“This is clearly not something we need the government involved in,” Sundararajan says. “If someone is charging too much, the customer will go to a competitor.”

Basic regulations still have value — to make sure that Lyft and Uber drivers have insurance, for example, or that houses listed on Airbnb comply with fire codes.

Many of today’s rules, however, seem designed to protect existing competitors. St. Louis’ taxi code, for example, requires the commission to consider “whether existing vehicle for hire service is sufficient to properly meet the needs of the public” before granting a new license.

“This sort of clubby protection, you don’t need it to protect consumers,” says Glenn MacDonald, professor of economics and strategy at Washington University’s Olin School of Business. “Creating monopolies is rarely a good idea.”

He calls the commission’s battle against Lyft “a textbook example of the old technology trying to use the government to prevent competition from a new technology.”

If that’s true, Sundararajan believes it’s a losing battle. “Pretty much all of taxi-like services are going to be provided by firms like Lyft and Uber,” he says. “The new model seems superior in pretty much every dimension except driver expertise, and the drivers will go to where the business is.”

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