How Dispute Between Uber and Taxi Firms is Like Net Neutrality

By Gary Kim June 17, 2014

In some ways, the strike by European cab drivers protesting Uber, the mobile app-based transportation provider, resembles the net neutrality battle.

Each side believes it contributes to consumer welfare. There is a conflict between older and newer contestants in markets.

Regulation (licensing, operating rules) is seen as “fair” by one side, “unfair” by the other.

Both major providers (app providers and Internet access providers) are part of the ecosystem (Uber, taxis, owned and rented cars, bicycles, subways, motorcycles, walking).

And, unfair or not, the outcome directly affects operating cost, revenue and profit margins.

In that regard, it appears new net neutrality rules for mobile Internet access could be added when the U.S. Federal Communications Commission releases its new net neutrality rules, Reuter’s reports.

To use the Uber-taxi analogy, that would be like regulating taxis more than at present, not simply applying taxi regulation to Uber. The analogy is not perfect, since some might argue, reasonably, that the competition between Uber and taxi fleet owners is more like Google competing with Facebook.

Internet access providers are more analogous to suppliers of roads, in that sense. Imperfect analogies aside, real revenues are at stake.

So are regulatory concepts.

Taxi driver protests about Uber are about the way regulation should be conceived, says Neelie Kroes, European Commission VP.

“The old way of creating services and regulations around producers doesn’t work anymore,” says Kroes. “They must have a voice, but if you design systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.”

As sometimes is the case, precisely what that means is open to vastly-different interpretation.

Clearly, Kroes argues that “regulatory capture” is not a good thing. In other words, the stated purpose of all regulation--to enhance consumer welfare--should actually be the case.

One way of implementing such principles are rules that ensure legacy providers are not be able to block competition by new providers (de jure, or “by law”), even if de facto market considerations effectively block additional competitors because they cannot make a business case). 



Contributing Editor

SHARE THIS ARTICLE
Related Articles

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More

Making Connections - The Value of Data Correlation

By: Special Guest    1/5/2018

The app economy is upon us, and businesses of all stripes are moving to address it. In this age of digital transformation, businesses rely on applicat…

Read More