Tzur (2019) Uber Regulation.
Tzur (2019) Uber Regulation.
Tzur (2019) Uber Regulation.
Regulation &
Regulation & Governance (2019)••,
Governance(2017) 13,••–••
340–361 doi:10.1111/rego.12170
doi:10.1111/rego.12170
Abstract
Can emerging technologies transform not only markets, but also foster new regulatory change mechanisms? In the context of
prevailing theories of regulatory change, this article explores the extent to which an interest-based explanation can account for the
regulatory responses toward emerging Transportation Network Companies (TNCs). Based on a primary cross-city analysis of the
40 largest cities in the United States, the study found that although the existence of ex ante interest groups indeed somewhat limited
the extent of ex post regulatory acceptance of TNCs, regulators seemed to prefer the newcomers over existing incumbents and
approved TNCs in 77.5 percent of the examined cities, rarely pursuing harsh enforcement even when TNCs operated illegally.
The research attempts to explain this intriguing phenomenon by extending the interest-based approach to account for the key role
played by “technological regulatory entrepreneurs.” The entrepreneurs bridged collective action barriers by becoming the central agent
that managed, and reaped the benefits of, the collective action, by lowering the organizational costs and by disseminating information
effectively and turning consumers into political campaigners, thus successfully promoting regulatory change.
Keywords: interest-based theory, regulatory change, technological regulatory entrepreneur, transportation network company, Uber.
1. Introduction
Uber, the online app that transformed the taxicab industry, drew inspiration for its name from Nietzsche’s vision of a
superior human being, Übermensch (Peterson 2014). The Übermensch, claimed Nietzsche, recognizes the obsoles-
cence of the old moral system, and seeks to destroy its social structures to make room for creative growth. Similarly,
Uber manifests innovation that seeks to radically alter the existing economic and social order by generating a new status
quo in the vehicle-for-hire market.
However, because the world of public policy typically involves winners and losers, the latter will try to defend their
turf and maintain their market advantage (Trebilcock 2014). In the United States (US) taxi market, regulators have
traditionally intervened to ensure several ends, yet de facto they typically restricted competition (Schaller 2007),
increased prices and waiting time (Frankena & Pautler 1984, pp. 80–97), and enabled taxi license owners to gain
supra-competitive profits (Moore & Balaker 2006). Regulatory policies commonly established equilibrium by which
the benefits of regulation are shared among a concentrated group of taxi license holders, whereas the costs of the
regulation are borne by the diffused public (Schaller 2007). The newcomers, Uber and other online Transportation
Network Companies (TNCs), were capable of using their improved technological capabilities to offer lower prices to
end-users (Rayle et al. 2014; Geradin 2015) and present a slick and innovative public image (Weise 2015). TNCs, there-
fore, threatened to dramatically change the entrenched social and economic equilibrium of the taxi industry. In pursu-
ance of expansion, however, TNCs first needed to overcome the hurdles posed by existing traditions, institutions, and
interests, and seek significant policy change to eliminate existing regulatory limitations.
The response of regulators to the ascendant TNCs varied, from overhauling existing regulations to accommodate
TNC operations, to maintaining the current regulatory regimes together with restrictive enforcement measures. Given
the technological improvements of the TNCs and the apparent consumer demand for their services, one might expect
that both the public and regulators would support regulatory change to accommodate TNCs under a favorable legal
regime (Moylan et al. 2014). On the other hand, where a forceful interest group of taxi drivers exists, one might just
Correspondence: Amit Tzur, The London School of Economics and Political Science, Houghton St., WC2A 2AE, UK.
Email: amit.tzur@alumni.lse.ac.uk
Accepted for publication 10 July 2017.
© 2017 John
© 2017 John Wiley
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SonsAustralia,
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as easily expect that regulators would support the incumbents by banning the TNCs and pursuing strict enforcement
(Stigler 1971). In fact, in virtually all cities, TNCs were de facto illegal when launched. As the focus of the present study
is regulatory change, the empirical analysis compares the degree of change between the ex ante regulation when TNCs
launched, to the ex post regulatory framework adopted following TNCs’ operation in the market. The analysis focuses
on an interest based approach, and therefore both ex ante and ex post regulation are evaluated based on their implica-
tions on the two main interest groups in the market, taxi license holders and TNCs, in order to measure the extent of
regulatory change in each of the 40 largest US cities.
From any standpoint, the change in the vehicle-for-hire market setting resulted in the triumph of Uber. The
emergence of stark differences between regulatory responses across the US and elsewhere leaves us with the question:
What factors supported or hindered regulatory changes across the US, and how can we explain the apparent widespread
regulatory change that seemed to harm a well-established, concentrated interest group?
Because most regulatory change theories have yet to be fully examined empirically (Black & Lodge 2005), especially
in the context of emerging technologies (Yeung & Brownsword 2008) and the sharing economy (Ranchordas 2015),
there seems to be room for an empirical analysis of the explanatory power of regulatory change theories in the context
of new technologies in the transportation market. Indeed, the analysis will find that TNCs relied heavily on their tech-
nological capabilities to promote regulatory change, inter alia by mobilizing consumers to participate in lobbying
through the TNCs’ apps. This analysis thus provides a novel empirical examination of the ways that technological reg-
ulatory entrepreneurs can promote regulatory change.
The article proceeds as follows. The next section discusses the meaning of regulatory change and the theoretical
explanations of such change. The subsequent section describes the pre-existing status quo in the taxi market by
discussing the history and justifications of vehicle-for-hire regulation in the US. I then proceed to draw four
interest-based hypotheses, and explain their theoretical grounding. Building on these hypotheses, I explain how the
concept of regulatory change is operationalized and measured, and introduce the examined factors, aggregated into
a singular “grade,” which stands for the extent of regulatory change in the 40 largest US cities. Afterwards, I present
the findings that demonstrate both that ex ante regulatory protection in the taxi market limited the extent of ex post
regulatory change to accommodate TNCs, and also that widespread regulatory change was the predominant regulatory
strategy chosen, even in cities that previously had a strong and entrenched lobby of taxi drivers. Understanding such
overall wide regulatory change, I argue, requires widening the narrow and “static” interest-based approach to take into
account the changes in market settings caused by the emergence of new technologies, and the way that technology
entrepreneurs managed to leverage their technological capabilities to reduce the barriers for collective action and influ-
ence the public and policymakers to support regulatory change.
2. Regulatory change
In order to discuss regulatory change, it is first necessary to determine what constitutes regulatory change for our pur-
poses. It should be noted from the outset that there are different ways of defining regulatory change, and that they are
often closely linked to approaches to evaluating regulation in general (Hood 1994; Black & Lodge 2005). For the pur-
poses of this analysis, it is sufficient to adopt Black and Lodge (2005, p. 4) definition of regulatory change as a new reg-
ulatory solution for an old or new “problem.”
The assumption in this study is that the reasons for how and why regulatory change occurs can be derived
from different theoretical frameworks (Hood 1994, pp. 1–18). More specifically, there is a limit to the influence
of a single organization or actor on topics with high political and media salience (Black & Lodge 2005), such as
TNC regulation. This analysis will focus on interest-based explanations of policy change, while also acknowledging
the limitations of single theories (Black & Lodge 2005). To that end, it is necessary to describe the main theoretical
explanations for regulatory change, as well as their limitations, starting with the “old-fashioned” (i) functional ap-
proach, then focusing on the (ii) interest-based approach, and finally briefly discussing the (iii) institutional and (iv)
“power-of-ideas” approaches.
According to the functional approach, external forces, often related to technological innovation, can change the
dispersion of interests and social structure of society and lead to regulatory change (Hood 1994, pp. 10–13). TNCs,
in that context, represent a stark example of a technological and societal change that might necessitate regulatory
change (Rogers 2015). However, adopting a “technocratic,” public interest approach to regulatory change is not
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compatible with both common political science and economics assumptions, and has time and again been empirically
refuted (Eisner 2000).
An interest-based approach provides not only a greater scope for analysis, but also seems more capable than
other theories to explain a rapid and global regulatory change (Rogers 2015) that nonetheless has clear inter-city
and inter-country variations (Griswold 2014). In the 1950s and onwards, public choice theorists argued that regu-
lators should serve their regulatees, either at some point of time (Bernstein 1955), or from their initial “original sin”
establishment (Stigler 1971). According to succeeding Chicago-School theorists, concentrated interest groups have
shared interests, lower organizational costs, and greater ability to exclude “free riders” than the “rationally-ignorant”
diffused public, and therefore they are better positioned to influence policymakers. The concentrated interest groups
pursue “rent-seeking” activities by lobbying policymakers, who are similarly considered self-interested, profit-
maximizing actors. Policymakers, therefore, look to extract benefits from any regulatory change by “selling” legisla-
tive protection to the highest bidder (Peltzman 1976). The Chicago-School public choice theory was empirically
examined and refined by later scholars, who explored different circumstances that facilitate “regulatory capture”
(Hood 1994). Wilson (1980) focused on the way that benefits and costs are borne across society, arguing that public
choice theorists have traditionally focused merely on “Client Politics” cases where benefits are concentrated and the
costs are dispersed. Wilson suggested that regulatory change can be pursued if a Political Entrepreneur would rally
the public and shift the costs to concentrated business groups and the benefits to the wider public, thus cropping
great political gains (see Table 1).
Subsequent theories applied more pragmatic elements to the interest-based approach. For example, Trebilcock
emphasized the importance of satisfying existing interest groups that oppose overall beneficial policy changes:
Over time, existing policies develop their own encrustations of institutions, vested interests, adaptive preferences,
and expectations that render the trajectory of getting from here to there a major part of the policy challenge.
(2014, pp. 1–2)
To achieve this end, politicians might opt to compensate the existing beneficiaries “for expanding the politically fea-
sible scope for socially desirable policy changes” (Trebilcock 2014, p. 7). Therefore, it can be expected that when faced
with strong interest groups, regulatory change will inevitably require some form of compensation.
However, interest-based explanations have been criticized for failing to consider “altruistic” and ideological motives
(Becker 1976). Moreover, such explanations fail to explain what caused the change of interests, and how these changes
are mediated in practice (Hood 1994).
For these reasons, it is also important to focus on the institutional settings that influence the level and shape of reg-
ulatory oversight (Hood 1994). For example, the Variety of Capitalism line of thought argues that institutions develop
differently according to their “path dependency,” as established by their particular history and norms (Hall & Soskice
2001). Consequently, this line of thought predicts that regulatory change, or the absence of regulatory change, is largely
determined by the historical institutional aspects of each constituency.
Other institutional approaches focus on more nuanced aspects of the institutional design (Moran 1986, pp. 192–
193). Utilizing Black’s (1976) concept of “relational distance,” which argues that the level of familiarity influences
the application of rules in a given society, we can expect that greater institutional “distance” between regulators and
regulatees will limit the effect of the latter over the former with regard to regulatory change.
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The last regulatory change approach that warrants mention is the “power of ideas.” The main argument of this
theory is that changes are often caused by ideological “climate change” driven by new, powerful ideas (Hood 1994).
As Quirk (1988) argued, influential ideas often advance politics of ideas that manage to overcome entrenched “client
politics” and change regulatory policies.
Yet another strand of the literature focuses on the mechanisms that support regulatory change, among which are
policy entrepreneurs, defined by Mintrom as “people who seek to initiate dynamic policy change” (1997, p. 739), and
“have the ability to organize others to help turn policy ideas into government policies” (1997, p. 740). In the context
of new technologies, policy entrepreneurs often support the adjustment of regulatory policies to new market
conditions:
[P]ublic policies are designed and implemented to address particular problems. Incremental changes are then made
to those policies as net challenges arise. However, instances occur when new challenges appear so significant that
established systems of managing them are judged inadequate. A key part of policy entrepreneurship involves seizing
such moments to promote major change. (Mintrom & Norman 2009, p. 650)
Specifically regarding business entities, Barry and Pollman coin the term regulatory entrepreneurs to describe com-
panies that “make[s] changing the law a material part of their business plan” (2016, p.2). Not only do these entrepre-
neurs have a unique business model, but typically they also deploy creative tactics to facilitate regulatory change, such as
taking advantage of legal gray areas after technological innovation changed the market circumstances, growing too big
to ban, or directly mobilizing their customers for political power (Pollman & Barry 2016, pp. 18–25). Despite such dis-
cussions on the role of policy entrepreneurship as an explanation for policy change, there have only been a limited
number of descriptive and empirical examinations of the effect of these entrepreneurs and the mechanisms they use
(Mintrom & Norman 2009; Pollman & Barry 2016). Specifically in the context of technological innovation and the
sharing economy, recent empirical work on regulatory change has focused on the normative aspects of the regulatory
framework (Cohen & Sundararajan 2015; Geradin 2015). To that end, it seems that there is room for an empirical
examination of the impact of new technologies on regulatory change, and the mechanisms that enable entrepreneurs
to pursue regulatory change (Koopman et al. 2015; Ranchordas 2015). Now that the main approaches to explaining
regulatory change and the mechanisms that support regulatory change have been reviewed, this analysis will turn to
a discussion of the existing regulatory regime in the US prior to the emergence of TNCs, which will provide the nec-
essary background to understanding the dynamics of regulatory change.
Moreover, taxi licenses and permits became a significant source of income for the regulators (Feeney 2015). From
an interest-based perspective, the end result of such policy was that taxi drivers formed a close, stable, and well-
organized group, often backed by strong political influence (Staley 1996).
Uber’s business model changed the modus operandi of the vehicle-for-hire service (Rayle et al. 2014;
Geradin 2015). From a functional theory perspective, Uber caused a change in the regulatory regime by sim-
ply eliminating some of the justifications for regulation, or at times, outperforming “traditional” regulation
using improved technological capabilities with reduced transaction costs (Lobel 2016). TNCs may provide
more efficient regulatory oversight than traditional governmental mechanisms, as they “may be more respon-
sive to consumer demand, may promote a more efficient allocation of resources... and may reduce consumers’
payment transaction costs” (Organisation for Economic Co-operation & Development [OECD] 2015, p. 4).
Similarly, user-rating mechanisms bridge the information asymmetry and facilitate trust between consumers
and producers, while global positioning system tracking increases passenger safety (Lobel 2016, pp. 146–
156). Therefore, a functional examination strongly suggests a reconsideration of the regulatory regime (Cohen
& Sundararajan 2015; Edelman & Damien 2016, pp. 296–302).
Additionally, the rise of TNCs created new regulatory challenges (Edelman & Damien 2016), and in some cases
raised concerns that at least some of the TNCs’ ability to offer lower prices is supported by sophisticated tax avoidance,
lower standards of employee rights, and other questionable practices (O’Keefe & Jones 2015).
In any case, as mentioned above, external changes in market settings also give rise to opposition to change driven by
existing interest groups (Trebilcock 2014). The apparent change in market setting and the resultant clash of interests
thus produce an intriguing case study for regulatory change. Before moving on to analyze the case of TNCs, we need
to take a brief look at pre-TNC regulation of the vehicle-for-hire market in the US.
Under US jurisdiction, the taxi market has traditionally been regulated at the municipal level, with virtually all
medium and large cities having some market regulation (Dempsey 1996, p. 78). Prior to the proliferation of TNCs,
there were three types of taxicab regulatory systems in the US. In a licensed system, any driver or company could
operate under basic licensing requirements, such as vehicle insurance. In a restricted system, the city limited the
number of allocated permits, and often set stringent requirements for operating in the market. Although such
licenses generally could not be sold, there were imposed limits on the number of operating taxis. In a medallion sys-
tem, common in large cities, the number of licenses issued was also limited, but allocated medallions were based on
an “auction” mechanism, usually sold for high prices (Schaller 2007). Medallions are typically transferable, and are
seen as tradable property, often held by non-driver owners who rent the permits in exchange for considerable sums
(HVM Capital 2015).
Regarding the taxi companies, prior to the entrance of Uber, the cab sector was fragmented, with various low scale,
mostly local service providers (Frankena & Pautler 1984). In contrast, TNCs use their standard online platform to
operate simultaneously in different cities and states. Moreover, TNCs benefit from a network effect, and therefore they
also have greater incentive to operate in different markets, serving clients across the world, as the overall network
benefits from every joining consumer (Rogers 2015).
4. Hypotheses
There might be several explanations for regulatory change, or alternatively for the absence of any change in
the taxi market, based on the theoretical frameworks discussed above. However, given the rapid and global
nature of the change, some theories fall short of providing an adequate explanation. The public-interest the-
ory, for example, might argue that regulators were responding to public pressure to liberalize the taxi market
to improve consumer welfare (Hood 1994); however, such an explanation might fail to explain why some
regulators choose to enact regulations that limit TNC operations, while other regulators choose to approve
TNCs (Griswold 2014; Kirkham & Lien 2015). Similarly, institutional theories might fail to explain the sharp
changes in regulatory policies over a short period of time (Hood 1994); whereas, the power of ideas line of
thought is likely to prove futile in trying to explain the concurrent rapid changes in countries with different
cultural and regulatory settings, such as the US and Continental Europe (Geradin 2015). This study will
therefore focus on the interest-based approach, which seems to provide the most examinable and solid
ground for research in this context.
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The study will examine four different hypotheses, focusing on an interest-based causal analysis. The first
hypothesis macro-analyzes the extent of regulatory change; the second zooms in to analyze ex ante interest
groups’ relationship to ex post regulatory change; the third examines the interest groups’ ability to resist
the regulatory change; and the fourth incorporates institutional elements and ex post interests into the anal-
ysis of regulatory change.
Hypothesis 2: The relationship between ex ante interest groups to ex post regulatory change.
As noted above, taxi regulatory systems have traditionally been highly regulated, albeit to a varied extent in different
cities. The assumption is that in cities with a licensed system – which will be regarded as cities with no restrictions, as these
cities did not restrict the number of taxis – taxi license holders will have no excessive profits, and therefore little incen-
tive and resources to resist regulatory change. In restricted markets, holders of taxi permits will opt to keep the status quo
of limited competition, and in markets where high-value medallion owners operate, the incentive and resources to defy
regulatory change will be the greatest.
• Ex ante market restriction is expected to be positively correlated with limited ex post regulatory change.
Hypothesis 3: The relationship between the extent of ex post regulatory change, to the compensation of interest groups.
As Trebilcock (2014) noted, when regulators pursue policy reversals that face resistance from existing power-
ful interest groups, and insofar as the interest groups are capable of restricting the regulatory change, it is
likely that some compensation will be required to facilitate the regulatory change. Such payment, therefore,
can provide a plausible proxy to the strength of the ex ante interest group, insofar as a regulatory change
was pursued despite hindering an existing interest group capable of opposing the regulatory change. More-
over, examining the awarded compensation is important as without such an examination, fallacious conclu-
sions regarding the strength of the opposing interest groups might be drawn based on the extent of
regulatory change alone, whereas the regulatory change will hinder the necessity of persuading the interest
group not to oppose the regulatory change in the first place.
• Overhaul of ex post regulatory change despite the existence of an ex ante interest group is likely to be positively corre-
lated to awarding a comprehensive compensation package.
Hypothesis 4: The effect of locus of regulation (municipal vs. state regulators) on regulatory change.
Institutional theorists emphasize the importance of institutions on regulatory decisions. In the case of US vehicle-for-
hire regulation, although traditionally determined at the municipal level, state legislators also hold the authority to
adopt statewide regulation (Cohen & Shaheen 2016, pp. 47–49). However, given the nature of the taxi industry and
the TNCs, the state level provides a different incentive structure than the municipal level for the two different indus-
tries, presenting an interesting intersection between institutional and interest-based explanations. Taxi companies
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mostly operate in a single city, typically benefitting from mutual coordination with municipal regulators. Their shared
historical circumstances, as well as their concrete singular interest to maintain current regulatory defense, produce con-
siderable incentive to maintain regulatory protection. Moreover, permit fees are often paid to the city in which taxis
operate, in return for their cartel-based exclusivity, and therefore local officials often have an interest in supporting this
industry (Butler 2014). In contrast, TNCs operate globally based on their online platform. Hence, taxi companies that
operate in different cities will have a collective action problem when trying to affect state regulators (Olson 1965),
whereas TNCs are likely to be more effective in influencing state regulators.
Moreover, from an institutional point of view, regulator–regulatee proximity and low relational distance are likely
to increase the extent of influence that the latter can have over the former. Therefore, municipal-level regulation is
expected to be biased toward the interests of the local regulatees (Thomas et al. 2010).
• Regulations adopted on the state level are expected to support a greater extent of regulatory change than municipal-
level regulations
5. Methodology
To assess the extent of regulatory change following the emergence of TNCs, this study analyzed the regulatory frame-
work for the vehicle-for-hire market in the 40 largest US cities, as of July 2015. The complete list of cities and their
regulatory framework appears in Appendix 1. US cities provide an appropriate ground for an analysis of the effect of
interest groups over regulation, as the state and municipal regulatory regimes operate under the same federal govern-
ment, with fairly limited variations of ideology, norms, and history, but with different vested interests and ex ante reg-
ulation. Moreover, the analysis spans a short period of time – Uber launched its operations only in 2011– thus limiting
time inconsistencies between the different observations. Additionally, the analysis encompassed 40 cities selected on the
basis of their population size, which yields a relatively large group of randomly selected test cases. Therefore, the analysis
enables us to examine recent widespread regulatory change and its affected variables, with rather limited external, non-
examined variations.
Because this analysis takes an interest-based approach, the measurement of regulatory change focuses on the pa-
rameters that affected the interests in the market. Therefore, a limited regulatory change is defined as stagnation or rel-
atively small changes to the existing interests in the market; whereas policies that drastically changed the interests in the
market are defined as ample regulatory change.
To measure regulatory change, it is first necessary to describe the measurement of the ex ante regulations, and sec-
ondly, the viable regulatory approaches toward TNCs (henceforth, the three possible strategies), which in turn dictate
subsequent policy measures. Analyzing both ex ante and ex post regulation in each examined city and their relation to
each other serves as a useful method to understand the extent of the regulatory change. Thirdly, the analyzed data is
used to perform a cross-city “grading” of the extent of regulatory changes.
Medallion
system
Restricted
system
Licensed
system
Because the heart of this study regards the extent of regulatory changes, further specification of the concept is
needed for an overall comparison. It is important to note here that the lack of prior empirical research of Uber or other
sharing economy regulatory frameworks necessitated the development of a new evaluation mechanism and measure-
ments to compare the regulatory changes across the different cities, and the chosen evaluation mechanism or the cross-
city comparison criteria can be challenged (Cohen & Shaheen 2016, p. 47). However, the following explanation aims to
show that the chosen evaluation criteria is transparent, clear, and applied objectively to the different cities, and that,
consequently, the evaluation outcome has considerable explanatory power, even if other competing evaluation criteria
can be suggested.
As the focus of the analysis is on the interest groups operating in the vehicle-for-hire market, the examination re-
volves around the extent of policy change taken to allow the operation of TNCs, whether formally or informally (Cohen
& Shaheen 2016, pp. 47–49). A regulatory framework that does not restrain the operation of TNCs is regarded as an
ample regulatory change, as it eliminates the regulatory protection from competition for the existing interest group.
Conversely, high barriers for entrance and competition posed to TNCs are regarded as limited change. Indeed, it
can be plausibly argued that regulatory change might be manifested and consequently evaluated in other forms, for ex-
ample, change in regulatory goals or legislation. Nevertheless, the extent to which regulation was revised to fit the new
entrants best emphasizes the extent of change in dispersion of costs and benefits in the market, and therefore, best suits
an interest-based analysis. Moreover, formal and informal analysis is employed to account for the de facto effect of
policymaking, as it can greatly deviate from formalistic analysis. The difference between de jure and de facto policies
will be explicated further in the analysis.
Banning
Strategy
Informal Approval
Strategy
Each strategy is discussed separately, as each has its own unique parameters and measurements. Given that the first
strategy is Formal Approval of TNCs, the focus of the analysis is the formal regulatory change. In cases of cities that did
not formally approve TNCs (either Informal Approval or Banning Strategies), the informal aspects of enforcement of
the existing policy are the focus of the analysis. Specifically regarding the Banning Strategy, the formal cease-and-desist
order was noted. The rest of this section will explain why each factor was chosen to represent the extent of restrictive-
ness of the enacted regulation, and how the examined factors were evaluated to establish a unified cross-city analysis.
1 Formal Approval Strategy: To account for the extent of regulatory changes, the common components of the
revised regulatory framework were examined.2
5.2.1. License fee requirements. The driver and company fees required to operate were examined, as they may pose a
clear barrier to entrance. Company fees were regarded as a relatively “light” restriction, whereas even small fees for
drivers were regarded as a noticeable limitation, because TNCs are often based on part-time employees, who are highly
sensitive to even minimal entrance barriers. A more than US$20 license fee for drivers was regarded as a weak limita-
tion, and more than US$100 as a strong limitation. For companies, licenses below US$5,000 were regarded as very weak
to weak, up to US$50,000 as medium, and higher fees were regarded as strong to very strong.
5.2.2. Targeted limitations. This variable measures the extent of limitations aimed at TNC operators, which restrain
TNCs’ freedom of operation. Minor restrictions, for example, on the maximum vehicle year of production, were
regarded as very weak or weak limitations. Requirements that restricted firms and drivers, for example, if the latter
are required to be physically present at the city office that issues licenses, were regarded as medium limitations. Lastly,
if the requirements necessitated a change in the firm’s business model, such as in cases where the number of drivers the
firm can hire was capped, the limitations were regarded as strong to very strong.
5.2.3. Mandatory checks. Referring both to drivers and vehicles, this variable describes the level of background
checks required for the issuance of a license to operate (Daus & Russo 2015). Minimal checks, which can be con-
ducted by the TNCs themselves, were regarded as very weak or weak (Lobel 2016, p. 151). More stringent checks,
such as comprehensive vehicle inspection by an external entity, were regarded as medium. Lastly, harsher checks, such
as fingerprint examination, were regarded as strong, especially if the checks must be done by an external entity, if the
fees for checks are considerable, or if physical presence is required at a check (Daus & Russo 2015, p. 80).
5.2.4. Price cap. Some jurisdictions enabled regulators to introduce certain price regulations. If an option to curb
prices was part of the revised regulation, it was regarded as a weak to strong restriction, depending on the level of
discretion given to the regulator and the type of price regulation that could be ordered. It should be noted that no
examined city exercised any de facto price regulation of TNCs.
5.2.5. Cessation of operation. Cases in which any of the two biggest TNCs, Uber and Lyft, ceased to operate in a city
following a new regulation, were regarded as a strong surrogate for restrictive regulation. Given that the TNCs already
paid the sunk costs of entering the market and establishing the infrastructure required for the operation, the departure
of a TNC provides a strong de facto testament of firmly restrictive regulation.
5.2.6. Compensation. This variable examines the extent of remuneration given to taxi license owners upon approval
of TNC regulation. Weak compensation was regarded as minimal attempts to reduce regulatory burdens for taxi
drivers, such as the elimination of prior license requirements and a small reduction in fees. A greater reduction in fees
was regarded as medium, whereas increased compensation that included the issuance of new taxi licenses to existing
firms, for example, was regarded as strong. It should be noted that no taxi drivers or license holders were directly com-
pensated for their previous license payments, nor did they receive direct monetary compensation, in any of the exam-
ined cities. Moreover, other forms of compensation, such as delayed implementation, were either not relevant or non-
existent in all examined cities, and therefore the focus of the assessment was on the varied forms of compensation.
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2 Informal Approval Strategy: where cities opted not to issue any formal changes to the existing regulation, the
focus shifted to the informal, de facto element of enforcement. In this case, TNCs operated either illegally or
in a legal gray zone, and regulators could opt for varied degrees of enforcement. Indeed, the absence of enforce-
ment might provide a very comfortable ground for TNC operations even without formal approval; whereas un-
compromising enforcement is likely to force TNCs to leave the market. In addition, in cities that applied
Informal Approval or Banning Strategies, the cessation of TNCs’ operation was examined, as it proved to be a
telling proxy for harsh enforcement if the companies opted to leave the market.
5.2.7. Enforcement. The de facto enforcement of the existing legal regime was examined. Few small and infrequent
fines were regarded as very weak to weak. More frequent fines, including impounding of cars, were regarded as medium
enforcement. Lastly, frequent hefty fines and impounding of cars, especially if conducted by a designated police
taskforce, were regarded as strong to very strong enforcement.
3 Banning Strategy: Similar measurement to the Informal Approval Strategy, but moreover the issuance of a cease-
and-desist order was noted, if such an order was not subsequently reversed by the regulators.
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6. Findings
Starting with the first part of Hypothesis 1 regarding the extent of regulatory change, the elected regulatory strategy was
taken as the main proxy for regulatory change. Because in all but one of the examined cities the TNCs commenced op-
eration before receiving any formal approval, a Formal Approval Strategy or unenforced formal disapproval were
regarded as capturing ample regulatory change. From a bird’s eye view, it is apparent that contrary to the hypothesis,
regulators in major US cities rarely banned TNCs, but rather opted to revise the regulation to accommodate them
(Figure 3). Only three cities issued outstanding cease-and-desist orders against TNCs, whereas 31 cities, constituting
77.5 percent of the examined cities, decided to revise their regulatory framework to accommodate TNCs.
The empirical evidence also shows that de facto enforcement was rather lax in most cities, therefore negating the
second part of Hypothesis 1 as well. Figure 4 shows that out of the nine cities that did not formally approve TNCs, four
cities de facto pursued limited enforcement (none to weak). Moreover, as can be seen in Appendix I, the average ERRG
of the 40 examined cities was 16, representing a fairly modest extent of regulatory limitations of TNCs. To conclude, the
findings demonstrate that the largest US cities mostly chose to formally approve TNCs, and when they did not, their de
facto enforcement of the TNCs’ lawlessness was unexpectedly lenient.
Considering the rather surprising findings regarding the apparent widespread regulatory change in the vehicle-for-
hire market, it is intriguing to examine whether the primarily affected interest group, taxi license holders, managed to
resist the change. To assert the strength of the taxi market interest groups, ex ante limitations on competition was taken
De-facto enforcement
In cities that elected Strategy (2) or (3)
4
3
Number of cities
None
Very weak
2
Weak
Medium
1 Strong
Very strong
De-facto enforcement
as a proxy. As noted above, the cities were divided into three groups: licensed systems (11 cities), restricted systems (18
cities), and medallion systems (11 cities). The data on ex ante market restriction was then crossed with ex post regula-
tory change.
In accordance with Hypothesis 2, and despite the overall widespread regulatory change, the findings seem to sup-
port the claim that cities with more concentrated interest groups better managed to limit regulatory changes, compared
to cities with less restrictive ex ante regulation. Figure 5 presents the relationship between ex ante regulation and average
ERRG, and Figure 6 presents the relationship of ex ante regulation to the number of cities that elected not to formally
approve TNCs (Informal Approval or Banning Strategies). It is apparent that cities with medallion systems (and there-
fore harsher ex ante limitations on competition) implemented less regulatory approval of TNCs, especially than cities
with minimal ex ante market restrictions.
Regarding Hypothesis 3, despite the widespread regulatory change, the findings seem to negate the claim that cities
with more concentrated interest groups had to compensate the existing interest group to facilitate regulatory change.
Figure 7 shows that among 31 cities that revised their regulation (Formal Approval Strategy), only eight chose to com-
pensate the existing interest groups, and only two (Chicago and Seattle) awarded considerable compensation. Granted,
the two abovementioned cities have medallion systems, and five other cities with ex ante restrictions compensated the
taxi industry, which highlights the relationship between strong interest groups and compensation. Nevertheless, most
other cities did not seem to require any compensating of existing interest groups to pass the new regulation that harmed
the latter, thus raising doubts about taxi license-holders’ ability to oppose “harmful” regulation.
Moving on to Hypothesis 4, which focuses on the relationship between the locus of regulation, city versus state
level, to the extent of regulatory change, the analyzed data refers to the level of authority that initiated the regulatory
oversight. Table 3 presents a cross-analysis of the locus of regulation, ex ante restrictions, and regulatory outcome, and
Figure 8 highlights the average ERRG of the above. As Appendix 1 shows, in 20 cities, the main locus of regulation was
Average ERRG
Extent of Regulatory Reform to accommodate TNCs
30
25
Licensed system
Average ERRG
20 Restricted system
15 Medallion system
10
0
Licensed system Restricted system Medallion system
Type of ex-ante restrictions
6
Licensed system
5
Restricted system
4
Medallion system
3
0
Licensed system Restricted system Medallion system
Type of ex-ante restrictions
Figure 6 Number of cities with no formal approval of Transportation Network Companies (TNCs).
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12
Number of cities
10
No compensation
8 Weak compensation
6 Medium compensation
Strong compensation
4
0
Licensed system Restricted system Medallion system
Extent of compensation by ex-ante regulatory system
Table 3 ERRG and elected strategy by locus of regulation – city versus state
Number of cities with no
Average Extent of formal regulatory approval
Number of Regulatory Reform (Informal Approval or
Locus of regulation Ex ante restrictions examined cities Grade (ERRG) Banning Strategies)
35
30
Average grade
25
Licensed system
20 Restricted system
15 Medallion system
10
0
City State Overall
Locus of ex-post regulation by ex-ante regulatory system
Figure 8 Extent of Regulatory Reform Grade (ERRG) according to the locus of regulation and ex ante restrictions.
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the municipal level, in 17 cities the regulation was determined at the state level, and three cities lacked concrete regu-
latory oversight of TNCs.2
Table 3 illustrates stark differences between city and state level regulation. In cities with municipal-based regu-
lations, TNCs were limited to a greater extent, especially in cities with ex ante restrictions (average ERRG of 25 and
35 for ex ante licensed systems and medallion systems, respectively). Moreover, in six cities the municipal-based
regulation did not approve TNCs, as opposed to none of the cities in which state-based regulation was issued. Strik-
ingly, regulations initiated at the state level showed not only a significantly lower grade of ex post restrictions (lower
ERRG), but almost unified average ERRG (seven) regardless of the ex ante regulatory system. Therefore, it appears
that regulations initiated at the state level were indifferent to the ex ante regime, often sweeping away prior limita-
tions on competition.
Indeed, it might be plausibly argued that the analysis of the relationship between the locus of regulation to the ex
post regulatory limitation of TNCs is misleading, as the extent of ex ante regulation influenced the locus of regulation.
In other words, cities with medallion systems, for example, had significant incentive to determine the regulation by
themselves, as they had a vested interest in maintaining regulatory protection. Thus, it is plausible that some cities man-
aged to persuade state-based regulators to leave taxi regulation intact; most notably, Pennsylvania state-based regulation
allows Philadelphia to maintain its medallion system, despite approving TNCs elsewhere in the state (see Appendix 1).
Nevertheless, arguing that the interest groups managed to determine the locus of regulation to their own benefit main-
tains the firm relationship between the interest group and the ex post regulatory change, which is the essence of our
analysis.
7. Discussion
This analysis focused on the effect of existing interest groups on regulatory change in the vehicle-for-hire market, in
order to expand the open debate by focusing on a contemporary, high salience case study. The main part of this study
analyzed original data in an attempt to show the effect of interest groups on regulatory change, in the context of emerg-
ing technology and the sharing economy. Now, after considering the findings of the analysis, we can move to the second
part of this essay, which aims to make explicit the extent to which an interest-based approach can explain the overall
regulatory change, and the extent to which it does not, and to shed light on the reasons behind the seemingly prevalent
regulatory change.
The effect of the ex ante interest group on ex post regulation seems to present a two-fold picture. Examining the
analysis closely (micro-level), the results imply several strong correlations between interest groups and the extent of reg-
ulatory change, which support the interest-based explanation for regulatory change. The findings support Hypothesis 2,
as ex ante restrictions, which historically created strong interest groups of taxi license holders (Butler 2014), negatively
affected the extent of ex post regulatory change. Cities with restrictive ex ante regulation were reluctant to open the mar-
ket for competition, probably as they feared hurting the interests of the taxi license owners and possibly the regulators
themselves. Further examination of the interest-based elements, incorporating institutional aspects of the regulatory
regime, strengthens the above findings. Acknowledging the concrete interest and ability of local taxi industries to affect
municipal regulators, it was expected that local ex post regulation would be more restrictive toward TNCs. In contrast,
it was expected that state-level regulation would be more responsive to TNCs, as local taxi companies suffer from “col-
lective action” problems (Olson 1965) that limit their ability to lobby statewide regulators. Indeed, the findings support
the claim that the locus of regulation influences the extent of regulatory change, and that regulators’ greater proximity
to the entrenched interest groups cause reluctance to change existing policy. Moreover, the state-based regulation quasi
constant ERRG implies that in the absence of interest group pressure, US regulators will opt to allow TNCs to operate
with minimal limitations.
More important, however, are the overall ex post regulatory outcomes portrayed by the analysis (macro-level),
which yield different conclusions and highlight the inability of the taxi lobby to maintain regulatory protection to shield
itself from competition. Among the 40 examined cities, only three chose to formally oppose TNCs, whereas the great
majority (77.5 percent) chose to accommodate TNCs. Taxi license holders were rarely compensated in any significant
form for the regulatory change, despite the long-standing coordination in the market and the high permit fees paid to
regulators over the years. Utilizing Trebilcock’s (2014) framework, the limited compensation paid to the harmed inter-
est group demonstrates that in most cases, taxi license owners were not perceived to be capable of opposing the
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regulatory change. Moreover, TNCs explicitly initiated their high-profile operation without regulatory approval, yet
most regulators chose to overlook the infringement of the regulatory regime. Consequently, throughout the US, the
value of taxi licenses dropped sharply (HMV Capital 2015), demonstrating the expected fate of an interest group that
fails to defend its regulatory protection. After approving Houston’s rideshare regulation, Mayor Annise Parker was ex-
plicit: “This is a technology that is destructive to very entrenched, existing business enterprises, and in fact one of the
most heavily regulated business enterprises in any big city in America” (Delaughter 2014). Nevertheless, Houston, like
most cities in the US, chose to revise the regulation and directly harm entrenched interest groups. In sum, the strong
taxi license-holders interest group clearly failed to defend its regulatory turf throughout the examined US cities.
In other words, a narrow interest-based explanation provides some explanatory power, but cannot account for the
widespread regulatory change that drastically changed the vehicle-for-hire regulatory framework. It seems that in the
context of the US taxi-market, the strong taxi lobby merely managed to partially withhold the regulatory change that
heavily reduced its supra-competitive gains. Therefore, to account for the widespread regulatory change, one needs
to expand the analysis beyond the scope of a “static” existing interest group analysis. Granted, elements from other the-
ories might explain the radical regulatory change (Black & Lodge 2005), among them the power of ideas emphasis on
Uber’s slick and innovative public image (Weise 2015). However, does this mean that an interest-based explanation
cannot account for the apparent regulatory change?
I would claim that the analysis does not prompt us to disregard the importance of the public choice theory, but
rather to develop a more dynamic approach toward the analysis of interest-based market settings, most notably to take
into account the changes caused by the newcomers, who were equipped with new technologies. From that perspective,
expanding the interest-based approach to reflect the coming to power of the new technological regulatory entrepreneurs
and their ability to represent the interests of the diffused public can provide an explanation to the rapid and widespread
regulatory change.
Since the Peltzman (and other Chicago) models depend on the assumption of imperfect information to the general
public as to what they are losing... if it is discovered that the public is losing substantial amounts of wealth through
the regulatory process, then there will be an incentive for the system to correct itself. (1984, p. 138)
Uber typically communicated effectively with users – who were also seen as potential political supporters – by
deploying an online platform to convey tailored information and send key messages during pivotal stages of the polit-
ical process (Griswold 2014). Second, the analysis emphasized the role of improved connectivity and communication
platforms (Weise 2015) in reducing additional major constraints for collective action – organization and transaction
costs (Peltzman 1976). With millions of consumers frequently mobilized to sign petitions in favor of TNCs (Griswold
2014; Weise 2015), Uber directly used its system to bridge the collective action problems and nudged the public for
voluntary, “ready-made” lobbying (Pollman & Barry 2016, pp. 23–25). The reduced efforts required from consumers
to participate in public lobbying encouraged greater public participation, as confirmed by Justin Kintz, Uber’s head of
public policy for North America:
…the last two dozen Uber petitions that were filed in response to regulatory battles in particular markets [garnered]
500,000 total petition signatures… (T)hat’s a level of civic engagement that few issues have ever created for any sort
of political issue, let alone for one that is being driven by an app-based technology company. (Bhuiyan 2015)
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Technology entrepreneurs’
Collective action barrier Solution to collective action problem
characteristics
Figure 9 How do technology entrepreneurs minimize the barriers for collective action to pursue regulatory change?
Third, the new technologies outperformed existing regulatory systems (Edelman & Damien 2016; Lobel 2016),
thus countervailing the greater expertise held by incumbents and regulators, eliminating an additional advantage
that helps powerful groups to maintain their regulatory turf (Hood 1994). The improved safety mechanisms, pricing
precision, dynamic information, and other elements were often seen by the regulators, academia, and public as the
TNCs’ raison d’etre (Lobel 2016, pp. 14–20). Lastly, the technology is often mediated by a single or few entities –
Uber and the rival TNCs, in this case – and therefore the profits gained by mobilizing the diffused public are often
shared by the few early-movers that initiated the change, as a result of the network effect (Rogers 2015). This mech-
anism manages to exclude most free riders from cropping the gains of the regulatory change and therefore increases
the entrepreneurs’ incentive to promote regulatory change, insofar as they are able to endeavor a business model
that will capitalize and monetize the regulatory change. In some states and cities, Uber alone often invested more
than all taxi companies together in political lobbying (Figler 2015; Lobel 2016, p. 142), representing what seems
to be a rational investment in changing regulatory policy to allow the company to crop revenues that were previ-
ously awarded to taxi license owners.
Therefore, it seems that there are inherent attributes that render new technologies – and the technological regula-
tory entrepreneurs that utilize these technologies – more likely to eliminate regulatory protections by dismantling the
pre-existing market conditions that facilitated regulatory protection and rallying the vast public to promote regulatory
change. Indeed as Wilson argued, “The entrepreneur serves as the vicarious representative of groups not directly part of
the legislative process” (1980, p. 370). The technology entrepreneurs portrayed above have different natures, motives,
and methods from Wilson’s political entrepreneur, but nevertheless yield the same consequence of policy reversal.
Moreover, technology entrepreneurs seem to be equipped with certain characteristics that make them more competent
in achieving policy reversal than their political counterparts, at least in certain contexts. If the above is true, we are likely
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to see additional technological regulatory entrepreneurs in the coming years (Pollman & Barry 2016, pp. 43–47),
rallying the public and successfully achieving policy reversal to shift benefits from concentrated interest groups to
the diffused public.
Having said that, two caveats should follow the above-stated explanation of the role played by technological reg-
ulatory entrepreneurs in achieving policy reversal. First, TNCs have also taken advantage of more conventional
mechanisms to influence policymakers (Pollman & Barry 2016, pp. 25–27), often very successfully (Bhuiyan
2015). Although it is almost impossible to quantify the amount TNCs spend on lobbying (an issue that will be fur-
ther discussed), it appears that TNCs relied heavily on lobbying of all sorts, frequently hiring more lobbyists than all
other taxi companies or organizations together (Figler 2015; Lobel 2016, p. 142). Indeed, Uber’s lobby efforts and
media attention were almost unprecedented, leaving politicians little room to resist the public’s demand in this
highly politically salient issue (Hood 1994, pp. 34–35), and greatly affecting the regulatory outcome (Kuffner
2015). TNCs also used sophisticated mechanisms and narratives to influence the public debate. For example, poli-
ticians who attempted to stop Uber’s expansion were immediately criticized for stifling innovation and were urged
“not to stand in the way of progress” (Kirkham & Lien 2015). These traditional lobbying mechanisms, nonetheless,
do not negate the crucial effect that technology had over the ex post regulatory outcome, and are often interlinked
with technological capabilities – for example, lobbying was easier when the public “voluntarily” applied for petitions
via the app (Griswold 2014; Weise 2015).
Second, it should be noted that in order to confirm the hypothesis regarding the role played by technological reg-
ulatory entrepreneurs, further empirical examination should focus on the dynamics that allowed Uber to mobilize the
diffused public and to change the map of interests in the market. Certainly, there are several challenges standing in the
way of any empirical examination of Uber’s efforts and successes in rallying the diffused public. Perhaps the main chal-
lenge is quantifying Uber’s lobbying costs, which is not a straightforward task, both because not all states require the
disclosure of lobbying costs, and because Uber’s lobby efforts come in many forms, such as advertisements and its
strong social media presence (Weise 2015). Nonetheless, finding an empirical basis to the role of technology in rallying
the diffused public can strongly reinforce the theoretical explanation offered above – and I hope that the foundation laid
here will benefit further empirical research.
8. Conclusion
The analysis conducted in this article aimed to enrich the open debate around the effect of interest groups over reg-
ulatory outcomes, focusing on a high-salience sharing economy case. The in-depth analysis of the vehicle-for-hire
regulation in the 40 largest US cities found that despite long-standing cooperation between regulators and a concen-
trated interest group of taxi license holders, extensive regulatory change was pursued throughout the US following
the emergence of TNCs. The analysis evaluated the correlation between the ex ante taxi market regulatory limita-
tions to the ex post regulatory limitations on TNCs, and did find that strong ex ante regulatory limitations, and
hence the existence of a strong interest group of taxi license holders, somewhat limited the extent of the regulatory
change following the emergence of TNCs. However, the analysis also found that 77.5 percent of the 40 examined
cities decided to revise their regulatory framework to accommodate TNCs, and that even though TNCs typically
launched their operations in cities in the absence of regulatory approval, only five cities chose to pursue more than
weak enforcement measures. Furthermore, taxi license holders received little compensation from regulators when
their legal status was changed, suggesting that the interest group was not seen as capable of withholding the regu-
latory change. All in all, the regulatory change shifted the benefits of regulatory protection from the incumbent in-
terest group to the TNCs and consumers. The TNC analysis thus displays an intriguing case wherein existing
incumbents proved incapable of withholding widespread regulatory change following the emergence of new
entrants.
To make this rather counterintuitive, but almost ubiquitous regulatory change intelligible, the article extended
the interest-based explanation by focusing on an additional important element: the technological capabilities of
the entrepreneurs that promoted the changes in the market. It was argued that emerging technologies facilitated
the change in the map of interests in the market, enabling technology entrepreneurs to offer new services to the
public, and significantly eliminating the collective action barriers in the market. The technological regulatory entre-
preneurs noticed the gap in the market, which was created by the regulatory protection granted to the incumbent
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taxi licence holders, and used their technology platform to rally the diffused public to crop the benefits held by the
interest groups, to the point that regulators were almost forced to actively or passively support pro-TNC regulatory
regime.
The TNC case showed that by using novel technologies, entrepreneurs can effectively bridge collective action bar-
riers and rally the public to drive regulatory change. Technological regulatory entrepreneurs can bridge the collective
action barriers by becoming the focal point of the change and thus exclude free riders, lower the organizational costs
for the diffused public, disseminate information effectively and directly to consumers, and use their expertise and tech-
nological capabilities to inform and mobilize the unorganized public, turning consumers into a powerful advocacy
group in the process. Facing forceful entrepreneurs backed by consumers-turned-lobbyists, policymakers are often
incapable of maintaining the status quo that benefited the incumbents, and are inclined to change the regulatory frame-
work to fit the new market setting. The study therefore showed that technology entrepreneurs are capable of spawning a
bottom-up change in the regulatory framework to accommodate their business model, cropping great profits in the
process. It is therefore argued that we are likely to see new technological regulatory entrepreneurs building on TNCs’
success in the future, utilizing emerging technologies to bridge collective action problems and becoming a pivotal driv-
ing force in future regulatory changes.
Notes
1 Adapted from Hood (1994), p. 25.
2 An additional common element, insurance requirements, was omitted from the analysis, as it is highly influenced by lobby efforts
of the insurance industry. For more information, see Cohen and Shaheen (2016, pp. 46–47) and Appendix D.
3 The three cities were omitted from this analysis, as both levels of regulation equally overlooked the topic.
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202017 John Wiley & Sons Australia, Ltd © 2017 John Wiley & Sons Australia,359
Ltd
A.
360
Appendix I: Elements of regulatory change in the taxi market in the 40 largest US cities
Tzur
As of July 2015
Regulatory
Common
Ex-ante Locus of parameter to Strategy 3 Strategy 2&3 Weighted
Examined city restrictions TNC entrance & formal regulation regulation Strategy all strategies parameter parameter Strategy 1 parameters ‘grade’ Compensation
change following Uber
Austin TX Restricted 5.14 16.10.15 5 City Strategy 1 None Medium None None Weak None 7 None
Baltimore MD Restricted 1.13 12.05.14 16 State Strategy 1 None Medium None Weak Strong None 15 Weak
Boston MA Medallion 10.11 No N/A City Strategy 2 None Medium 30 N/A
regulation
Charlotte NC Restricted 9.13 No N/A No Strategy 2 None Very weak 10 N/A
regulation Regulation
Chicago IL Medallion 9.11 28.05.14 32 City Strategy 1 None Medium None Very Medium Weak 25 Strong
strong
Colorado CO Restricted 4.13 05.06.14 2 State Strategy 1 None Medium None None None None 3 None
Springs
Columbus OH Medallion 12.13 21.07.14 8 City Strategy 1 Lyft Medium Weak Medium Strong None 39 None
Dallas TX Restricted 9.13 10.10.14 13 City Strategy 1 None Weak Weak Medium Strong None 18 None
Denver CO Restricted 9.13 05.06.14 9 State Strategy 1 None Medium None None None None 3 None
Detroit MI Licensed 3.13 16.05.14 14 City Strategy 1 None None None None Weak None 4 None
El Paso TX Medallion 6.14 No N/A No Strategy 2 None None 0 N/A
regulation Regulation
Fort Worth TX Licensed 5.14 No N/A No Strategy 2 None None 0 N/A
regulation Regulation
Fresno CA Licensed 2.14 17.09.13 -5 State Strategy 1 None Reversed Weak None None Medium None 8 None
Houston TX Restricted 2.14 06.08.14 6 City Strategy 1 Lyft Strong Weak Weak Strong None 38 Weak
Indianapolis IN Licensed 8.13 01.03.14 5 City Strategy 1 None None None None None None 0 None
Jacksonville FL Licensed 9.13 24.7.14 10 City Strategy 3 None 7.14 Weak 25 N/A
Las Vegas NV Medallion 10.14 11.11.14 1 City Strategy 3 Uber 11.14 Strong 50 N/A
Long Beach CA Restricted 3.12 17.09.13 18 State Strategy 1 None Reversed Weak None None Medium None 8 None
Los Angeles CA Restricted 3.12 17.09.13 18 State Strategy 1 None Reversed Weak None None Medium None 8 None
Louisville KY Licensed 4.14 10.12.14 8 State Strategy 1 None Weak Weak Very weak Strong None 14 None
Memphis TN Restricted 4.14 20.05.15 13 State Strategy 1 None Reversed None None None Very weak None 2 None
Regulatory change following
(Continues)
Tzur
17485991, 2019, 3, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/rego.12170 by Boston University, Wiley Online Library on [27/08/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
©
Appendix I: (Continued)
A. Tzur
Regulatory
Table 1 (Continued)
Common
Ex-ante Locus of parameter to Strategy 3 Strategy 2&3 Weighted
Examined city restrictions TNC entrance & formal regulation regulation Strategy all strategies parameter parameter Strategy 1 parameters ‘grade’ Compensation
Mesa AZ Licensed 11.12 09.04.15 29 State Strategy 1 None None None None Weak None 4 None
Miami FL Medallion 6.14 No N/A City Strategy 2 None Strong 40 N/A
regulation
Milwaukee WI Restricted 2.14 01.08.14 6 City Strategy 1 None None Strong Strong Strong None 20 Weak
Nashville TN Restricted 12.13 17.12.14 12 City Strategy 1 None Weak None Medium Medium Medium 22 None
New York NY Medallion 5.11 No 16 City Strategy 2 None Reversed Medium 30 N/A
regulation
Oakland CA Restricted 5.13 17.09.13 4 State Strategy 1 None Reversed Weak None None Medium None 8 None
Oklahoma City OK Restricted 10.13 21.10.14 12 City Strategy 1 None Weak Weak Medium Strong None 18 None
Philadelphia PA Medallion 10.14 06.10.14 0 City Strategy 3 None 10.14 Strong 50 N/A
Phoenix AZ Licensed 11.12 09.04.15 29 State Strategy 1 None None None None Weak None 4 None
Portland OR Restricted 12.14 09.04.15 4 City Strategy 1 None Reversed Strong Very Strong Strong None 25 Weak
(Uber left strong
and returned)
Sacramento CA Restricted 1.13 17.09.13 15 State Strategy 1 None Reversed Weak None None Medium None 8 None
San Antonio TX Restricted 4.14 11.12.14 8 City Strategy 1 Uber and Lyft Medium None Medium Strong None 50 None
San Diego CA Medallion 6.12 17.09.13 15 State Strategy 1 None Reversed Weak None None Medium None 8 None
San Francisco CA Medallion 4.11 17.09.13 29 State Strategy 1 None Reversed Weak None None Medium None 8 Weak
San Jose CA Restricted 4.11 17.09.13 29 State Strategy 1 None Reversed Weak None None Medium None 8 None
Seattle WA Medallion 8.11 15.07.14 23 City Strategy 1 None Medium Weak Medium Strong None 19 Strong
Tucson AZ Licensed 10.13 09.04.15 16 State Strategy 1 None None None None Weak None 4 None
Virginia Beach VA Licensed 4.14 17.02.15 10 State Strategy 1 None Reversed Strong None None Weak None 8 None
Washington DC Licensed 12.11 28.10.14 12 City Strategy 1 None Weak None None Weak None 6 Weak
Regulatory change following
A.Uber
Ltd
© 2017 John Wiley & Sons Australia,361
Tzur
17485991, 2019, 3, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/rego.12170 by Boston University, Wiley Online Library on [27/08/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License