Why economic growth is so crap: the New York taxi cab app.
THERE’S two different ways to look at this economic growth thing. One is in the short term: all that Keynesian stuff about unemployment, fiscal stimulus and so on. And that’s fine as far as it goes, looking at the short term.
But in the long run it’s not about that at all. It’s about people inventing new ways to do things and then being able to set up and sell those new ways. The long run of economic growth is about technological development. And this is where the current system is failing:
Despite copious quantities of bickering between the New York City taxi commission and Uber (amongst others), it looks as if said entity is going to give this whole “21st century” thing a whirl. Skift is reporting that the commission voted just moments ago to allow a one-year trial of taxi-hailing apps, with seven members voting “yes” and two abstaining. It’s a huge, huge victory for apps like Lyft, Hailo and Uber, and it could very well set the stage for the first major leap in how the cab-hailing process works in a very long while.
We’re learning now that passengers using any e-hail app below 59th Street will “only be able to hail taxis within a half-mile radius of their location,” while cabs will be allowed to pick up e-hail passengers “within a mile and half radius everywhere else in the city.” Moreover, drivers must be able to accept trips with a single touch, and all payments have to be processed through a T-PEP provider.
Don’t worry too much about the details there. The underlying point is that these guys, Uber and the rest, have invented something very simple indeed: a new way of hailing a cab. And yet to get that out into the marketplace they’ve got to jump through however many hurdles of regulation, commissions and various cab companies desperately trying to stop them (for not all Uber drivers will in fact be licensed cabs).
Maybe regulation of how you hail a cab is good: maybe it isn’t. But those regulations most assuredly slow down the adoption of the new technology.
And this isn’t just about cabs. We’ve had, what is it, a year? delay on fracking in Lancashire as people argued over the regulations. As a little personal note an idea for a little business went by the wayside because it would have taken 18 months just to get the environmental permit.
We’re deliberately, through government, throttling economic growth given the layers of regulation that surround everything these days. It might even be a good idea that we’ve got all this regulation: but it most certainly has that cost, slower economic growth.