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Last night, my wife had a stomachache and asked if we could take a taxi home from work rather than the metro. I’ve had mixed experience with cabbies and — given the combination of high price and great unpredictability — I avoid taxis wherever I can. Still, I wasn’t the one with a stomachache, and a few extra dollars is a small price to pay for a happy and comfortable wife.
I was all ready to hail a cab when I remembered that I had a $20 credit toward my first ride with Uber, the online driver service/app, so I decided to give it a try. Result: I’m never taking a cab again.
Uber isn’t a taxi company, so much as a marketplace that directly connects willing drivers and clients. Its drivers are independent contractors, and — after passing a background check, an online customer service test, and showing proof of various documents — can begin taking clients through a mobile app, setting their own hours, and choosing clients wholly at their own discretion. Uber takes 20% of the fare, provides drivers with a special iPhone, and offers liability insurance. It’s currently available in 100 cities and has gotten itself into a number of highly public disputes with taxi companies and local governments that, depending on your point of view, either regulate the industry or unnecessarily restrict access to it.
What’s wonderful about Uber and similar services is how transparently entrepreneurial and voluntary they are. Uber drivers have full discretion in choosing their clients and no obligations with regard to the hours they keep. When an Uber driver responds to your request, you know he wants to be there and provide the service you requested within an agreed-upon price range (how those ranges are set has led to another controversy). The app is incredibly user-friendly: the fare was charged directly to the credit card I’d registered with the service, and I was automatically emailed a receipt that detailed the route, duration, and charge for the trip, as well as an invitation to rate the driver (a stand-up guy; I gave him five stars).
With the possible exception of eBay — though even it lacks the interpersonal nature of Uber — I can’t recall a more elegant and efficient demonstration of how free markets are supposed to work: one party is willing to trade money for a service while the other is willing to trade the service for the said amount of money. Then they both leave with something they valued more than what started with. Everyone wins.
As Elizabeth Nolan Brown argues in Reason, it’s just one of the more visible aspects of a growing trend of technology-assisted markets allowing more people to act like entrepreneurs even if they are — legally speaking — freelancers:
It’s fair to assume [that functional entrepreneurship] has increased, considering economic realities and all the attention paid to the rise of what’s often called the “sharing economy.”…
[A]n under-appreciated aspect of this economy is how it puts self-employment, of sorts, in many more people’s reach. Sure, companies like Uber, Lyft, and AirBnB (to name just a few prominent examples) are making things easier for consumers. And they often come with neat origin stories, too. But they’re also allowing individuals “to bring their marginal capital and/or labor into productive use,” as the R Street Institute put it. They’re granting more workers more autonomy.
And more kinds of workers, too. Since the entire transaction is logged, mapped, and date-stamped online — along with everyone’s name and contact information — Uber has a number of safety features cab companies currently lack. This not only appeals to female passengers, but also appears to have opened the driving industry to women.
Markets aren’t perfect, but they can do amazing things when allowed — both for those selling and those buying. Republicans could do worse than choose easy-to-understand examples like Uber when making that point.
Image Credit: Flickr user Adam Fagen.