I hate to be the one to tell you this but unfortunately Uber will have to be regulated almost out of existence. I’m a libertarian and I applaud any attempt to let market forces work their magic. The regulatory state is almost never as good a solution as the market for delivering goods and services that people want at competitive prices. But there are exceptions. There is an “almost” in the sentence above for a reason.

Consider a ferry boat. A new town is built by a river and an enterprising person builds a ferry to help people cross. The town grows, he starts to make some money, he gets busy, there is a line for his ferry, service deteriorates and so another person starts a second ferry. A price war ensues neither ferry can make money, service deteriorates and eventually the government has to step in to regulate or own the ferry to keep it running.

Taxis are like ferrys. If there are too many taxis prices collapse and eventually service goes bad.

None of this is to say that Uber hasn’t done an amazing thing combining smart phones, ride sharing, GPS Mapping, demand pricing and underutilized vehicles. And all of these improvements will be incorporated into the new model of the regulated taxi industry but it has to be regulated.

Sorry to give you the bad news.