Uber Über Regulation? Regulatory Change Following the Emergence of New Technologies in the Taxi Market

Summary

Can emerging technologies transform not only markets, but also foster new regulatory change mechanisms? In the context of prevailing theories of regulatory change, this article explores the extent to which an interest-based explanation can account for the regulatory responses toward emerging Transportation Network Companies (TNCs). Based on a primary cross-city analysis of the 40 largest cities in the United States, the study found that although the existence of ex ante interest groups indeed somewhat limited the extent of ex post regulatory acceptance of TNCs, regulators seemed to prefer the newcomers over existing incumbents and approved TNCs in 77.5 percent of the examined cities, rarely pursuing harsh enforcement even when TNCs operated illegally. The research attempts to explain this intriguing phenomenon by extending the interest-based approach to account for the key role played by “technological regulatory entrepreneurs.” The entrepreneurs bridged collective action barriers by becoming the central agent that managed, and reaped the benefits of, the collective action, by lowering the organizational costs and by disseminating information effectively and turning consumers into political campaigners, thus successfully promoting regulatory change.

Keywords: interest-based theory, regulatory change, technological regulatory entrepreneur, transportation network company, Uber.