EDITORIAL: Let market, not regulations, determine Uber’s future

Uber is back in business in Nevada. Whether it remains in business is up to the transportation network company.

Uber, as well as ride-sharing competitor Lyft, activated service a week ago, its operations licensed by a new state regulatory system but still lacking a Clark County business license. Both companies use smartphone apps to connect people who need a ride with drivers available for hire. And both companies use a pricing structure that increases when demand for service rises.

As reported by the Review-Journal's Richard Velotta, last weekend was Southern Nevada's introduction to Uber's "surge pricing," and many customers didn't expect to pay more than a typical taxicab fare to get to and around the resort corridor. One rider reported paying $101 for an 11.5-mile trip from Southern Highlands to the Hard Rock Hotel. Ouch.

Meanwhile, Uber drivers are receiving 75 percent of fares, not the 80 percent they were promised a little more than a week ago, and learning they'll have to obtain a bevy of business licences to collect fares. A pay cut and big fees right out of the gate might not go over too well with a chunk of the more than 1,000 drivers Uber says it has approved.

But customers and drivers always have the option of not using ride-sharing services. Passengers can wait for a cab to save money, and drivers might decide they have better options for earning extra income. If they do, they'll create new market conditions that will require Uber to adjust through reduced fares and better driver compensation.

This is how market-based competition is supposed to work. Nevadans have transportation choices they didn't have only a few weeks ago. Making those choices makes them winners.