The biggest concern is maintaining a consistent and high quality service.
For example, if the market was to become saturated with drivers undercutting the market, it is plausible that some drivers would be forced out of the market as they are unable to make enough to sustain themselves. If this happens to enough 'regular' drivers the service may become irregular and the goal of providing accessible, consistent public transport (or whatever the goal is) suffers.
I guess what I am saying is that a completely free market _might_ actually harm the market in the end. We expect free markets to self-correct, but are we willing to accept sub-par services whilst waiting for that correction?
I have seen this concern in the taxi market in Canberra Australia. Taxis there are tightly regulated, and the numbers are kept low to make sure it is profitable. Their numbers have recently been increased to try an accommodate the increased Monday morning and Friday evening rushes as more people are flying in and out every week. The traffic during the rest of the week has remained fairly constant. This means that profits are lower and so some taxi drivers are getting out of the business. In a free market it's possible that this inflation of service providers could happen unchecked for a time, before it is realised that there is not enough consistent work to support the new drivers. The possibility for extreme fluctuation in service provision is high, and this could have terrible consequences for anyone who happens to need a taxi home on a Wednesday evening after too many drinks at the pub.
It is hard to say for sure if a free market would deal with the irregular nature of taxi business in that city better than a regulated market, but I think it is clear that the purpose of a taxi system could be at odds with the outcomes of a free market. A free market could fluctuate between too many and too few providers, removing the reliability that is essential in an effective taxi service, even though the regulated service might provision a greater than optimal service cost.
Uber is a premium service that is more expensive than the typical overpriced cab. If service is undercut, something like uber can pop up to provide reliable and quick service. I've gotten an uber cab in 3 minutes at 1 am during pride weekend and 5 minutes in north beach during a sunday morning. Uber is near instant in SF.
For example, if the market was to become saturated with drivers undercutting the market, it is plausible that some drivers would be forced out of the market as they are unable to make enough to sustain themselves. If this happens to enough 'regular' drivers the service may become irregular and the goal of providing accessible, consistent public transport (or whatever the goal is) suffers.
I guess what I am saying is that a completely free market _might_ actually harm the market in the end. We expect free markets to self-correct, but are we willing to accept sub-par services whilst waiting for that correction?
I have seen this concern in the taxi market in Canberra Australia. Taxis there are tightly regulated, and the numbers are kept low to make sure it is profitable. Their numbers have recently been increased to try an accommodate the increased Monday morning and Friday evening rushes as more people are flying in and out every week. The traffic during the rest of the week has remained fairly constant. This means that profits are lower and so some taxi drivers are getting out of the business. In a free market it's possible that this inflation of service providers could happen unchecked for a time, before it is realised that there is not enough consistent work to support the new drivers. The possibility for extreme fluctuation in service provision is high, and this could have terrible consequences for anyone who happens to need a taxi home on a Wednesday evening after too many drinks at the pub.
It is hard to say for sure if a free market would deal with the irregular nature of taxi business in that city better than a regulated market, but I think it is clear that the purpose of a taxi system could be at odds with the outcomes of a free market. A free market could fluctuate between too many and too few providers, removing the reliability that is essential in an effective taxi service, even though the regulated service might provision a greater than optimal service cost.