Cronyism could be behind Memphis order against Uber, Lyft

By Watchdog.org Chris Butler | Tennessee Watchdog —— Bio and Archives July 21, 2014

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MEMPHIS — Most Memphis residents already know that city officials, citing public safety concerns, imposed cease-and-desist orders against private ride-share companies Uber and Lyft. But city officials were possibly acting in their own interests instead.

Memphis officials have a strong incentive to help cab companies beat back any competition, said Justin Owen, president of the Nashville-based free market-oriented Beacon Center of Tennessee. “There have long been cozy relationships between taxi companies and cities all across the country,” Owen told Tennessee Watchdog. “Taxi industries typically lobby for and receive substantial regulations, which sounds counterintuitive, but they know that they can meet those regulations and others can’t, so it makes it more difficult for their competition to come in.” Taxi companies, Owen said, have the power to pressure city officials to defend their market and crack down on competition. Ride-sharing services such as Uber and Lyft allow people to use an app on their smart phones to contact private drivers, instead of taxis, for their transportation needs. These private drivers usually aren’t professional drivers, but they instead are people from other walks of life, such as students, artists or retirees looking to make ends meet, said Lyft spokesman Chelsea Wilson. More...