I’ve recently started using Uber for transportation when traveling and wanted to share some of my impressions.
Every ride I’ve taken so far has been faster and easier to obtain, cheaper and more convenient to pay for, and more pleasant than a taxi. I think one reason for the last observation is that the drivers I’ve had feel like they’re working for themselves and not for somebody else. The ability to choose your own hours and be your own boss is worth a tremendous amount to most of us.
I had a particularly interesting conversation with an African-American driver named June who took me to the Dulles Airport last week ($38 from downtown DC). June told me that she had a regular full-time job Monday to Friday 9:30 to 5:30 and worked as a driver for Uber before going to work in the morning to earn some extra money. She was quite the Uber evangelist, telling me it was the greatest part-time job. She said she’d talked dozens of people she knew into becoming drivers as well.
June told me about an incident when she was parked near the airport and a conventional taxi driver came up to her and reproached her for taking food off of his family’s table. He picked the wrong Uber driver to have this argument with. June responded that she was born in America (the taxi driver was an immigrant), that she had lived here all her life, and that she had every right to earn a living and make herself better off. Who was he to tell her she couldn’t do that?
I asked her what she was doing with the money she was working so hard to get. She told me she had a dream of starting her own transportation services company. She sees a real need for better ways for people with disabilities get around, and hopes that the company she’s going to start can help fill that need.
More power to her.
Interesting anecdotes. What do you think of the relevance of the driver’s comments about being American born while the taxi driver was an immigrant?
It is interesting that the taxi and Uber drivers are fighting each other when each should instead be looking upwards, taxi drivers towards the the taxi companies which in many locales keep a disproportionate amount of the revenue, and Uber drivers to Uber, which by some reports could be worth $70 billion http://www.vox.com/2014/12/4/7336433/uber-worth-
I like UBER a ton but Where are the regulators for the drivers? I know regular yellow cabs do whatever they want regulators or not but at least they have them in place.
“She sees a real need for better ways for people with disabilities get around, and hopes that the company she’s going to start can help fill that need.”
Ironic since one the the many laws that Uber violates is provisions to provide transportation for the disabled that taxis must provide by law. Uber is facing many lawsuits for drivers refusing to accept people in wheelchairs or blind people with service animals.
Uber is a lawless company that continues to operate illegally. It is a symbol of the libertarian dystopia of unregulated capitalism that the sociopaths envision.
The only reason Uber exists is that people like June have such poor regular jobs that they have to bow and scrape for part time work just to make ends meet. A large pool of poor laborers is key to Uber’s business model.
Uber is the brave new world of no health insurance, no retirement, no sick pay, no vacation time, no workers comp for injury, no unemployment benefits, and no social security matching. The new capitalism means all risks are on the workers and all the profits go to the the Uber owners.
The “joys” of the new “independent contractor” are a cruel joke. They are simply laborers who have been stripped of all agency or protections. The redefinition of laborers as independent contractors is one of those capitalist euphemisms like collateral damage, ethnic cleansing and enhanced interrogation.
You go, Joseph. This is exactly why I do not use Uber either. Also, there are too many damn cars on the road as it is, and Uber just puts more of them out there. If you are in LA or Atlanta, you know what I mean. If you live in those cities, and you use Uber, whose drivers circle and circle, sometimes dozens within a few square blocks (check the App, which I deleted before ever accepting a ride), don’t complain about the traffic.
This sort of argument doesn’t actually make a case. You are just thoughtlessly applying labels. For example, it is merely descriptive to say “A large pool of poor laborers is key to Uber’s business model. ” Obviously, it offers no normative clarity. You might as well say that custodial services only exist because of a large pool of poor laborers.
If Uber is handicapped with taxi cartel regulations, then is public welfare improved? Consumers would be impaired, but maybe the benefit to taxi drivers, and the remaining Uber drivers, outweighs the negative impacts on the public and the excluded Uber drivers? You forgot to include these arguments, as well as arguments, in your rant.
I stil ride a horse because it’s important to me that we protect the livelihood of blacksmiths.
Your heart is in the right place, blaclsmithing is a helluva job, but have you considered how unfairly the regulators are favouring horses already?
No grass tax v gas taxes for cars
No licence v state driver licencing with drivers’ ed costs
No seatbelts, crash testing or safety regulations.
Oil drilling is heavily regulated with strict environmental controls whereas grass is allowed to grow anywhere and so is basically free.
Please don’t give too much business to horses, they might ask for free healthcare next.
You don’t know the half of it. You want to talk about horse subsidies? Let’s talk property tax. http://www.citypaper.com/news/features/bcpnews-all-the-pretty-tax-breaks-millions-in-tax-dollars-prop-up-marylands-beloved-but-failing-horse-indust-fea20150616-story.html
@ Joseph – Something like 85% of taxi drivers are classified as independent contractors. Out of the 15% or so who are classified as employees, very few receive healthcare benefits.
I’m ambivalent. Back in the late 80s we had a service in Mpls that could have been an Uber if the tech had been there. You needed a Towne Car to sign up to drive. We liked it. We called into the dispatch. Our favorite driver picked us up. She asked us when we wanted to be picked up. Notable there was a long line of Towne Cars lining the street outside the gay dance club at closing time.
But as Joseph notes, taxis were required to respond to hails on the streets. In other words, they had to pick up black people, or lose their licenses. They had to drive to the North Side. They had to pick up people with mobility impairments. The taxi lobby got the Premier Cab service thrown out of town on those grounds.
I don’t like the cabs in many cities. I don’t like that they are dirty, they don’t know where they are going half the time. I don’t like that what you end up paying seems like it’s too much for what you get. But I understand that taxis are public transportation. And they need to serve the needs of the public.
Uber may finally make the established taxi cab industry, with its monopolistic poor service and high prices, obsolete.
Welcome to the 21st century. Eventually, anyone driving a car can make some extra money driving a few blocks out of the way.
I’m sure, a firm like Uber will place better controls than anything government can implement.
i have used uber a couple of times before, and i did find it convenient and cheaper than a regular taxi. i think the uber response time will definitely push the standard taxi business. i prefer regular taxi on business, but uber is good for very short rides. one issue that seems apparent to me is accidents and insurance. my understanding is uber covers liability-so the passenger should be fine. but they do not cover collision for the uber driver. and most personal insurances will not cover collision if the vehicle is being used for business purposes. this puts the uber driver in a bind. either buy business collision insurance, or self insure. while it is a small percentage of drivers in an accident, i think there is definitely a hidden cost in the uber model that over time passengers may come to disgust. when actually insured for collision, uber may not be the profit maker for drivers that appears in this article.
Hands down Uber is better! I use Uber a few times a week. If it was not around I would not be using a cab. Cabs are wildly inconvenient and very expensive. I live in downtown Denver and Uber allows me to not own a car. I can get most places I go for $4, which is the minimum charge. It costs $2.75 just to get into a cab here. I typically expect a cab to cost just slightly under double an Uber.
Take a look at some of the usage graphs. In most cities that use Uber, taxi usage has declined very slightly while Uber usage has skyrocketed, showing that Uber is a good enough product to attract new users, not just displace existing cab drivers. I consider myself one of the new drivers.
Everything about Uber is better, from the price to the convenient ordering experience to the car tracking system that allows you to track the Uber to your door. #Capitalism
Owners of cab companies don’t like Uber because it threatens their revenue. Simple as that. They are used to lobbying to maintain their market power, not having to compete for it. I deserve my money more than a cab company owner deserves my money.
Uber is not so popular in Norway, due to the strong lobby of the taxi companies here. But some inventive guys here have started NABOBIL (https://www.nabobil.no/), which translated in English means “neighbour’s car”. One can rent a car directly from those who have registered. It is also ensured by some of the insurance companies in Norway.
The best Empanada I have even had was from a street vendor in Bogota, Colombia. I remember as a kid going to the beach and buying ice cream from vendors on bicycles riding up and down the beach (now gone because of the required vendor’s license). The government pretends to be our mommy and daddy saving us from the entrepreneurs, but in truth it is the government who picks our pockets and puts us in danger – for example who is the biggest polluter in the US.
The cool thing about the gig economy is that individuals can have multiple gig options, switching between them (dog walking, grocery delivery, post office runs, uber, lyft…). Also extremely efficient in the labor/leisure sense, and great for folks going to school who might have odd hours. The only downside is for folks who want to control others lives, since the gig economy allows a scary amount of freedom. My uber to and from the airport is 1/2 the cab fare. 5 minute wait each time.
Yes, the taxi companies are all the bad things said about them. However, that does automatically not make Uber a good answer.
Uber exists because drivers like this need to work a second job to get ahead.
Uber is cheaper in part because they don’t have to comply with pesky requirements, the sort of stuff that no one misses until it is gone., and was put there in the first place because its absence was a problem.
So, great, Uber will tear down the taxi industry. Just like offshoring tore down the manufacturing industry and Walmart destroyed Main Street. But then what?
This is not unlike privatized/outsourced government services. Somehow, despite appearing cheaper in the short run, turn out to be both more expensive and worse service in the long run. Eventually needing to be rescued by the public, again.
Freedom! Choice! Deregulation! Lower cost! There are all euphemisms for the Lowest Common Denominator economy.
How low are we willing to go? How low can we set our expectations – for considerations besides price and convenience?
Looks like we are going to find out.
U.S. real manufacturing output has increased even in this depression:
And, the U.S. has more shopping malls per capita than any other country.
You can thank globalization and firms like Walmart later.
Of course, we can go lower with more taxes, regulations, and lawsuits.
It’s not a question of output, it’s a question of employment and wages here in the USA. That’s in the toilet, thanks not insignificantly to Walmart.
If regulations are going to kill us, why aren’t we dead? Corporate profits, top tier wealth ,the stock market, all through the roof. In fact, manufacturing output is up (according to you) why hasn’t all this regulation destroyed that?
Meanwhile, taxes are the lowest they have been in three generations.
Walmart reduced prices substantially to raise real incomes and freed-up limited resources, including employment, through efficiencies and economies of scale, to expand the economy.
Taxes have become more progressive, particularly between low and middle income workers. Tax revenues are low, because the country is in a depression. Regulations, which tend to be regressive, are high. Lawyers are making a killing. No wonder more businesses are being destroyed than created.
How does Walmart raise real incomes? That whole section is a platitude, not a point.
Tax rates, real effective tax rates paid, are the lowest across the board they have been in generations. Doesn’t matter how much income those rates are applied against – low recession wages for the middle class, or high bailout wages for the elite – tax rates are as low as they have been in decades. Complaints about taxes in 2015 America are so far removed from factual and historical basis as to be truly bizarre.
Regulations are indeed regressive, often at the behest of large corporations who can afford compliance, this is an argument against monopolies and an argument for regulating and restricting large corporations more intensively.
Deflation in sectors of the economy where there isn’t heavy government involvement raise real incomes.
A CBO study showed in 2010, the top 40% paid about 110% of income taxes, while the bottom 40% paid about negative 10% in income taxes or received an average of $19,000 in “transfers.”
I’m sure, it’s worse now, and Obamacare doesn’t help.
So, your solution to regulations causing destruction of smaller businesses, raising the cost of production, reducing national income, etc. is more regulation on larger businesses.
If you possess even a basic understanding of corporate subsidies, tax preferences, and Fed policy, then you are well aware that the rich are reaping vast amounts of transfers themselves, far more, by orders of magnitude, than the bottom 40%.
Are you one of those libertarians that only sees welfare when its directed at the poor?
“June told me about an incident when she was parked near the airport and a conventional taxi driver came up to her and reproached her for taking food off of his family’s table. He picked the wrong Uber driver to have this argument with. June responded that she was born in America (the taxi driver was an immigrant), that she had lived here all her life, and that she had every right to earn a living and make herself better off. Who was he to tell her she couldn’t do that? “
I’m sure that JDH is delighted to have poor people fighting over scraps to provide him with cheap services. The fact of the matter is that the gig economy is the poor people’s economy. A job without benefits is a not a real job. An “independent contractor” has the wonderful freedom to be poor (but not sleep under bridges) — a libertarian dream.
Funny how JDH likes the idea of breaking up the “monopoly” of low priced cab drivers. Not a word about the “monopoly” of high priced services like doctors and lawyers. What about the monopoly of pharmaceuticals? If I go to Canada and buy cheaper pharmaceuticals on the market and bring them back across the border into the U.S., they will arrest me and put me in jail for violating their monopoly. Yet billionaires at Uber headquarters for some reason are free to break all the laws and regulations in every city and country in the world with impunity. Obviously this isn’t really about monopolies. This is about class warfare.
What makes people poorer is when workers are paid well to dig holes and fill them up again; excessive taxes, regulations, and lawsuits that create a disincentive for entrepreneurs and investors to work and take risks; government borrowing to pay people not to work, etc..
It’s not Uber’s fault.
I agree with JDH’s characterization of Uber rides. I’m one of those people who uses Uber for situations in which I would have not called a taxi, For example, I was recently at an auto mechanic having my car serviced and I was told that it would take 2 hours. I had expected 20 minutes and I didn’t want to wait for 2 hours. I pulled out my iphone and summoned uber from the app. The app knew where I was and accurately predicted that my driver would arrive in 2 minutes. I was shown his car and what he looked like by the app. For a very low fee, I just went home–which was just 10 minutes away–to wait the 2 hours. And for a very low fee, I came back again to the garage. I would not have used a taxi for that–too expensive and too much trouble. But I was willing to pay a convenient low fee to avoid sitting at a garage for 2 hours. I know many people who use Uber for situations in which they would not have called a taxi.
To take another use case, I once broke down on the side of the highway on a major holiday while I was driving a long distance. I had to pay the tow truck driver’s father a very large sum of money to take me to an airport where I could rent a car. There were no taxis available. With a service like Uber, I would have had more options.
Besides the added comfort and convenience of services such as Uber, I’d mention some another important benefits: safety and protection from fraud. We’ve all been in wild taxi rides, especially in big cities, in which you are not sure that you are going to arrive alive. And we’ve all been taken on the “scenic route” when the taxi driver suspects that we don’t know the city. Uber’s technology protects passengers from both. If I don’t like the way my Uber driver drove, I can easily give him a poor rating in the app, which becomes public knowledge. Similarly, if I’m a poor passenger, I will also be rated by the driver. Uber uses technology to establish a reputation for both drivers and passengers in a way that conventional taxis can’t. Moreover, Uber generally provides much better insurance for accident coverage than taxis do. And because Uber’s app knows where you are and where you are going, it can calculate the fare upfront, eliminating the driver’s incentive to take you on the “scenic route.”
Drivers love Uber as well because it opens up employment markets that didn’t exist. Many people need a second job but the problem with conventional jobs is the inflexibility of the working hours. With Uber, you can work when you want and precisely tailor your work schedule to suit the other demands in your life. Many parents who handle the primary child care can’t work part time for example since they might have to unexpectedly be available if a child is sick, needs to come home early from school, etc. But if they are Uber drivers they can always just stop working temporarily to do whatever it is they need to do.
People talk about services like Uber “disrupting” traditional businesses such as taxis and car services. But much of the hostility to services like Uber is that they disrupt the regulatory state. Services like Uber demonstrate to people that you really don’t need all the regulation to provide a safe, fair, efficient transportation service. The market can do it better without any need for the politicians. No wonder so many politicians want to shut it down.
It may be true that Uber opens new markets for short trips. Great. It is also certainly stealing business from the taxi companies for longer hauls, which within itself is not reason for tears.
Uber may well serve to force taxi companies to provide better service and accountability. Great.
But this is necessary NOT because of the evils of regulation of taxi companies. It is necessary because the realities of monopolistic capitalism, which lobbied for the state to create barriers to entry to limit competition for the dominant incumbents. It is the government’s refusal to step in and break up monopolies that is at the heart here, which is what always happens when a company succeeds themselves into a position of power. Consumers alone were clearly not powerful enough to break up monopolistic taxi companies, and the government refused to do so.
Uber is in its early wide-open stage, and all the Libertarians are giddy. But it will absolutely, guaranteed outcome, eventually centralize and commoditize, and prices will go up, service will go down, drivers will get more screwed, and a series of scandals, frauds, and accidents will eventually lead customers to demand that their government regulates the service.
Yes, you are right that originally the taxi cab medallions were designed to limit competition. Taxi cab medallions were a depression-era device (the 1937 Haas act) designed to limit the number of taxis, thereby driving up prices and wages. Only later, they were given a regulatory interpretation.
But this is often how it goes. Deposit insurance was also a depression-era device to protect smaller banks from bigger banks. Roosevelt actually opposed it. But now, when you read about it people mistakenly claim that it was a depression-era policy to eliminate bank runs.
I would like to get rid of all these policies that use the power of the state to limit competition.
But I’m much more optimistic than you about services such as Uber. I don’t know what will happen to any particular company but what’s important is that we are witnessing a new technology that puts buyers and sellers together to create markets that were impossible before. We’ll see new and amazing services that will make us all much better off.
I mean taxi medallions in NYC by the way. Different cities have their own histories.
So, Uber helps to increase the number of transport services that someone can afford . This must be good to combat climate change indeed.
A friend experienced the same thing just last night. Husband and wife had a flat tire. Took the car to a repair shop. Husband needed to go to work and called Uber to get to work. If there had been no Uber he would have called in reducing real productivity. The Uber driver made income, Uber made income, Uber overhead employees made income, and my friend made income. All contributed to the economy which is what real free markets are all about.
ricardo, how would that outcome have been any different if your friend had called a taxi instead? if the taxi cost more, it simply distributes the income in a different ratio.
Its less cars driving around, not more. And apparently less DUI, at least my students tell me this. Uber drivers can sit in Starbucks or McDonalds and wait for a call. Taxis in NY drive around way too much. Seems like net would be less car miles, not more.
The taxi business became too extractive: medallion owners maximized return by shifting risk to drivers through leases whose structure forces drivers into short term maximizing of that night’s revenue at the expense of service and maintenance or cleanliness. A driver has to make enough to pay that lease rate. And the medallion system places value on keeping the number of cabs low to make each medallion worth more. The combination of extractive leases and limited medallions reduces the quality and quantity of service, and that opened the door to Uber and Lyft etc.
Yes, there are so many possibilities for creation of services that didn’t exist before. For example, it’s very hard not to have a car available in most circumstances and most people have at least one, even if they hate to drive. Many people arrange their lives so that they can bike or walk most places but they have to have a car to go to the supermarket, doctor’s appointments, shopping, etc. But now, many people can ditch their cars and use a driving service. For many people, this will be a cheaper and more pleasant option.
Sometimes people drink much more than they expected. Rather than drive home, they can easily call the driving service, which will save lives. Driving services can expand into other areas such as package delivery. Also, the handicapped will have much better transportation options.
The uber phenomenon is much bigger than driving. What uber demonstrates is that when everyone is walking around with a handheld computer connected to the network, markets and trades can exist that were impossible before. The barrier to these markets and trades was the large transaction costs, but now these costs are much, much lower. Markets and services that are as of now undreamed will be developed.
Critics often focus on the alleged harm to the drivers themselves–they don’t get benefits, they get exploited, etc. But the critics fail to consider the alternatives to an Uber-like part time job. Most retail and fast food jobs now use scheduling software to schedule their workers. This software uses data to predict the optimal number of workers that should be on site at any particular time to maximize profits. Practically, this means today’s low wage worker has very little flexibility. Schedules can change very abruptly at the whim of the scheduling algorithm and you can be dismissed early one day and be asked to work all day on another, regardless of your other obligations.
The scheduling software employed by retailers and restaurants is demand based: if the software measures that demand for the product or service will be down on a particular day, it will reduce the work schedule. But the new uber-like scheduling software is both demand and supply-based. That’s much better for workers. I would think these demand and supply based scheduling algorithms will see more widespread application than in just driving, putting competitive pressure on the demand scheduling algorithms that don’t consider worker needs so much. Ultimately, all lower wage workers will be better off.
We know that vigorous competition improves the lives of workers more than any government programs ever will. And competition fosters improved service and productivity. Uber is already forcing the traditional taxis to improve their service. London taxis are using the smartphone app Gett and NY cabs are experimenting with Arro. We just need to get out of the way and let capitalism work.
So much for secure economic property rights…..