New York state politicians think they can and should pick winners and losers in the private sector. But their record is clear: They’re really good at picking losers.
Before the legislative session ended, lawmakers had the opportunity to open up the state to thriving businesses, but they didn’t. They decided to continue picking which industries and businesses succeed or fail. When Albany tries to select winners, New Yorkers always lose.
First, state lawmakers wrapped up the 2016 legislative session without resolving how ridesharing companies like Uber and Lyft can expand outside of New York City, missing their chance to bring in much-needed jobs and better services.
This alone would be a cause for concern, since it denies New Yorkers one of the sharing economy’s most successful industries. But, Albany wasn’t finished. The Legislature also passed a bill preventing Airbnb users from advertising entire apartments for rent for less than 30 days.
On its face, it may look like the Legislature is trying to chase business out of the Empire State. But this isn’t an anti-business crusade. Airbnb, Uber and Lyft are just part of the wrong industry.
While lawmakers were busy building roadblocks for the sharing economy, they were also giving hundreds of millions of taxpayer dollars to other ventures. New York is willing to hand out $50 million a year in tax subsidies for music and video-game producers and $420 million for TV and film production.
Picking winners and losers is certainly bad governance. New York is also extremely bad at it.
Businesses that receive Albany’s financial support have a tendency to flop. The state has spent hundreds of millions to support General Electric, a notoriously flighty company that tends to chase tax privileges. GE’s Durathon battery plant in Schenectady, a recipient of 2013’s “JOBS Now” capital funding, closed down in 2015. Albany doubled down, committing another $50 million to convince GE to put another factory in Utica. Not exactly a shining record of success.
Economic growth, we’re told, will follow these investments. But private-sector employment in the state grew at barely half the average US rate during the last year. And what’s more, most of this job growth was limited to New York City and its suburbs.
Bringing jobs and opportunity upstate is not as difficult as Albany makes it look, but ongoing efforts to stifle the sharing economy show that lawmakers are more interested in playing politics than setting sound policy.
Expanding ridesharing across New York would provide new job opportunities, as it has done nearly nationwide.
Taxi drivers in Rochester and Albany have protested bringing ridesharing to areas outside New York City, claiming passengers are less safe riding with Uber and Lyft, and that they cannot adequately provide for disabled passengers.
Albany seems to be receptive to these arguments. Yet it’s becoming increasingly clear it shouldn’t be.
In addition to providing passengers with safety features unavailable in taxis — pictures of drivers, maps of the trip, ETAs, driver ratings, vehicle descriptions and license-plate numbers — recent research shows that competition from Uber makes taxis better. Using data from the New York City Taxi and Limousine Commission, Georgetown’s Scott Wallsten notes that the rate of consumer complaints about taxis decreases as ridesharing becomes more common.
The best thing for upstate taxi passengers may be Uber’s expansion outside of New York City. Reforms must embrace the changes that are already taking place and allow cab companies to improve, rather than entrench their outdated business practices.
All New Yorkers — not just city dwellers — deserve the opportunity to choose the type of services they pay for, whether it’s who picks them up, where they stay or where they work. And New Yorkers deserve the economic boost that the sharing economy provides.
Unfortunately, lawmakers appear to have missed their chance, and they will have to wait until next year. It’s time Albany realized picking winners and losers is easier than they’ve made it. They don’t have to pick at all. They just have to get out of the way.