The Turkish President, Tayyip Erdogan, has just closed down Uber in that country. In the process he’s shown, once again, that he doesn’t really quite get how market economies work nor why we use them. The aim is to find out what the consumers want, not what the producers do. Thus if someone launches a service, produces a good, which people want we should let them get on with it. Not close it down because other producers complain. To do that last isn’t a market economy, it’s corporatism:
Turkey’s president Recep Tayyip Erdogan has said ride hailing app Uber is finished in Turkey, following pressure from Istanbul taxi drivers who said it was providing an illegal service and called for it to be banned.
We don’t say that if GM complains about the competition then Ford should be closed down. Quite the opposite in fact, that GM is upset by Ford shows that the latter is doing something right. Producing cars which people prefer to those of GM perhaps. We think that’s a good thing:
Erdogan’s statement came after new regulations were announced in recent weeks tightening transport licensing requirements, making it more difficult for drivers to register with Uber and threatening a two-year ban for violations.
“This thing called Uber emerged. That business is finished. That does not exist anymore,” he said in a speech in Istanbul late on Friday.
Sure, we get it, the taxi drivers are pissed at the competition. But that’s the entire point of allowing people to compete, the idea behind that market economy thing:
Uber said that about 2000 yellow cab drivers use its app to find customers, while another 5000 work for UberXL, using large vans to transport groups to parties, or take people with bulky luggage to Istanbul’s airports.
The basic ground rules of how it should be are pretty simple. Our aim, our desire, is for the people – you and me – to have as much of what they want as it is possible for them to get. What can be produced, and how, is a constantly changing feast. Thus we want people to be able to enter the market an offer new things. Or even old things in a new manner. It is in this way that we find out that sweet spot of what can be produced that people actually want to have produced.
And that’s it, that really is it.
The system, of course, not working if those who do things the old way are able to prevent people from offering whatever it is produced in the new.
Erdogan’s banning of Uber in Turkey is an idiot economic decision. It’s also likely to be a pretty popular political move. But that’s just further proof that we shouldn’t be allowing politics to determine the economy, isn’t it?