New York City Mayor Bill de Blasio’s decision to restrict new Uber and Lyft licenses is uber stupid.
Along with the city council, the mayor has just announced a one-year restriction on new ride-sharing licenses. He’s also established a committee to identify a minimum wage rate for ride-sharing drivers. The mayor says that these changes mean “more than 100,000 workers and their families will see an immediate benefit.”
It’s the height of dishonesty.
In reality, de Blasio’s actions encapsulate how liberals beholden to big unions do not serve the public interest. These changes will mean that riders seeking a cheap fare will have to wait longer to get that trip. After all, New York City’s already endemic congestion crisis means that the best way to get a ride quickly is to have a car nearby when you order one! But if new cars aren’t filling rider demand, then drivers will have to travel further and for longer before they can even pick up a ride and make money.
Of course, the yellow taxi companies and their big union representatives will benefit immediately here. They’re banking that riders won’t be willing to wait as long for a ride and so will be willing to pay more to get a more immediate taxi ride. And in de Blasio, these anti-capitalist agitators have found their hero. Where a congestion-focused mayor might have introduced a pricing system to tax travel in and out of the city’s busiest areas, de Blasio knows that would be fair in that it would hurt yellow cab drivers as much as ride sharing drivers. But fairness only matters to de Blasio on paper.
But New York City’s minimum wage for drivers is the most critical problem. Considering his penchant for minimum-wage delusions, de Blasio will likely mandate an hourly rate that has zero appreciation for market economy forces. At a minimum, a set wage for drivers will lead to double-digit increases in fare prices. Liberals say that this is moral policy, but it isn’t. It will mean that the vast majority of riders are giving more of their money away for the same service — actually, thanks to the licensing changes, a slower service! And there’s already a system in place to attract drivers to make more money on each fare: It’s called surge pricing and is based, unlike minimum-wage regulations, on the interchange of supply and demand.
None of this is to say that Uber and Lyft are perfect — they most certainly are not. Still, they do provide earning potential to drivers who would otherwise lack the means to pursue their dreams. They also provide us, the public, with a cheap means of getting around.
That speaks to something.
While de Blasio might claim these reforms will serve “100,000 workers and their families,” I would venture that they’ll actually hurt at least 1 million New Yorkers by forcing them to wait longer for more expensive trips. And with time, as the fares and minimum wages rise, more drivers will be priced out of the market. That speaks to what’s really going on here. The mayor and his “progressive” council have given New York City a regulatory gut punch veiled as a prize.
