“It is an axiom of modern American life: Offer a new service that is wildly popular with the public, and sooner or later you will find yourself labeled an enemy of the people…

…Though she didn’t mention Uber by name, the Democratic Party’s leading contender for the 2016 presidential nomination fretted that while the “gig economy” may be “exciting” and “unleashing innovation,” “it is also raising hard questions about workplace protections and what a good job will look like in the future.” Hard questions that Mrs. Clinton no doubt intends the government to answer, even if those answers end up making Uber and others like it less exciting and less innovative…..Perhaps even more important, innovation by its nature challenges the inner-Elizabeth Warren in so much of today’s Democratic Party. However open Democrats may be to revolutionary new definitions of marriage, the thought that there might be some nonsexual for-profit contracts between consenting adults keeps progressives up at night. So when a business like Uber’s prospers because its model doesn’t quite fit the established regulatory categories, the Democratic response is almost always to try to pound these new square pegs into the government’s old round holes. It’s not just the sharing economy, either. From charter schools to finance to the Internet, the dominant Democratic impulse is to tax or regulate—or, in an ideal world, both.

The ironies run deep. The Uber driver who ferried Jeb Bush around San Francisco said the former Florida governor was a nice chap but added that he still planned to vote for Mrs. Clinton—the candidate who regards the innovations that has led to the creation of his job as a problem that government needs to solve.”, William McGurn, “Uber Crashes the Democratic Party”, The Wall Street Journal, July 21, 2015

Opinion

Uber Crashes the Democratic Party

The ride-share app is bringing out the inner Elizabeth Warren.

Photo: Bloomberg News

By William McGurn

It is an axiom of modern American life: Offer a new service that is wildly popular with the public, and sooner or later you will find yourself labeled an enemy of the people.

The latest target is Uber, the app-based ride-sharing service that since its launch in San Francisco just five years ago has expanded to more than 300 cities across the globe. Here in New York, Uber is now locked in combat with the city’s progressive mayor, Bill de Blasio. In a Sunday op-ed for the Daily News, Mr. de Blasio said he aims to freeze Uber’s expansion until his regulators can figure out how best to block any attempts to “skirt vital protections and oversight.”

The mayor’s call to arms comes only days after Hillary Clinton used her big speech on economics to sound a similarly dismal note. Though she didn’t mention Uber by name, the Democratic Party’s leading contender for the 2016 presidential nomination fretted that while the “gig economy” may be “exciting” and “unleashing innovation,” “it is also raising hard questions about workplace protections and what a good job will look like in the future.”

Hard questions that Mrs. Clinton no doubt intends the government to answer, even if those answers end up making Uber and others like it less exciting and less innovative.

Republican presidential candidates are having fun with all this. Marco Rubio, who last year sided with Uber over regulators in Miami, accused Mrs. Clinton of trying to “regulate 21st-century industries with 20th-century ideas.” Jeb Bush pointedly traveled by Uber for his visit to Thumbtack, a Silicon Valley startup. Meanwhile, Rand Paul says he would like our government to adopt the Uber model—more information and customer ratings—while Ted Cruz says his campaign will be as disruptive of politics-as-usual as Uber is of old business models.

To Uber’s credit, the company is not backing down from the political offensive. In a clever jab at Mrs. Clinton (who has been invoking her status as a new grandmother), the company issued a news release touting how it is helping “aging Americans” get around. It also has launched a multimillion-dollar TV ad campaign against Mr. de Blasio’s plan and even courted the Rev. Al Sharpton by making the case that Uber has done a good job bringing car service to previously underserved minority neighborhoods.

However these battles end, the attacks it faces are no accident. They have two chief causes: First, innovative new business models always threaten traditional constituencies, and many of these are Democratic. In New York, for example, Airbnb may be even more disruptive than Uber, because by providing a way for apartment dwellers to make some money by renting out their homes, it is also enabling visitors to make an end run around the high taxes and labor costs (think hotel unions) that help make a hotel room in the Big Apple so pricey.

Perhaps even more important, innovation by its nature challenges the inner-Elizabeth Warren in so much of today’s Democratic Party. However open Democrats may be to revolutionary new definitions of marriage, the thought that there might be some nonsexual for-profit contracts between consenting adults keeps progressives up at night. So when a business like Uber’s prospers because its model doesn’t quite fit the established regulatory categories, the Democratic response is almost always to try to pound these new square pegs into the government’s old round holes.

It’s not just the sharing economy, either. From charter schools to finance to the Internet, the dominant Democratic impulse is to tax or regulate—or, in an ideal world, both. True, there is no shortage of lunk-headed Republicans who favor more regulation, including those who would side with regulators over Uber.

But consider this. In October, author Steven Hill will publish a book called “Raw Deal: How the ‘Uber Economy’ and Naked Capitalism Are Screwing American Workers.” At the political conventions next summer, which party’s attendees will be most likely to have read that book?

The ironies run deep. The Uber driver who ferried Jeb Bush around San Francisco said the former Florida governor was a nice chap but added that he still planned to vote for Mrs. Clinton—the candidate who regards the innovations that has led to the creation of his job as a problem that government needs to solve.

But is Uber co-founder Travis Kalanick any different? Even as he struggles with regulators taking aim at his business model, Mr. Kalanick has spoken up in favor of ObamaCare. During a visit to New York last November, he enthused that ObamaCare was “huge” for companies like his, on the grounds that the individual market has democratized benefits such as health care.

That’s true insofar as it means he doesn’t have to provide it for his drivers. But the reality is that ObamaCare is to health what taxi commissions are to transportation. And if Uber’s co-founder can’t see the difference, maybe he deserves the Bill de Blasios and Hillary Clintons coming after him.

Posted on July 22, 2015, in Postings. Bookmark the permalink. Leave a comment.

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