Taxis versus Uber: The Global Rise of Platform Firms in Urban Mobility Markets
The last few decades have been characterized by the return of market liberalism: the belief that national societies and the global economy can and should be organized through the institutional mechanism of ‘self-regulating markets.’ The liberal ideal may well be exemplified by the rise of platform firms that offer the promise of perfect markets through computational techniques of connecting buyers and suppliers. These firms use algorithmic processes to construct and aggregate fragmented markets, thus capturing scale economies through network effects. The allure of platforms lies in the promise of economic efficiency and political liberty by providing market actors on both sides of the platform with freedom of choice. These technologies constitute a claim to modernity that is compelling to both policymakers and the public, enabling platforms’ role in the radical transformation of cities, while presenting a range of vexing challenges for democratic forms of urban governance. Platform firms claim to be technocratic and neutral even as they challenge the legitimacy of public sector control of urban spaces. This lecture focuses on the entry of ridehailing platform firms in urban mobility markets, spaces that are a variegated mix of large-scale, centralized public sector providers and relatively small, fragmented and often informal private sector players. Ridehailing’s ‘disruption’ has generated diverse reactions in different political economies and labor markets in the developing and industrialized world, but a common outcome is the concentration of power in oligopolistic platform firms, the institutionalization of increasingly precarious conditions of work, and the generation of resistance ‘from below’. The research suggests that ‘traditional’ centrally planned urban mobility systems such as taxis and mass transit, and ‘modern’ urban mobility platforms thus constitute alternative modes of market governance. Yet they rely on enabling legal rules that structure the distribution of power and authority as well as material gains and losses. The role of law is intertwined with three classic dualisms in the study of markets that shape the economic order: the dualism between markets and planning, formality and informality, and monopoly and competition.
Jason Jackson is Associate Professor of Political Economy in the Department of Urban Studies and Planning and Director of the Political Economy Lab at the Massachusetts Institute of Technology (MIT). Jason’s research is broadly concerned with the relationship between states and markets in processes of economic development and social transformation. Jason is currently engaged with projects on the role of anti-colonial economic nationalism in development; the rise of platform firms, the digital economy and the future of work; the return of industrial policy; and the global governance of public health. He is author of the forthcoming books Traders, Speculators, and Captains of Industry: The Role of Capitalist Legitimacy in Indian Foreign Investment Policy (Harvard University Press) and Varieties of Economic Nationalisms in Brazil and India (Cambridge University Press).