{"id":1243,"date":"2014-04-23T12:56:32","date_gmt":"2014-04-23T11:56:32","guid":{"rendered":"https:\/\/blog.iese.edu\/economics\/?p=1243"},"modified":"2015-03-17T11:54:33","modified_gmt":"2015-03-17T10:54:33","slug":"the-fight-against-creative-destruction","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/economics\/2014\/04\/23\/the-fight-against-creative-destruction\/","title":{"rendered":"The Fight Against Creative Destruction"},"content":{"rendered":"

Uber<\/strong><\/a>\"Capture<\/a> \u2013 an app that links private taxi drivers with customers \u2013 has encountered several roadblocks around the world<\/strong>: a Brussels<\/strong> court<\/a> banned it, a Berlin<\/strong> court ruled that the taxis are rental cars and must therefore return to their place of business between each fair,<\/a> Paris<\/strong> briefly instituted a rule that an Uber cab had to wait for 15 minutes before picking up a passenger regardless of how far apart the two initially were, and the company has run into similar bumps in the road in several American cities<\/a><\/strong>.<\/p>\n

At the same time, New York City, Paris and Berlin<\/a>, are all restricting the use of Airbnb<\/a><\/strong>, an app analogous to Uber, but for short-term rental of private apartments<\/strong>. In New Jersey the sale of Tesla<\/a><\/strong> electric cars might soon come to a halt<\/a> because of an obscure ruling mandating that cars should be sold through independent car dealers and not directly from producer to consumer<\/strong> as Teslas are.<\/p>\n

\"Detail<\/a>
Detail of Airbnb homepage<\/figcaption><\/figure>\nWhy such zeal from local city halls and court rooms in regulating the conduct of business? <\/span><\/a>\u00a0It seems that this is just the latest installment of the age-old wheel of \u201ccreative destruction\u201d<\/strong>: whenever a new product or service is invented<\/strong> – whatever may be its benefits – there will be both winners and losers<\/strong>. One could argue that it is the job of politicians everywhere to balance the costs and benefits of new innovations and block those that do not benefit society as a whole. And that the consequences for those who have long been employed as taxi drivers, in the case of Uber, should be given extra weight.<\/p>\n

It seems that in practice, however, the interests of the incumbent taxi companies, hotel owners and car dealerships have much greater weight than the potential gain to local consumers and new companies<\/strong>. As Mr. Leipold, the chairman of Berlin\u2019s taxi association, put it, \u201cThis isn\u2019t a student start-up against a big taxi cartel. Uber is backed by Google<\/a>. If I\u2019m wearing gym shorts, I don\u2019t want to compete against someone wearing hobnailed boots.\u201d<\/p>\n

If incumbents indeed believe they have the right to only compete against student start-ups it seems we might have too little and not too much \u201ccreative destruction.\u201d<\/strong><\/p>\n

\"E-commerce<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Uber \u2013 an app that links private taxi drivers with customers \u2013 has encountered several roadblocks around the world …<\/p>\n","protected":false},"author":886,"featured_media":1248,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71736,1386],"tags":[81622,81624,38921,78785,58169,40363,81621],"class_list":["post-1243","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","category-trends","tag-airbnb","tag-local-regulations","tag-mobility","tag-new-technologies","tag-start-ups","tag-tesla","tag-uber","megacategoria-mc-economics"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t