Wednesday, July 9, 2014

Be down to get you in a taxi, Hindi

Russ Roberts and Mike Munger have an entertaining conversation about rent-seeking taxis v. rider seeking sharers. By coincidence, the BBC waxes not-so-nostalgic about the lamentable Ambassador;
The Ambassador was a symbol of all that was wrong with India's controlled economy and its stifling regulations. Carmakers could not increase prices or make more cars without the government's approval. They couldn't import technology or components and had to make do with locally developed bits and pieces that were shoddily produced.
Buyers were saddled with cars of appalling quality, which constantly broke down and yet the waiting list to buy one could stretch up to eight years!
Along with every motorist of my generation, I was at the receiving end.
You needed really strong triceps to work the ridiculously heavy steering, the deftness of a surgeon to slot home the spindly column shifter into each gear (shifting from second to third gear was an art form) and immense strength to make the car stop - you had to nearly stand on the brakes.
Eventually, in the early 1990s, India ran out of other people's patience and ended the license raj and people were free to choose what cars they wanted. Like people almost everywhere else in the developed world.

This same dynamic is now playing out all over the world with the ride-sharing companies Uber, Lyft and others. Just a different verse of the same old song.

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