Enabling disruptive innovations: a comparative case study of Uber in New York City, Chicago and San Francisco

Abstract

Abstract Much research on disruptive innovations has focused on firms that disrupt existing industries. Yet, regulators and lawmakers are instrumental in containing or enabling market disruption, in ways that are less understood. This article examines taxi industries in New York City, Chicago and San Francisco between 2010 and 2014 to better understand the role of regulators and lawmakers in enabling Uber to disrupt these industries. Relying on 142 interviews, ethnographic observations and primary source documents, I show that regulators and lawmakers used two strategies in responding to Uber: blocking and incorporating. Blocking refers to measures that stop a firm from entering the industry. Incorporating refers to adding, subtracting or modifying regulations to align with an innovative firm’s practices. I identify three incorporating strategies: horizontal venue shifting, vertical venue shifting and reinterpreting existing regulations. Analyzing these strategies more clearly illuminates regulatory change mechanisms and lawmakers’ and regulators’ role in enabling disruptive innovations.