Battle for the Car Service Market

One of the most recent potential examples of a free market at work is the smart phone based car services, which is currently upending the well regulated taxi-service.

Uber and Lyft are two of the main companies in this market and are currently competing for dominance.

Over the last two days, the rivalry between Uber and Lyft has been making headlines, and accusations between the two are fliying.

Uber seems to be slightly well positioned, however. Not only do they have a several year head start, they are also valued substantially higher: Uber is valued at 17 billion at least, and Lyft is valued at around 700 million. But a head start in this competition and larger war chest, are not the only two things Uber has, they also now have an executive from their company advising the Pentagon on best business practices from the private sector.

Emil Michael will be joining the Pentagon’s Defense Board. It is not Michael’s first time working with the government. He servered as the special assistant to Defense Secretary Robert Gates from 2009-2011.

At this time, however, it is unclear whether or not his position on the board will give Uber an advantage. As the Wall Street Journal reports- “Uber has no direct ties to the Defense Department, but the appointment could be viewed as recognition of the company’s prominence in using technology to uproot a highly regulated and entrenched taxi industry. Uber, which is valued at more than $18 billion by investors, is aggressively pushing for a key role in the future of urban transportation.” 

Only time will tell how this battle for the car based services will play out. But because the Keating Center believes in the power of the free market, we will definitely be paying attention.

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