Legal Archives - The Big Picture

Disrupting the Disruptors

As big tech becomes an increasingly important part of our daily lives, it is crucial that we allow innovation to flourish. This means making sure that competition is alive and well in America.

Sometimes, companies engage in nefarious activities to thwart that competition; occasionally, the hardball tactics backfire.

Case in point: Austin Texas’ battle with ride sharing services Uber and Lyft. This specific case study, via boingboing‘s Cory Doctorow, is absolutely fascinating:

“In 2016, the City of Austin played a game of high-stakes chicken with Uber and Lyft. Austin cab drivers have to get fingerprinted as part of a criminal records check, and Austin wanted Uber and Lyft drivers to go through the same process.

Uber and Lyft violently objected to this. They said it would add a needless barrier to entry that would depress the supply of drivers, and privately, they confessed their fear that giving in to any regulation, anywhere, would open the door to regulation everywhere. They wanted to establish a reputation for being such dirty fighters that no city would even try to put rules on them.

Austin wasn’t intimidated. They enacted the rule, and Uber and Lyft simply exited the city, leaving Austin without any rideshare at all. All the drivers and passengers who’d come to rely on Lyft and Uber were out of luck.

But the drivers were undaunted. They formed a co-operative and in months, they had cloned the Uber app and launched a new business called Ride Austin, which is exactly like Uber: literally the same drivers, driving the same cars, and charging the same prices. But it’s also completely different from Uber: the drivers own this company through a worker-owned co-op. They take home 25% more per ride than they made when they were driving for Uber. Uber and Lyft drivers commute into Austin from as far away as San Antonio just to drive for Ride. That’s how much better driving for a worker co-op is.”

The takeaway here is that the wall of technology monopolies — especially Professor Galloway’s big four of Amazon, Google, Apple, and Facebook — can be breached with a little push. Sometimes the lack of competition problem needs a little helping hand from outside forces — in some cases it s regulatory enforcement; historically, it has been from the nice folks working int he Justice Department’s Anti-Trust division.