Lucky and Good is available on Amazon at http://www.amazon.com/dp/B00EUN8J5Q Featuring the posts of Jerry White
Monday, June 9, 2014
Virginia fighting on behalf of incumbent taxi companies to limit competition
Well I guess I should have seen this comin'...oh wait, I did and I have written about it several times here at Lucky and Good.
What is it you ask? Ok I will tell you. The DMV of Virginia has sent out cease and desist letters to the ride sharing companies Uber and Lyft urging them to stop doing business in the State.
Accordingly the Virginia DMV has already fined Uber $26,000 and Lyft $9,000 because Virginia law requires "for-hire passenger carriers to have proper operating authority,” and their business model — a model which allows passengers to conveniently look up driver ratings and connect with a part-time driver of their choice via smart phone mobile apps - doesn't fit the bill.
The DMV Commissioner has suggested that the two companies should “focus (their) resources on participation in a DMV study rather than continue illegal operations in the meantime,” .
Now why is the DMV bringing down the power of the State of Virginia on these two companies? Well, it turns out that a number of transportation companies [including taxis] have contacted the DMV to complain.
OK, here is your economic lesson for today. Privileged existing firms will, if possible, stifle innovation which may cut into their profit margin. They will use the power of the government to limit consumer choice by making it more difficult and expensive for new companies, entrepreneurs and/or innovators to provide higher quality services at a lower cost.
Of course the DMV is telling everyone that it is looking out for the best interest and safety of all consumers and the DMV has put out a notice that is warning the public to research any ride service before using it. And the way to do research is by looking at the DMV's website that list DMV approved companies. Guess which two companies are not on the list?