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systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.”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

Four Reasons to Reach for the Cloud after World Earth Day

By: Special Guest    4/23/2018

The World Earth Day agenda offers a chance to flip the rationale for cloud adoption and highlight environmental benefits that the technology brings pr…

Read More

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More