The high price of mistrust

> What actually happened was instead the government in most places have figured that the customers liked the illegal service so much, that if they do fight it, they will actually reduce, instead of increasing their legitimacy.

I don't think it's that, unless you think the dissatisfaction expressed by officials is just posturing. I believe that it's just because bureaucracy moves slowly - and the core of Uber's strategy was to corner the market and gain sympathy of the riders before local regulators could gear up - at which point they'd be fighting their own citizen. Basically, pitting people against their local governments.

> Imagine the government tomorrow decides to ban shaking hands. Would prosecuting the hand-shakers increase the trust in government and its legitimacy? No: people would rightly conclude that it's the government that's wrong, and it doesn't deserve trust or charity here.

I get your example and it's a fair point - but I must say we generally did just that in 2020 with COVID restrictions :). That itself initially impacted the trust positively, but I guess it's easier to imagine the threat of a pandemic than a threat of an underpaid and uninsured driver operating an illegal cab having an accident.

> In every city I am aware off, on both sides of the pond, traditional taxis have not been able to compete very well with Uber. Sure, in some places the taxis were less bad than in others, but almost everywhere they were overpriced and untrustworthy.

I'm not saying they weren't in need of some competitive pressure, but generally, taxis weren't able to compete very well with Uber because it's really hard to compete with an international corporation that just ignores the law, while subsidizing its offerings from practically infinite VC budget. Whether the existing taxi services in any given city were good or bad or in between, it didn't matter - they didn't stand a chance.

> Have you tried paying with card in a taxi in Poland before Uber came up? Somehow, despite MasterCard sticker on the window, the payment terminal always happened to be broken... Also, try taking a non-Uber cab from the airport in Warsaw or Krakow.

I am from Kraków, I was born there, and I moved out only ~3 years ago. I've been riding taxis ever since childhood. From my perspective, network taxis weren't all that bad (it was common knowledge you don't use the "entrepreneurs" that park outside airports and railway stations, you probably even remember a TV show that revealed how they scam you if they think you're a tourist). Uber itself didn't introduce anything substantial over what iCar did a decade before. And while iCar was also playing a bit loose with the regulations, and there were some conflict with the local taxi networks (I recall articles about some tire slashing), they've ultimately managed to settle it through courts and iCar could deliver its value proposition completely legally. Uber didn't even bother.

> I don't think it's that, unless you think the dissatisfaction expressed by officials is just posturing. I believe that it's just because bureaucracy moves slowly - and the core of Uber's strategy was to corner the market and gain sympathy of the riders before local regulators could gear up - at which point they'd be fighting their own citizen. Basically, pitting people against their local governments.

And what's the problem with that? The government is meant to serve people, not to rule over them. If the governments can't push their power, because the people will hate it and won't allow it, that's good: that's why we have representative democracy in the first place. If one can improve the lives of the people and make them happier by subverting the law, this is really damning for the government.

> That itself initially impacted the trust positively

Yes, and then people saw the government restrictions mostly for what they were: a safety theater.

> but I guess it's easier to imagine the threat of a pandemic than a threat of an underpaid and uninsured driver operating an illegal cab having an accident.

I don't think that risk of car accident is something so completely foreign that people entering a cab don't know what they are getting into. More importantly, even if you grant the government the authority to take away people's freedom to do things the government considers too risky, purely out of paternalism, the fact is that the government had no reason whatsoever to believe that Uber cabs are less safe: if you want to argue that the government is better informed about the risks of riding a regular cab vs. Uber than a regular person, it had better actually be better informed.

> I'm not saying they weren't in need of some competitive pressure, but generally, taxis weren't able to compete very well with Uber because it's really hard to compete with an international corporation that just ignores the law,

If the law is so onerous, and Uber violating it results in its repeal (or at least ceasing enforcement), then instead of complaining, the taxi companies should rejoice, and thank Uber for the great service it provided.

This is of course ridiculous, because the reason traditional taxi companies are unhappy about Uber breaking the laws precisely because the laws help protect their business and extract rent at the expense of the consumers. Fighting against rent-seekers is a good thing, and rent-seeking is another reason why not all laws governments pass are good, and why it's not always morally wrong to violate them.

> while subsidizing its offerings from practically infinite VC budget. Whether the existing taxi services in any given city were good or bad or in between, it didn't matter - they didn't stand a chance.

Weren't you just a moment ago saying that the drivers were "underpaid"? If it ain't the drivers who are subsidized, then who is, exactly?

> From my perspective, network taxis weren't all that bad (it was common knowledge you don't use the "entrepreneurs" that park outside airports and railway stations, you probably even remember a TV show that revealed how they scam you if they think you're a tourist).

They were expensive, they didn't always arrive when called, you had to always be on the lookout to not be scammed, the vehicles were old, often dirty, the drivers were rude, the payment was cash only, and many more. I remember that, and Uber was improvement on every single metric. Cabs are much better now, precisely because Uber forces them to behave better or die.

> Uber itself didn't introduce anything substantial over what iCar did a decade before.

If so, how did Uber gain any foothold at all? If it's all VC subsidies, they'll run out, and in the meantime, the customers keep benefitting from subsidized rides.

I really like the paper that shows that higher density of associations (the way Putnam measures "social capital") was associated with higher support for the Nazi party in Germany[^1]. Things are not as simple as "trust=good".

[1]:https://www.journals.uchicago.edu/doi/abs/10.1086/690949?jou...