We have seen the future, and it sucks.

Taxing and Regulating the Competition

18th October 2017

The Antiplanner blows the whistle.

Here’s a difference between government-run businesses and private businesses: when private businesses face competition, they are forced to innovate to survive. When government-run businesses face competition, they can regulate or tax their competitors out of business.

Now consider the Chicago Transit Authority, which has lost riders in every year since 2012, partly if not mostly because of the growth of Uber and Lyft. Ridesharing has also reduced car rentals (which are taxed by the city) and downtown parking (which is taxes by the city). Although Uber and Lyft also pay taxes to the city, the city estimates it lost a net of $40 million in revenues (including transit fares and vehicle taxes) in 2016. So Chicago Mayor Rahm Emanuel wants to increase taxes on Uber and Lyft to make up the difference.

Meanwhile, in San Francisco, Ford subsidiary Chariot is running buses in competition with publicly subsidized Muni. This has led to demands that the city “regulate Chariot to save public transit.” The term public in public transit doesn’t refer to ownership; it refers to transport that is available to all of the public. So what they really mean is “regulate privately owned transit to save publicly subsidized transit” because, for some reason, subsidized transit deserves to be “saved” from private competition.

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