More of that in a moment. Meanwhile, 'ride sharing' is the generic term for new variations on taxi services that the internet has fostered. And what's happening to California's taxi services is a version of the familiar struggle that occurs when the 'economic rents' - ie, getting something for nothing - of an established operator are threatened by the disruptive technology of newcomers. In this version - which is also being played out in many countries, including the UK - the established operators are the taxi drivers, their trade bodies (in London, for example, the Licensed Taxi Drivers Association) and, arguably, the regulators who are supposed to ensure a level playing field for service providers and customers. The best-known newcomers are all from San Francisco - Uber, which is heavily backed by Google, plus Lyft and Sidecar.
The struggle has gone global largely due to Uber's ambition and appetite for confrontation. It came to London big time in June when the capital's cabbies blockaded its streets to protest against the decision by Transport for London - effectively the regulator for taxi services - to allow Uber to operate.
Granted, it's unfair to caricature Uber et al as the free-thinking innovators and the established operators as luddites. London's black-cab drivers have happily embraced Hailo, an app that links them to customers. It was launched in the capital in 2011 and has expanded to Ireland and the US. Yet there is a crucial difference between Hailo and Uber. The former helps cabbies get business; the latter permits competitors to muscle in.
Which is why Uber and its lookalikes have received such a barrage of protest. In London, the cabbies' core complaint is that Uber is illegal because only they are allowed to calculate fares using a meter, yet Uber's drivers use their mobile phones as a meter. Technically, the cabbies may be correct (although it has not been legally tested), but do customers care? In addition, they complain that bookings with Uber are made via a Dutch company that pays no UK tax (but Uber is just an agent, taking 20 per cent of a fare); that its 'price surge' system can produce expensive fares (true, but variable charges can effectively match supply with demand); that there are safety issues about travelling with unlicensed drivers (sounds familiar; cabbies used to say that about mini-cab operators).
Objections such as these are irrelevant or fatuous, yet they are effective. Initially, Berlin welcomed Uber, then the screams of protest got so loud the city's regulators changed their mind. Ditto California, or that how it is looking since the state's utilities commission decided Uber's services presented "a continuing threat to consumers and the public". Transport for London, the capital's transport regulator, seems minded to let Uber drivers ply their trade, but gives every impression of being terrified of the taxi drivers' association.
Who can blame it? A massed rank of angry taxi drivers is a terrifying sight. But that's true of all who have a vested interest in protecting the privileges from which they derive their 'rents'. Logically, few services should be more open to competition than taxis. All that's needed is a car and a driver. Yet the developed world over - especially in its big cities - taxi services are over regulated and under supplied.
What's true of taxis applies to many services. Insiders always have an incentive to create a cartel and there is no better way of doing that than producing a bundle of legally-enforceable regulations that 'protect' customers. Thus, for example, the Land of the Free has built up its very own licence raj where over 30 per cent of workers need a licence to do their job compared with about 5 per cent in the 1950s. In a country where - depending on the state - florists. interior designers, manicurists and dog walkers need a licence without which they are working illegally, it must be a synch for taxi drivers to protect their cartel.
But that's what the west has become and it's what Stanford University academic Francis Fukuyama bemoans in his latest book. Mr Fukuyama is to be taken seriously. Twenty years ago his much-praised study of the triumph of western democracy, The End of History and the Last Man, turned out to be as wrong as it was eloquent. To which failure Mr Fukuyama responded with The Origins of Political Order and now Political Order and Political Decay (Profile Books). In this work he despairs of US politics which is in thrall to a 'vetocracy' - rule by powerful minorities via a veto over policies they dislike, however sensible.
Taxi drivers know all about that. They are just one more symptom of the underlying ill. So why do I bore readers with this? Because it is the backdrop against which we invest and which makes the task all the tougher. Just get used to the idea.
