Making Money the Old Fashioned Way

This would be hilarious were it not also tragic (HT: Coyoteblog). PickupPal is an internet site that allows would be carpoolers to meet online and coordinate travel plans. Drivers post when and where they are going, while passengers post where they want to go and how much they are willing to pay. Sounds like an ideal win-win situation—the folks save money, gas, and reduce congestion. However, not everyone was thrilled with PickupPal, and an Ontario bus company sued alleging that PickupPal operated as an unregulated transport company. The bus company won. The Ontario Highway Transportation Board fined PickupPal $11,000 Canadian dollars and ruled that ridesharing is only legal if it is between home an work, does not cross municipal boundaries, and is with the same driver each day (who can only be paid no more frequently than weekly).

While prosperity springs from multiple sources, at its core lies the amount of freedom that people have to exchange with one another. When this freedom is circumscribed by legal boundaries, then society is almost always worse off. Of course, while we as a society may wish to limit some exchanges (arms dealer and terrorist for example), restrictions like those placed up PickupPal are both silly and destructive. The bus company is better off, but the good people of Ontario now have a slightly lower standard of living. We may laugh at this example, but all over the world consumers have their choices by similar legal boundaries. Paradoxically, most of these laws are championed by “consumer advocates,” who advocate for consumers by limiting their choices. Needless to say, companies are more than happy embrace laws that protect them from additional competition. While the title of the article is “I’ll Never Let Canada Live This Down: Evil Carpool Startup Fined,” I cannot help but think that we will see PickupPal sued south of the border soon. Cities and states won’t stand for the loss of revenue or the lucrative practice of selling taxi cab monopolies. The excuse will be lame—probably something having to do with quality or the service will be blamed for the inevitable traffic fatalities or some sort of carpooling serial killer—but it will come; and we will all end up a little poorer.