A little while back, I hired a taxi under the new regulatory regime.

My sister was living in Santa Monica at the time. One of my best friends and I met at her apartment with the intention of walking the length of Sunset Boulevard in one day. To start, we would take a taxi about 20 miles to the eastern terminus of Sunset, near Dodger Stadium. We expected a relatively pricey ride that wouldn't be so bad split three ways. I was shocked, as someone who'd taken a lot of cab rides in New York and Washington, D.C., at how fast the numbers were changing on the meter. Seeing that the total would be outrageous we told the driver that he should either drop us at a bus stop or negotiate a discounted rate. Finally we agreed he'd take us at a substantial discount: $80 for the ride.

I can still hardly believe it.

* * *

I have no expertise in city planning or transportation. But in 2009, at around the same time that municipal experts in Santa Monica decided that the future of taxis in their city should be five companies with fixed fleets and a consistent, expensive fare structure, I was blogging about a different idea: Based on a chance conversation with a friend and a few minutes of speculation, I suggested that GPS technology and credit cards could enable most anyone to act as a taxi driver. One of my colleagues independently suggested that existing taxi fleets should use GPS.

Neither of us knew at the time that some savvy entrepreneurs were already way ahead of us. A couple months prior, Uber was founded in San Francisco. Along with competitors like Sidecar and Lyft, they'd radically improve urban transportation. Right now, if I wanted to be taken from the beach in Santa Monica to the easternmost terminus of Sunset Boulevard, I could do it in a shared Uber for a flat rate of $15 or my own private Uber for a sum significantly less than $80.

To what extent do Santa Monica residents prefer these apps to old-style taxis? According to the most recent available data, the five taxi companies permitted to operate in the city saw more than a quarter of their business evaporate between 2013 and 2014, even as the city's population grew and tourists continued flocking there. If you can find a Santa Monica cab when Uber is surge-pricing—at rush hour or right as the bars are getting out on a Saturday night, for example—it might be the better option. Most times, Santa Monica cabs are harder to find and more expensive.

In other words, city officials locked in an inferior model.

Luckily for residents, Uber and Lyft are regulated at the state level by a regime that limits the restrictions municipalities can impose, so Santa Monica officials weren't able to stymie an innovation that never would've arisen from within its system. In a more rational world, the foregoing events would've caused city officials to recognize the limits of their expertise and the harm regulation can do in this sector.