Tech Flexes Its Political Muscle

For more than a decade, I have experienced the very "First World" problem of not being able to find a yellow cab at 8 a.m. on the upper West Side of Manhattan or at 4 p.m. in midtown.
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For more than a decade, I have experienced the very "First World" problem of not being able to find a yellow cab at 8 a.m. on the upper West Side of Manhattan or at 4 p.m. in midtown.

In the morning, all the yellow cabs passed me by as I fretted over how I was going to make it on time to my 8:30 a.m. breakfast meeting because they were occupied by well-heeled New Yorkers. Supply could not meet demand.

In the afternoon, invariably between 4-5 p.m., I would stand in front of my office building and wait...and wait...as hordes of cabs whistled by with their "Off Duty" lights on. They were all headed back to their base at the end of "their shift."

I brought up this issue with the Taxi and Limousine commissioner: Why can't there be more cabs on the street during rush hour in the morning? Why can't shifts be staggered so that not everyone has their "Off Duty" lights on at a crucial time of the work day?

Shrugs. Sorry, there's nothing we can do, was the consistent reply. Frustrated and baffled, I vowed to leave more time for my commute and to always seek out public transportation during those tough taxi hours.

My bourgeois Manhattan-centric problem is much worse in the city's other boroughs, where yellow cab sightings are as rare as two-headed elephants.

And not surprisingly, in 2015, the once-monopolistic yellow cab industry is facing an existential threat from the "sharing economy," as tech behemoths like Uber have rapidly and elegantly filled the breach of this transportation problem.

Uber is now in 400 cities worldwide, but make no mistake, New York is its largest and most important market. Which is why it recently launched a thermonuclear counterattack when Mayor Bill de Blasio tried to cap its number of drivers through a very ill-conceived piece of legislation.

Why would the Mayor of the largest city in America try to limit customer choice and one of the biggest job-creating companies in the city?

Well, the official public stance was that the rapid expansion of Uber was causing traffic congestion. Really? In a huge place like New York, a few thousand cars (which presumably would make citizens less likely to drive their own vehicle) was going to jam the already clogged transportation arteries of Manhattan?

No, actually something much more self-serving was at play here: the Mayor has received hundreds of thousands of dollars of campaign donations from the taxicab industry and it was payback time.

But this attempted power play by the city's chief executive hit the buzz saw of lobbying, advertising and good old-fashioned politicking of a multibillion dollar tech company that plays to win - and almost always does. Uber is here to stay - just like the apartment-sharing tech company AirBnB - and any elected leader that decides to take it on, does so at their own risk.

What are the lessons from this? Well, first of all, that monopolies, even those propped up by the government, are exposed to creative destruction just like media, music, retailing and many other industries have learned the hard way. Also, that technology companies like Uber are just beginning to recognize their political power and this could also creatively disrupt politics as we know it. If you're the mayor and you mess with Uber, you get an app that is seen by hundreds of thousands of voters that blames you for their wait times for a car.

But the most important lesson is that the old-fashioned buying of candidates through huge campaign donations is not a sure bet to ensure success for your industry. Just ask the yellow medallion owners who are now seeing the value of their licensed assets plummet. And the Mayor, who let them down, because he was pummeled by a company that wasn't afraid to fight City Hall.

Tom Allon, the president of City & State, NY, is the former Liberal Party-backed candidate for mayor. Questions or comments: tallon@cityandstateny.com

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