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Uber’s Next Challenge: Avoid Its Own Regulatory Capture



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Per the New York Times:

Uber wants your vote of support. And it has hired a campaign manager to win you over.

Uber, a fast-growing start-up that promotes private car sharing, announced on Tuesday that it had hired the political strategist David Plouffe to be its senior vice president of policy and strategy. The move further signaled the grand aspirations of companies like Uber, which are challenging entrenched industries and running into resistance from some local governments.

Mr. Plouffe, who ran President Obama’s 2008 campaign, said he planned to run Uber’s communication efforts much like a political race, pushing to woo consumers and regulators alike in the company’s fast-paced expansion across the world.

That David Plouffe has so seamlessly moved from working for the man who runs the federal Leviathan to lobbying against the excesses of big government is grotesque in and of itself, providing us with yet another example of what happens when you permit the state to seep into nooks and crannies in which it does not belong. Overall, it is difficult not to regard these developments as being illustrative of an ugly and corrupt system in which only those with powerful and well-connected friends or representatives can get on. Uber is a fabulous company with a radical and worthy idea. In a truly free market, it would be able to thrive on its own merits, standing or falling by virtue of its decisions and not by its capacity to engage the services of somebody in the know. I am sure that David Plouffe is good at his job. But that he is needed her at all is symptomatic of a problem.

Given the size of the government and the power of the entrenched interests, Uber probably had little choice but to play this game. Nevertheless, it should be keenly aware that to wade into the swamp is invariably to get dirty. Of late there has been a great outpouring of support for the company, not only from the young people who use it and who simply cannot understand why their local governments have been so hostile, but from a Republican party that has sought to turn the outfit into a salutary warning against excessive regulation and to celebrate it as a totem of American commercial ingenuity. For now at least, these forces are coming together to clear the way for the company’s success — a worthy endeavor if there ever was one. And yet one cannot help but wonder what will happen next? There is a significant difference between fighting for a genuinely free market within which a company such as Uber can operate unmolested, and fighting for Uber per se. Experience tells us that it can be tough for companies and those who lionize them to grasp this in the long term. The reasons that Uber’s established competitors have given as to why they should not be challenged are transparent and self-serving — “safety” has been the rallying cry of the monopolist since the first days of the Interstate Commerce Commission. But there is nothing inherently different about Uber that will prevent it from giving into the very same temptations once it has developed its own grip on the market. Once a business has created a team whose sole role is to lobby the government on its behalf, it can be extraordinarily difficult for that team to remain pure in its behavior.

David Plouffe will probably not stay for too long. But, having been afforded the access that Plouffe’s paycheck will allow, the company’s lobbying arm is likely here to stay for good. Will that arm welcome newcomers to the market when they start to undercut their own interests? Or will it, together with the political opportunists who are currently lining up to align their political fortunes to the company, seek to protects its position by any means necessary? I don’t know what will be the next innovation in ground transportation, and I wouldn’t like to hazard a guess. I do know, however, that there is a reasonable possibility that, by the time that it bursts onto the scene, some of those expressing skepticism may do so under the letterheads of today’s most radical innovators. There will always be work for the Plouffes of this world.



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