The Straits Times says

Regulation keeps society in business

Uber's exit has caused an upturn in the taxi sector. This is good news for cabbies, but not necessarily so for passengers. Many of them would remember the pre-Uber era when cabbies ignored waving passengers breezily or used the shift change as a reason to pick up only those travelling in a certain direction. Spoiled by demand, many cabbies forgot the first law of supply: The customer comes first. It took ride-hailing firm Uber to shake up a complacent sector that was burdened not only with poor service but a confusing array of surcharges as well. In the best sense of that concept, Uber "disrupted" the taxi industry, turning its assumptions and practices upside down and empowering commuters in the process.

Unfortunately, Uber bailed out of the market after having disrupted it. Taxi drivers should not use the new normal to revert to bad practices. The larger point to note from this is that while competition generally is good for the consumer, even market players which have redefined the rules of the game do not always have the long-term interests of society in mind. They look for vulnerabilities in an existing business model - such as service standards and pricing - and attack the model at those weak points. That is a legitimate objective. But behind it lies a desire to maximise profits by eating into the earnings of existing players. The objective may not be to stay in the game long enough to alter it in the public interest.

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A version of this article appeared in the print edition of The Straits Times on June 23, 2018, with the headline 'Regulation keeps society in business'. Print Edition | Subscribe