Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
Practicing Capitalism without a License
Uber is a classic disruptive technology. The ride-sharing app has revolutionized the moribund taxi cab business model by providing better service for a lower price. The Uber model is so new that existing taxi regulations by local governments are, in many cases, inoperative.
This upsets bureaucrats greatly. Who does Uber think they are to improve the lives of consumers and providers without getting government approval first? Exhausted at the wait for the city of Portland to rewrite its rulebook to allow the popular service, Uber launched today without the city’s blessing:
“I don’t think we’re going against the city’s wishes,” [Uber’s Brooke Stever] said. “We hope the city embraces this and listens to their constituents, the people of Portland and drivers partnering with us.”
Drivers often supplement their income by moonlighting with Uber, using their own vehicles. But Portland and other cities have regulations that classify Uber in the Town Car category, meaning riders must wait at least an hour after scheduling a ride before the driver shows up and paying a premium price over what cabs can offer.
In a (nominally) free country, why must citizens ask permission from the government before serving their fellow citizens? Uber has decided to ask forgiveness later instead of seeking permission first:
“We feel it’s our duty,” she said. “It’s the holidays, a popular season to go out, there are a lot of DUIs. We really feel like now is the right time, we want to meet the public’s demands and meet safety needs of the city and offer one of the safest and reliable rides around.”
“I love this model, your neighbors driving you around,” said Uber driver Eric Hansen. “That’s what this is, anybody with a few hours a day to make some extra money.”
Good for them. Now it’s up to the Portland bureaucrats to see if they want to kick Eric Hansen out of his holiday job and force their voters into overpriced cabs.
Published in General
What’s the city’s cut of cabs/town cars? If anything, I’d bet the city is trying to find the right mechanism to tax the service.
Here in crony capitalist Anchorage, the city council members and mayors have been trying to outdo each other in outrage over the arrival of Uber. So great was their whining that they got a temporary injunction placed against it. Local unions were predictably outraged at the arrival. It reminded me so much of the Holy Grail where the townspeople demand that the witch be burned on the flimsiest of suspicions.
I’m curious. How much cheaper is Uber? I just got a quote from my house to jfk and it was 39 to 52 dollars. The going black cab rate is 30 – 50. Where’s the savings?
I just checked lyft as well. The price is the same. What’s going on. People act like it’s so much cheaper. Is it really?
That’s completely irrelevant. The important thing is that Uber uses a cell phone app and that it’s disruptive. Stop questioning progress!
I’m a student who moonlights with Uber in a college town. The city initially gave the ride-sharing service its blessing; the taxi unions had less sway. The taxi companies have since pushed back but unsuccessfully thus far.
I can understand the complaint of the cabbies who purchase expensive tokens and licenses in order to operate. However, the lesson is not expand the regulatory burden and bureaucratic bloat to include Uber, but reform the ossified system which sent customers seeking an alternative and into the arms of entrepreneurs who provided them one.
Uber has what it calls “peak times” where demand spikes, and the app multiples the price charged for a ride accordingly. It is less expensive to use Uber on a Tuesday afternoon than a Friday night, let’s say. Generally though, riders have told me that the service I provide is nearly half as expensive as the local cab service. Plus, my car is clean and comes with complimentary bottled water and Altoids (’cause that’s how I roll).
Where do you roll? I actually imagine it would be cheaper other places. Cabs tend to be the same price as NYC everywhere.
I find cabs in the city to be hit or miss. Some are clean some are not. However, california car service two blocks from my house is still my favorite.
Additionally, Black cars have peak fares too and a couple companies have their own app.
It is so disheartening to me that Uber is even an issue. It just shows how massively over-regulated we are and how far we have strayed from individual freedom. Though Uber may not like it, it should be made the symbol for all conservatives wishing to combat government overreach.
Narratives….
I think the Uber is being used by both sides of the political aisle to further narratives good and bad. Uber is not the plucky start up frustrated by silly local licensure laws, they are a well connected start up that thinks they can ignore local laws because they are new and hip.
Its going to be a bumpy ride.
In behalf of bureaucrats: Challenge accepted.
This is the model of our system of crony capitalism. Government adopts regulations which effectively grant a monopoly to some group of businesses. This raises prices and creates economic rents. Government then splits the rents with the “regulated” businesses by taxing them or imposing fees – to grab part, but only part, of the rents. The businesses get the rest. This creates a group with a vested interest in maintaining the system. The government benefits. The businesses benefit. Only the consumer suffers.
As a member of the state bar of California, I have benefited from this system. Benefited greatly, in fact, because the state bar’s monopoly on legal services is strongly enforced, and because lawyers are taxed much less than, say, taxi drivers. (Maybe because most legislators are also lawyers? Duh.) I have benefited, but I don’t have to like it. And I don’t. Go Uber!
About 35 years ago Filipinos in SF started using vans to take people between the airport and the city. They could be personal, like a taxi (take you where you want) and take multiple riders like a bus, and therefore were much cheaper than taxis. They fought the city for a while and lost. About 25 years ago, foreigners were doing the same thing from Narita into Tokyo. Great if deal if you have a lot of luggage. They didn’t last long either. PRACTICE CAPITALISM WITHOUT A LICENSE! GO UBER!
Uber is centralized, and once they get big enough, will eventually attempt to use government to impose rules that keep competitors out.
Here’s an interesting future scenario to ponder:
A driverless car is programmed with software to perform Uber-like functions. All of the car’s decisions are automated, even filling up with gas. It accepts bitcoin for fares, and uses that money to pay a gas station attendant to refuel itself (of course, a driverless car refueling station need not have a human attendant at all).
Because it’s not a free country.
I just spent an hour swapping out a bunch of incandescent lights for LED lights and dimmers. I’m forced to do this because our government has decided that it’s best for me. I have no choice, due the regulations they’ve passed.
Well, I suppose I do have a choice: I can sit in the dark, or pay the electric bills that keep going up thanks to Obama’s War on Coal…
I agree with Ozzymandias about reforming the system.
Meanwhile, in a lot of places, it’s not the cabbie him/herself who buys the medallion (which can cost upwards of $1,000,000), or the car, or pays the taxes, insurance, and cost of regulatory compliance. The cabbie rents the hack by the day or week (the cost of all of the above, plus profit for the cab company is rolled into the rental price) then gets out and scrambles to make a living. Last time I asked a cabbie (20 years ago or so) he had to pay $90/day and had to buy his own gas.
If I were a cabbie, I would be very unhappy that someone can parachute in out of nowhere and undercut me. Short of being police or active duty military in a combat zone I can’t think of any other job where you are at greater risk of violence than being a big city cabbie.
Pro tip: Unless the cabbie is a jerk somehow, give them a big tip [especially if you’re travelling on expenses]. That extra $5 doesn’t really mean that much to you but it will mean a whole lot to the cabbie.
Now imagine if they dared to sell single cigarettes…
In NYC Uber has less of an advantage b/c cabs are so abundant and relatively cheap. In SF a taxi to SFO is ~$50. An Uber is $35. Taxis in SF are IMPOSSIBLE to get. You can call them and they may come at some point. The real advantage is not price but certainty. You can watch the car arrive and you get a text when it is outside your house. The car will be clean, the driver already has your destination plugged into his GPS, you can play your music on his stereo w/ Spotify and the car is ad free.
The drivers are often musicians, artists or single moms who love it b/c it gives them a flexible way to make good money. Some of the drivers are franchising by buying small fleets and renting them out to other Uber drivers who don’t have cars. My favorite conversation was w/ a young, charismatic African American man. He claimed that he set a money record at Uber by making the most money in a single day. “What do you want to be?” I asked, “A millionaire” he responded. He was making more than 6 figures working 7 days a week as a 20 y/0 and he was on his way to buying a small fleet. “You’re gonna hear about me,” he said as I walked out of his car.
I jumped into the comment thread with the express purpose of seeing how long it’d take for this to come up.
There was a recent Freakonomics podcast exploring the expansion of Uber. The best line (paraphrasing) regarding cities’ opposition to Uber was that fundamentally, it is a service that offers insufficient capacity for graft and corruption.
Uber is certainly not cheaper here in Philadelphia. It’s about 18 dollars more to the airport, and about 20% more on average for a normal trip around the city. (This is “non peak” pricing.)
However, it’s a very nice car, a very pleasant driver, on demand and reliable. I take it about 50% of the time over a regular cab- but it ain’t cause it’s somehow cheaper.
Here in Western New York state, I get depressed at the frequency with which some new idea is greeted with, “Are they allowed to do that?” There is quite the underlying assumption that people should be allowed to do only that which the government has specifically permitted. Ugh.
Taxis are not quickly available in Flyover Country Suburbs. Uber responds fast, gives responsible drunks an easy alternative to driving, and provides jobs to the low motivation semi employable. I really really want Drunk Drivers off the road (I support the Death Penalty for the 2nd DUI conviction) and anything that gives the drunk or stoned a easy convenient alternative to driving is great in my book.
Sometimes the comparison is not like-for-like. In many cities, Uber has only launched their standard service, which is actually the equivalent of a limousine. They do also have other services that are more akin to the normal taxi. What I have typically found is that the standard (ie. Limo) service is a little more expensive than a taxi for similar routes, while their discount services are about 20-30% less expensive.
I agree, however, about the rationale for taking it. I typically find that I actually want to have a conversation with the average Uber driver.
Here in Reno, Nevada,undercover police busted 51 Uber drivers and their cars temporarily impounded. I wonder how much it cost to that?
Taxi cab companies pay for the right to have taxis. The medallions are expensive ($100 grand in San Francisco, I believe). If Uber-like taxis became legalized, would or should taxi companies be compensated for their taxi rights cost. Is this considered a ‘takings’? What is the resolution? Let taxi companies eat the cost?