Uber, the black swan of taxis

Abstract

Uber, Easy Taxi, Taxi Beat and the other taxi services offered via platforms for interconnection between taxi drivers (or private drivers according to these apps) and passengers have shown to be beneficial not only for their users but also as a true invisible hand for third parties unrelated to each transaction. Thanks to these applications, there is less traffic jam and fewer taxi drivers wandering the streets. However, in practice, these platforms get involved in unfair competition for breach of regulations, because the city ordinance regulating the taxi service in Lima Metropolitan Area does not allow innovations in the service. Is the solution to eliminate platform services? No. The solution is actually to modify the rules.