How to Uberize an industry

Actually, not so much a how-to, just a concisely formulated insight about one of the key ingredients to Uber’s success. Arnold Kling writes:

I think that is the real key to Uberizing an industry. Take a business where the public has come to fear unregulated service providers, and find a way to overcome that fear before the incumbents find a way to use the political system to stifle the business.

Commenter Handle comments:

That’s probably the trick for future enterprises like Uber which are trying to arbitrage the rents created by some legal licensing regime. Find things to do that the prosecutors won’t prosecute, because they really dislike the status quo and really need and love your service.

Indeed, if there is any hope long-term for our system of government not going completely off the rails with accelerating ideological insanity, it is the fact that bureaucrats will tend to naturally – and even in the absence of any communication and coordination – do their part to resist reforms that will harm their own welfare, by making them too costly and time-consuming to enforce, whatever the black letter law may say about it.

Emphasis mine. The first sentence I am having trouble processing. I don’t see immediately how it can be described as arbitrage. Or perhaps it is the phrase “arbitrage the rents” that does not compute at the moment. The second sentence nicely captures a truth about a formal/informal duality of law, or law’s administration.

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