UberHop in Toronto- Monopoly or legal, cheap transportation?

Jake Edminston’s article TTC launches legal review to see if Uber’s new shuttle service, uberHOP, infringes on its monopoly in the National Post addresses Uber’s new UberHOP system, which will send SUVs and vans to collect up to six riders and ferry them to the finanial district at $5 a person. This service will be available from 7-10 a.m. and from 4:30-7 p.m., price discriminating the rush hour flow of workers. This incredibly cheap service may be problematic in the face of The City of Toronto Act, which specifically prohibits anyone other than the Toronto Transit Commission from operating a local transport system. TTC lawyers are reviewing the legality of this new service now.

“This expansion of ride the ride-sharing empire comes after aggrevateed taxi drivers staged a major, citywide protest last week, calling on Toronto and provincial lawmakers to regulate Uber.” Edminston reports. However, Toronto Mayor John Tory thinks it would be impractical to shut down the service. Uber Canada spokesperson Susie Heath responded to earlier criticisms, stating that the new project is “an easy way for commuters to share their trips with other commuters and help reduce traffic congestion in our city.” While facing some backlash, it seems inevitable that Uber will continue to expand.

This case example illustrates how a monopoly such as Uber is driving out the Toronto Transportation Commission because of far superior convenience and prices. Normally when businesses compete to become a monopoly, the government may step in to prevent full ownership of a market. However in this instance, a private firm is competing against a public service. This illustrates the majority of the public’s preference for convenient private services that are driven by incentivized growth, rather than a bureaucratically controlled service which often is less efficient.

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Amazon is NOT a Monopoly

Amazon has achieved a level of dominance like a monopoly, however, it is not a monopoly. Amazon has a lot of power and they could use that power to hurt America’s economy. In 2013 domestic e-commerce sales added up to 263 billion dollars. To prove Amazon is acting illegally one would have to prove that Amazon is raising prices and curtailing on supply. In 2013, Amazon has 274 million in net income from 74.5 billion in sales (profit margin of .37%). Former columnist Matthew Yglesias characterizes Amazon as a charitable institution that benefits consumers. Amazon is not just a retailer it lets third-party companies sell on its website. The third parties companies profit all combined it ends up being more profitable than Amazon alone.

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