Over the medium to long term the only way a firm or a small group of firms can maintain a monopoly is if it has the backing of the government.
If a firm in a free market attains monopoly status, and this can happen, it won’t last as new firms with better equipment, techniques etc. will enter the market. If however a firm can get in good with the government, then the monopoly firm can get its politician buddies to regulate away competition.
(From Real Clear Markets)
Taxi drivers in Paris rioted recently in protest of the presence of the ride-sharing company Uber in France. Similar taxi protests have occurred in Sao Paulo, Brazil, and other cities around the world. Government regulations historically enforced rules that created taxi monopolies in most cities, justifying these rules as a way to protect customers from being overcharged for trips. However, 21st century technology has overtaken 20th century regulations. It’s time to deregulate city taxi markets and let the competitive process work, which benefits consumers.
Ridesharing technology protects taxi customers from being overcharged or receiving poor quality service. Users pay using a credit card, can view the most direct route to their destination on their smartphone, and read reviews of the driver’s service record before accepting the ride. Consumers love the ride-sharing companies because they provide fast, low cost, and quality service that is often better than traditional taxi service. Taxi companies are asking governments to impose rules on the ride-sharing companies in order to protect themselves from this new and better service.