Ride-sharing apps are bad, actually

I love an incurious essay and Matthew Yglesias' recent one on why Uber is actually good as an attempt to snipe at the left is one of the more stunning examples in recent memory. I want to go through his argument then talk more generally about why this sort of analysis is particularly noxious.

Let’s start with a key thrust of Yglesias’ essay:

Uber's success should be celebrated.

The company's "clever arbitrage around municipal taxi regulations" broke Big Taxi, a series of taxi cartels which relied on business models that prioritized inefficiency and anti-competitiveness. Uber has improved prices, led to great social outcomes (e.g. reducing drunk driving and racial discrimination in pickups), and at minimal cost (namely traffic congestion).

Yglesias starts with an article that American University law professor Hilary Allen wrote for the Law and Political Economy blog titled “Why We Need to Stop Subsidizing Venture Capitalists” where she opens:

For many readers of this blog, Uber represents a cautionary tale. While the company attributed its initial success to cutting-edge technology—such as dynamic pricing, matching algorithms, real-time data—subsequent analysis has demonstrated that its growth was largely driven by ignoring, breaking, and then bending taxi regulations to suit its business model.

For companies in the fintech sector, however, Uber’s approach represented a blueprint to follow. From lending to payments to stock trading to crypto, prominent fintech businesses have found a competitive edge not in technology itself, but in using narratives about technology as a smokescreen for the profitable arbitrage of financial regulations. This modus operandi is encouraged by Silicon Valley’s venture capitalists, who decide which businesses to fund and often provide advice, gin up hype, and lobby for the businesses they’ve chosen. Our society continues to shower VCs with public subsidies, but as I argue in this brief post, if regulatory arbitrage is what we’re getting from Silicon Valley’s VCs in exchange, it’s well past time to reconsider this relationship.

Yglesias only quotes the first paragraph (more on that later) but responds to it with:

What I want to talk about here is not Allen’s forward-looking argument, which focuses largely on fintech issues. But the breezy way in which she asserts that Uber is a “cautionary tale” and assumes her audience will agree without argumentation. She thinks the fact that Uber busted up the old regulatory system and got a whole new category of companies legalized is a