MY LAST NERVE: Why No Jobs Announcement for Uber?

July 25, 2014

Inside Insight

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uberDO JOBS COUNT IF POLITICIANS CAN’T TAKE CREDIT FOR THEM?

Usually when a business decides to open or expand in South Carolina we’re inundated with emails, tweets, and Facebook updates from the governor, the Commerce Department, and/or some other politician taking credit for creating jobs. There’s an entire campaign within the Department of Commerce that promotes how “Just Right” South Carolina is for everything: “From our picturesque coast to our breathtaking Blue Ridge Mountains – and from our small towns to our big cities and big businesses – there’s something about the Palmetto State that makes it just right for people from all walks of life and for companies of all kinds and sizes.”

But, apparently there is actually a business South Carolina isn’t “just right” for, a popular and widely publicized company bringing jobs that, curiously enough, very few politicians are clamoring to take credit for. The company is Uber, a ride-sharing service that’s thought to be taking business from traditional taxi cabs. Since its announcement on July 10, police and regulators have targeted the company and drivers who offer services through the Uber app.

One would think an administration so focused on “job creation” as the current one claims to be would support a business that encourages the entrepreneurial spirit in people. Uber gives drivers “the power to manage [their] own schedule,” offer rides when available, and “go offline” when they’re not, according to their website.

Somehow, though, the administration’s said nothing about Uber. Rather, the Office of Regulatory Staff issued a memo discouraging citizens from using the ride-sharing app because Uber vehicles and their drivers had not been properly inspected and licensed by the agency in the way traditional taxi cabs and their drivers are. It’s not that Uber drivers are doing anything intrinsically wrong or harmful to consumers. In fact, there’s every reason to believe ride-sharing services like Uber aren’t so much competing against traditional taxi services (observation suggests many people who use Uber do not use traditional taxi cabs) as expanding the market for transportation services. In the process they’re helping to cut down on metropolitan traffic. Surely we’re talking about a business that politicians can champion?

Apparently not. Government officials would rather protect the existing industry, cut off workers from potential jobs, and keep consumers from accessing choices that might actually be helpful and affordable.

Barriers to entry in any industry keep competition down and allow one or a few companies to monopolize that industry. Rather than embrace innovative technology that offers options in the ride-sharing industry, regulators want to force Uber into the same burdensome regulations taxicab drivers must adhere to.

Of course, the state could use Uber’s arrival in South Carolina as an opportunity to review industry regulations that most observers agree are outdated. More competition always leads to better service and expanded economic activity.

Don’t count on it, though. If politicians can’t take credit for bringing a company to the state, that company can expect an uphill battle just to stay here. No press conferences, no “jobs created” press releases? Well then don’t expect much in the way of fairness.

Jamie Murguia is Research Director at the S.C. Policy Council, The Nerve’s parent organization.