A PYMNTS Company

Whither Uber?: Competitive Dynamics in Transportation Networks

By  |  March 20, 2016

Benjamin Edelman, March 20, 2016

Transportation Network Companies offer notable service advances—but do they comply with the law? I offer evidence of some important shortfalls, then consider how the legal system might appropriately respond. Though it is tempting to forgive many violations in light of the companies’ benefits, I offer a cautionary assessment. For one, I note the incentives that might result, including a race-to-the-bottom as a series of companies forego all manner of requirements. Furthermore, the firms that best compete in such an environment are likely to be those that build a corporate culture of ignoring laws, a diagnosis that finds support in numerous controversial Uber practices. On the whole, I suggest evenhanded enforcement of applicable laws, with thoughtful changes implemented with appropriate formality, but no automatic free pass for the platforms that have recently framed laws and regulations as suggestions rather than requirements.

 

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