Earlier quoted context omitted.
The reason there was no political will to punish Airbnb and Uber for violating the law was that initially they were subsidized with VC money and so were able to undercut traditional hotels and taxis on price. In the world of tradable goods, pricing below cost with the intent of putting competition out of business so you can raise prices later is known as "dumping" and is itself illegal.
The traditional taxi industry was rife with corruption, bad experiences, and poor service in many jurisdictions before uber/lyft. As terrible of a human being that I think Travis Kalanick is, it was only going to take lawbreaking to overcome such a tainted system. Medallion systems often prevented any competition, sometimes to absurd effect. The number of licenced taxis often didn't keep pace with population growth,…
The driver can't scam the passenger. The driver can't set the meter wrong, drive an unnecessarily long route, or just be an outright unlicensed taxi. Instead, the driver maintains a relationship with Uber, and the passenger can preview the fare before committing.
The passenger can't scam the driver. In a traditional taxi, you could theoretically just walk out ("dine and dash" style). The passenger can also make a call to dispatch and not show up for the ride. Instead, the passenger maintains a relationship with Uber, and the driver doesn't need to handle any payments.
> Medallion systems often prevented any competition, sometimes to absurd effect. The number of licenced taxis often didn't keep pace with population growth, sometimes even staying flat.
And thus medallion owners collect economic rent on their artificially scarce resource, distorting the free market. https://en.wikipedia.org/wiki/Economic_rent