Sunstein on the Uber Train

Since I work in regulatory affairs, I find the topic of regulation interesting and have written about it often. In December I wrote a piece for Red Alert Politics about how burdensome regulation of taxicabs in New York was stifling innovative products like Uber from entering the market. The foundation of my argument:

Regulators always convince themselves that they are protecting the public from evil capitalists, but they rarely do. Bureaucrats become more concerned with maintaining their own power, which necessarily means capitulating to entrenched interests, than doing what is in the best interest of the public. This stifles innovation, entrepreneurship and capitalism itself.

In April I discussed Cass Sunstein’s new book Simpler: The Future of Government. Sunstein, a Harvard Law Professor, was the director of the White House Office of Information and Regulatory Affairs, the most important agency most people have never heard of. His view of regulation, rooted in the notion that cost-benefit analysis is a preferable metric by which we should decide whether to adopt a regulation, is summed up in his book:

I sought to focus instead on these questions: What do we actually know about the effects of proposed rules? What would be their human consequences? What are the costs and benefits? How can government avoid reliance on guesses and hunches? What do we know about what existing rules are actually doing for — or to — the American people? How can we make things simpler?

Sunstein agreed with my perspective on taxicab regulation (specifically as it pertains to Uber) more eloquently than I ever could in a recent Bloomberg column:

In countless domains, people have to spend a great deal of time and effort on searching and matching. For auto repairs, home repairs, household help, tutors and even child care, it can be difficult to find a convenient and reliable service. Wouldn’t it be a great improvement, indeed an amazing boon to people (and the economy as a whole), if a wide range of services, available on simple apps, emerged to decrease the costs of search?

Because of the happy combination of new technologies and private entrepreneurship, that possibility is getting more realistic every day. We shouldn’t allow pointless regulatory barriers, and self-interested private groups, to delay its time of arrival.

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