[danieltillett]

Yes but once they reach a certain size they will need to transition from regulator arbitrage to a model similar to the one the current taxi system. Once this happen they will be as vulnerable to the next scrappy upstart as the taxi industry is. Either domination or regulatory arbitrage has to give.

[eru]

They'll change from arbitrage on the current regulation, to having a say in the next regulation and living cosily in it.

Side question: why do the new regulations have to be similar to the current taxi system? Uber doesn't need eg a medallion system, they'd be happy with onerous legal (eg reporting) requirements to keep upstarts out.

[danieltillett]

Sure Uber might be able to help write the new regulations to their advantage, but at that point they will be open to attack from upstarts who choose to ignore the regulations. They need not only write the regulations and then be able to get them enforced to keep the upstarts out.

The new system does not need to the same as the current medallion system, but unless the new system is providing them with a competitive a means of keeping upstarts out the market will become one of perfect competition where profits all end up with the consumer.