Monday, August 24, 2015

Learning Economics Through Pictures - Uber and Ride-Share restrictions. (Guest post)

This is a guest post by Courtney Conrad.  She is a junior economics major at Susquehanna University and has served as my research assistant since her freshman year. 

While I vacationed in Florida a few times this summer, I noticed new signage popping up all around Orlando International Airport (MCO). As I read the content on the signs, I couldn’t help but think of governmental interference in economic/consumer freedom. These signs, and the policies they promote, threaten fines and even arrest if ride services such as Uber, Lyft, etc. attempt to pick up passengers at MCO.

Being an economics major, I immediately realized the negative implications of such a policy – loss of freedom of choice for the consumer. Since passengers are restricted as to how they can pay to depart the airport, their consumer freedoms are ultimately hindered. With a loss of freedom of choice, and passengers only able to pay for a ride service from permitted ground transportation, this causes a negative ripple effect for people interested in working for ride share operators. If Uber, for example, is limited in the locations they are allowed to offer their service, they will not need to hire drivers to accommodate those “off limits” areas – thus, potential/current Uber drivers’ chances of making a living are potentially stunted due to Uber needing less drivers.

Furthermore, to the naked eye, travelers reading this sign will think MCO has their passengers’ safety and well-being in mind through this action. Admittedly, this is the true case to some extent; but, there are more predominant agendas behind-the-scenes here. The airport claims to have passengers’ safety as their top priority -- however, restricting competition is of the same prioritization and importance (if not more) to MCO in this instance. By infringing on consumer freedoms and limiting airport departure transportation, ground transportation with a permit can charge very expensively for their service(s). The permitted transportation knowingly charges such a high amount since they realize that they are the passengers’ only option and the passengers are practically forced to pay the designated price due to no other ground transport options. Also, by cutting off ride share operators in the area around MCO, the airport profits from the (costly) permitted ground transportation they are associated with and does not lose out to Uber, Lyft, etc. With the benefits MCO and permitted transportation gain while forbidding ride share operators, safety seems far from the main reason for the restriction.

So, to the typical passerby in Orlando International Airport, this sign simply lets them know that their mobile Uber app will not be allowed/applicable in the area. However, to the passionate economics major passing through, this sign does not just mean consumers are losing out on using an app – but freedom, too. 

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