UberCab update: Transitional Gains Trap sets in

Remember UberCab? Well, the taxi cartel has pushed back, predictably, to protect their rents.

Did Ubercab just crash and burn? Taxi and limo industry insiders in California today informed TechCrunch that the San Francisco Metro Transit Authority & the Public Utilities Commission of California have ordered the startup to cease and desist.

UPDATE: Since the orders arrived on October 20th, Ubercab has remained in service under threat of penalties including up to $5,000 fee per instance of Ubercab’s operation, and potentially 90 days in jail per each day the company remains in operation past the orders.

The Cartel's complaints?

Ubercab operates much like a cab company but does not have a taxi license.
Its cars don’t have insurance equivalent to taxis’ insurance.
Ubercab may threaten taxi dispatchers’ way of earning a living.
Limos in U.S. cities usually have to prebook an hour in advance, by law, while only licensed taxis can pick someone up right away but Ubercab picks people up right away (again without a taxi license).

I'd put 70% odds on this kind of thing in my prior post.

My final lecture in Intermediate Micro was on monopoly. I suggested that if we really care about getting rid of monopoly problems, one of the first things that government should be doing is to stop supporting monopolies and cartels that they've created through regulation. But that's unlikely to happen.

HT: Reason.