not to raise prices and incumbent profits?

Comments

The language of the letter--"and any restrictions on competition that are implemented should be no broader than necessary to address legitimate subjects of regulation",--is standard antitrust language for limitations on competition created by legislation (called state action)--probably in this case a city ordnance--that restricts competition for some other purpose, which in this case, is probably controlling rates and or limiting the number of cabs driving on the streets. Cities have an interest in traffic congestion, compelling carriers to carry drunks, limiting and or disclosing rates, etc., and as the letter notes, such regulation should not limit competition more than necessary to achieve a legislated objective.

The operative language here is: "restrictions on competition that are implemented should be no broader than necessary to address legitimate subjects of regulation "

Ironically, when the federal government has in the past sought to limit the antitrust exemption (called state action), some on the right have argued that the application of the federal antitrust law limited states rights.

You saw this two years ago when some in Congress sought to repeal the antitrust exemption for insurance regulated by state law, and a majority of republicans opposed this effort to repeal an exemption for the insurance industry, arguing that state regulation protected consumers and application of the tighter standard here--that the restriction on competition be no broader than necessary--be applied.

Regulatory capture by a 3 year old company is unlikely, but they have been lobbying - both alone and in collaboration with other 'sharing economy' companies (see peers.org). They just raised a quarter of a billion dollars too, their pockets are deep enough.

this is hard to understand because I'm not familiar with 'Uber', or which side the DC Taxicab commission is on (is it the regulator or the industry group?).

I know Tyler likes to write in jargon, but I think this isn't one of his better qualities, and nothing to emulate.

Uber is a smartphone app that lets one arrange rides from cars which operate outside the rules set by the Taxi Commission. Taxi operators are not happy about it and want to see it should down. And the post was written by Alex, not Tyler.

Tyler didn't write this. Regardless, I also am left a little confused. Making it about twice as long with more context would have helped me. Glad you all get it.

He who has the gold makes the rules.

Not very many taxicab companies walk around with hundreds of millions of dollars. Uber does. This is regardless of the year of its birth.

And yet, see reality.

See reality?

This is one of those fascinating Internet companies. Because while I dislike the limited franchise aspect of taxis, I like the regulation that allows for tracking of taxis, accessible taxis, and formal places to register discrimination complaints.

Clearly we don't want a completely unregulated taxi industry. We can see people don't trust that or they'd be hitchhiking more.

I wish Uber was working harder to get regulations that leveled the playing field without destroying consumer protections, rather than completely blowing up the market.

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