THE BLOG
02/10/2015 06:33 BST | Updated 01/10/2016 06:12 BST

Uber Is Innovative, Cheap and Safe: So Why the TfL Crackdown?

Ayn Rand's Objectivism is not everyone's cup of tea - it certainly isn't mine - and quite why Uber founder Travis Kalanick has previously chosen to align himself with the Russian philosopher's writings has not been entirely obvious. Until now.

In the best-selling novel Atlas Shrugged, Rand tried to show that the freedom of a society is responsible for its greatest achievements. In it, her fictional hero John Galt revolutionises an existing product - but when incumbents realise his discovery could threaten their way of life, they force the state to enforce crippling rules that will simultaneously stifle technological progress and hurt consumers.

For those who've read about Transport for London's leaked regulatory taxi hire proposals, Rand's 1950s dystopian novel about a future America will seem eerily familiar. It's bad enough that our government should want to regulate against the public interest and limit innovation to protect black cab drivers from competition from Uber and similar firms. But an article from Steve McNamara, General Secretary of the Licensed Taxi Drivers' Association (LTDA), from August 2015 darkens an already murky story.

In it, McNamara proposed a range of regulatory changes (which were "proposed by the trade in our response"). They were said to dictate (among others): a minimum five-minute period between booking and pick up; that operators must not show vehicles available for immediate hire - either visibly or virtually, via an app; that the fare must be specified at the time of booking; that drivers can only work for one operator at a time; no ride sharing; and that operators must record destinations at time of booking, and must offer a pre-booking facility - up to seven days.

These - published a month ago - are almost word-for-word what TfL is now proposing. Oh, and the LTDA has a seat on TfL's board. Can we really be surprised that commentators are (rightly - in my opinion) crying "regulatory capture"? Since regulators and the industries they oversee deal almost exclusively only with each other, author Larry Downes explains, they tend over time to develop a customer-provider relationship, in which both have a vested interest in continuing the regulatory system long after public interest benefits have been vastly outweighed by the anti-innovation costs. This is precisely what we're now seeing in the taxi industry.

Of course, some regulation in the industry is essential: we want drivers and their vehicles to be safe and insured; and we need some limits in place to avoid having so many vehicles for hire on our streets that no traffic can actually move. But nobody believes these proposals will benefit consumers. As the Adam Smith Institute's Charlotte Bowyer pointed out on Wednesday: "it's hard to see how a mandatory wait time between booking a vehicle and it arriving can provide any value or security to consumers". It only furnishes the "flag down" black cab trade with a competitive advantage. In addition, restrictions on the number of operators a driver can work for will only shackle hard-working, entrepreneurial drivers who combine shifts at traditional minicab companies with flexible and ad hoc hours with Uber. Ultimately, this will hurt passengers by reducing the supply of drivers.

And the government's policy has damaging implications for entrepreneurs in other industries - especially those which are already heavily regulated. Marco Bertozzi of VivaKisaid recently that we are witnessing the city of London "sending a message to the tech community that if you have a great tech that improves our lives but happens to disrupt what is an archaic system, then you are not welcome here." One entrepreneur, Madeline Parra of Twizoo, thinks it will "cause startups in regulated industries to proceed with more caution". She suggests that Uber represents a slew of similar startups, and that this clampdown may set a worrying precedent.

In short, TfL's proposals are anti-competition, anti-innovation and anti-entrepreneurship. Technological progress may seem inevitable, but history is testament to the fact that good or bad politics plays a huge role in a country's global competitiveness. Rand's native Russia, even today, is forcing successful entrepreneurs to give up their ventures at the same time as tightening its controls on the Internet. Lawmakers here in Britain rarely shy away from self-congratulation for our growing economy: it's time they stopped promoting policies that slow growth and hinder economic opportunity.