Call it an uber-example of regulation, or an example of uber-regulation, or just the regulation of Uber; it is a problem whose analysis requires delving into the ideology of Rhode Island’s governing class. Uber is a service that matches cars and drivers to riders who want a single trip someplace. Vehicles arranged by Uber belong to a category that Rhode Island law calls “public motor vehicles”, which are treated differently from taxicabs. (Steve Frias has a good op-ed on the history of vehicle rental regulation in Rhode Island in today’s Projo. Prepare yourself not to be shocked).

In 2012, Rhode Island enacted a law enabling the Public Utilities Commission to set a minimum price for trips provided by public motor vehicle services (though the law exempts “service coordinated by or paid for by a state department” from the minimum — really). The PUC initially set a $40 per-trip minimum charge; enforcement has been suspended pending a lawsuit. Uber says that minimum-pricing of this magnitude will make it economically impossible for them to arrange trips they otherwise would be able to.

I know there will be immediate objections that this issue is too narrow for broad notions of ideology to matter, that we don’t need to go to a concept like economic “rights” to determine the sensibility of the legislature, that the PUC’s deliberate handicapping of Uber is very obviously a matter for cost-benefit analysis and rational ordering of regulatory resources. But it is obvious that “economically sound” or even “minimally thought out in terms of the general welfare” reasoning isn’t at the top of the thought process of Rhode Island government officials who have been making decisions about Uber — even though most would claim to believe in these ideals to one degree or another.

If naked self-interest can explain the actions of a few government insiders who might benefit from keeping Uber away, their number is too small to explain why majorities in the legislature and on the Public Utilities Commission decided to implement minimum pricing for public motor vehicle rentals. There’s no great moral question at stake concerning whether people should be allowed to rent cars for single trips, nor public hazard created by Uber that is greater than any other motor vehicle arrangement. Car rental will go on, whether the government of Rhode Island government decides to make things difficult for Uber or not.

The decision to regulate Uber becomes a bit more understandable (though not necessarily more optimal), if we step back from considering it in isolation, and consider it instead as one example of the type of action that the organization making the decision tends to favor. Rhode Island’s public officials decided they wanted a taxi-cab business sector unhampered by competition from public motor vehicles. Literally, they do not want one set of commercial relationships to replace another. This is a close parallel to the decision that a business organization might make, for any number of reasons, to stick with an old vendor over a new one who offers to provide a similar service on slightly different terms. Indeed, “parallel” may not go far enough in describing how similar the decisions are.

Within a conventional business structure, most transactions are contingent on approval from the managing hierarchy. Likewise, government leaders may come to view themselves as a final authority over a broad swath of economic transactions, if they believe that fundamental economic arrangements, such as private property or the freedom to contract, are based on something less than rights belonging to every individual. (For a full analysis of how economic rights have been downgraded by certain strands of contemporary liberalism to a stature less than that of cultural/political rights, see the recently published Free Market Fairness, authored by Brown University Political Science Professor John Tomasi).

Officials in government who hold such a view obviously place themselves at or near the top of the hierarchy; how far they believe the “organization” they “manage” extends is a separable question.  When analyzing a business organization, the scope of an organization is reasonably easy to define, but in a governmental context it is heavily colored by a key dimension of political ideology, basic beliefs about the relationship between individuals, groups and society. In general, the possible attitudes run from an idea that everyone’s most important social relation is a single collective that everyone must belong to; to the idea that smaller groups of people are most fundamental, with these groups active in creating units above and giving meaning to individuals below; to the idea that the individual is truly the entire story, with ideas like “groups” and “society” being mostly a shorthand for describing particular relationships at a given time.

The positions that 1) society is inherently a single collective and that 2) there are no economic “rights”, just parameters about an acceptable scope of economic arrangements that have been approved by the rulers of the collective, can combine in the minds of ruling officials into a belief that government has the same latitude to make decisions that a corporate chain-of-command makes for his or her organization — with the organization defined as all economic activity in society.

In Rhode Island, the ideological dynamic is magnified by an oligarchical legislative process. The more issues that legislators have to consider in a compressed amount of time, the less ability they will have to fully consider the merits of any particular issue, and the more they will fall back upon basic ideology when making decisions. In this environment, arbitrary decisions like imposing a minimum price on public motor vehicle rental will be implemented as they would be in a top-down business organization, with the consideration that someone up the chain of command wants something done receiving inordinate weight over whether the decision makes sense or not.

The “pragmatic” alternative to this, the alternative which seriously values applying ther broadest consideration of costs and benefits that’s possible, is to allow the folks who will be involved in an economic arrangement to have as direct a say as is possible about what the terms of the arrangement will be. This is synonymous with recognizing and defending a set of economic rights that all citizens possess.

And about that state exemption to public motor vehicle pricing that I mentioned at the top of the post: Managers always need their perks, that others don’t get!