something's rotten in Manitoba, Toronto, Edmonton and other jurisdictions which are cracking down on Uber

Despite vows by the Selinger government (Manitoba), the City of Toronto, the City of Edmonton and other jurisdictions to crack down on Uber, the renegade company is making baby steps into the Canadian market much to the horror of medallion owners and the delight of consumers.  The struggle by the daring taxi company to breach this strictly licensed industry demonstrates how far Canada has devolved into a mercantilist economy where tightly controlled economic fiefdoms and not free market competition are the rule of the day; where economic analysis is generally more of a post hoc rationalization for grants of monopoly privilege than a principled examination of marketplaces and their mechanisms.

The two main problems with the taxi industry as it exists presently are that prices are fixed, not freely fluctuating and that licenses are artificially restricted.  The former hurts both both consumers, drivers and owners and the latter hurts consumers and drivers but benefits those who own taxi medallions (owners).  Prices fixed above the market clearing price (the intersection of supply and demand) mean you will have an unsold surplus.  Prices fixed below the market clearing price mean shortages.  The City of Edmonton has attempted to address this somewhat by charging a higher fixed price for rides during peak times on weekends but this is only a tiny step in the right direction; much better would be to allow taxi companies to set their own rates.  A freely fluctuating price system is at the heart of the market economy.  An increase in demand, ceteris paribus (all other things being equal), means a higher price.  This higher price signals to entrepreneurs that resources need to be redirected to this area of the economy.  These smoothly fluctuating prices are what effortlessly enable the economic calculation of the capitalist economy.  Restrictions on price fluctuations will necessarily result in dysfunctional markets.

The restrictions on licensure benefit those lucky enough to own a taxi medallion - a tiny elite group - but harm consumers, who pay higher prices because of this artificial limitation on supply, but also harm drivers who must rent use of the taxi from the license holder.  Better still to do away with the licensing system all together and let anyone who wants to drive a cab, drive a cab, in whatever vehicle they can obtain.  And why not?  Why must we inflict higher prices on taxi consumers - often relatively vulnerable members of our society, like the elderly and the disabled - just to benefit to select few?  So instead of criminalizing Uber we should hail them as the saviors of the taxi market which they are.  Let's deregulate the taxi market and enable freely fluctuating prices and open entrance for anyone willing to drive.