In 2015 I wrote a blog post titled “Uber’s Greatest Trick Revealed” in which I argued that Uber’s success was the result of providing a transportation service. This was and is exactly what consumers wanted but is not a neutral platform or marketplace. It would appear that regulators have finally caught up with this with the European Union’s top court ruling yesterday that Uber is in fact a transportation service.
Now we will hopefully enter a new phase in which regulators figure out how to get consumers the benefits of on demand, app based dispatch, including the massive expansion of capacity, but still deal with issues such as safety, congestion, driver’s rights, etc. And yes some local regulators were and are captive to incumbent taxi companies but that doesn’t mean there are not enlightened ones to be found who will come up with the right rules that can then over time be emulated everywhere.
This has been the pattern of regulation for lots of innovation. Early in the history of cars, for instance, there were red flag laws aimed at preventing cars from going faster than horse drawn carriages. Ultimately though cars did not succeed against regulation but because of regulation. We only got to the benefits of individual transportation by having rules of the road and through government investment in roads.
The same will be true for autonomous vehicles and on demand hailing services. They will ultimately be successful *because* of regulation.
