Free Market

Ridesharing Companies Eat Away at Taxi Marketshare in Salt Lake City

A report before the Salt Lake City Airport Advisory Board this morning revealed that ridesharing companies Uber and Lyft have put a significant dent in the marketshare previously monopolized by taxis.

Just five months ago, only 14% of ground transportation at the airport was serviced by Uber and Lyft drivers. Since then, that number has increased to 26%.

These companies faced significant hurdles in become legally enfranchised. As first revealed by Libertas Institute, Salt Lake City imposed $6,500 fines on drivers who were discovered using a secret shopper program. Ironically, one of these secret shoppers hired to punish the new companies actually preferred them over taxis.

Political pressure mounted in favor of ridesharing, leading the legislature and city council to revise the laws to enfranchise these disruptive services. Following the deregulation an agreement was made between the companies and the airport, and since that time drivers have been able to legally operate.

Market disruption such as ridesharing is often controversial as upstart companies must navigate through a barrier of protectionist laws designed to shield the established industry from their competition. Utah’s constitution demands a free market; the difficulties government imposed upon these companies and their drivers clearly demonstrates that elected officials have been unwilling to abide by that rigorous constitutional provision.