Jim Clark: The saga of Uber and its future in Nevada
Special to the Bonanza
Moderate Republicans, Tea Party Republicans, Libertarian Republicans and their like-minded conservative think tanks all have their differences, but since 1861, when Abraham Lincoln became the first Republican President, they have all concurred in one principle … capitalism is king and free markets are what made (and continue to make) America the greatest nation in the world.
This principle has persisted to date, possibly because until now there has not been a reality check for lack of a real life example. Agriculture, the ancient and traditional example of perfect competition, is hamstrung with government interference.
Farm subsidies, milk price supports, price controls and government purchases of corn for ethanol, etc. have muddied the former Darwinian market for agricultural products. Success is no longer premised on what you know but on who you know as politics roils the markets.
But wait. Technology has given birth to what may be the only instance of perfect competition since fields were tilled with horse drawn ploughs.
That brainchild is Uber, a ride-sharing application consumers operate through their smart phones to order transportation for hire. Requests for rides are transmitted by Uber to a private party under contract to Uber and closest to the person calling for a ride. Cheap, clean and efficient.
Uber has competition in the form of Lyft, owner of a similar technology, but the most strident objections to Uber are taxicab companies. Since Uber opened up in liberal-, Democrat-, union-dominated San Francisco 15 months ago, taxi demand has fallen by 65 percent.
No surprise then when Uber opened for business in Reno and Las Vegas last October, taxi company owners cringed. What to do when competition rears its ugly head? Call in your chits with influential politicians and get the threat eliminated.
Indeed, Nevada’s Democrat Attorney General, Catherine Cortez Masto, tripped all over herself to file in Washoe, Clark and Carson counties for temporary restraining orders against Uber doing business in Nevada.
The Clark County court declined to enjoin Uber, while the Washoe and Carson courts were inclined to crush the competitive threat.
There is a rule in jurisprudence that you only get one bite of the apple so you can’t file in three different courts. The matter therefore went to the Nevada Supreme Court, which decided that the Washoe County judge had jurisdiction.
Reno Judge Scott Freeman granted the restraining order, so the matter is in limbo as the warring parties ready themselves for trial. Meanwhile, the Reno City Council unanimously passed a resolution approving Uber’s potential contribution to public transportation efficiencies.
Uber is already operating in over 200 cities and its stock value is over $17 billion, so this squabble is not going away any time soon. Moreover, Democrat AG Masto is being replaced by Republican Adam Laxalt, so we may soon see if the “immutable dedication to free markets which binds all Republicans” can survive a dose of reality.
There is no question that Nevada has a comprehensive legislative and regulatory scheme governing taxicab operations. Uber contends it is not subject to the scheme because it is a technology company; it sells applications and individual drivers, and passengers contract with each other after their high tech introduction.
We will see what the courts do with this, but it seems to me that if Uber is held to be a public transportation company, the ruling could spill over to carpooling, hitchhiking, grand marshals of parades, etc.
With newly elected Republican majorities controlling both the Nevada Assembly and Senate, a newly reelected Republican governor in the statehouse and the legislative session scheduled to begin in a little over two months, will Uber be lobbying GOP legislators to amend the law to exclude technology providers from the definition of common carrier?
Will taxicab companies be lobbying for their inclusion? It would be cheaper and more certain than going to trial so you can bet on it. Will GOP dedication to principles of free market competition survive this reality show?
Don’t bet on it.
Jim Clark is president of Republican Advocates. He has served on the Washoe County and Nevada GOP Central Committees. He can be reached at email@example.com.
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