Here’s a difference between government-run businesses and private businesses: when private businesses face competition, they are forced to innovate to survive. When government-run businesses face competition, they can regulate or tax their competitors out of business.
Blackberry was once the dominant smart phone. Then came the iPhone, which reduced Blackberry subscribers from 85 million to 23 million in just 18 months. In 2016, Blackberry stopped designing phones. But that doesn’t mean it is out of business; instead, it is doing other things like designing driverless-car software.
Now consider the Chicago Transit Authority, which has lost riders in every year since 2012, partly if not mostly because of the growth of Uber and Lyft. Ridesharing has also reduced car rentals (which are taxed by the city) and downtown parking (which is taxes by the city). Although Uber and Lyft also pay taxes to the city, the city estimates it lost a net of $40 million in revenues (including transit fares and vehicle taxes) in 2016. So Chicago Mayor Rahm Emanuel wants to increase taxes on Uber and Lyft to make up the difference. Continue reading
