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Don't Sass Your Uber Driver - He's Rating You Too
HughPickens.com writes David Streitfeld reports at the NYT that people routinely use the Internet to review services from plumbers to hairdressers, but now the tables are turned as companies like Uber are rating their customers, and shunning those who do not make the grade. "An Uber trip should be a good experience for drivers too," says an Uber blog post. "Drivers shouldn't have to deal with aggressive, violent, or disrespectful riders. If a rider exhibits disrespectful, threatening, or unsafe behavior, they, too, may no longer be able to use the service." It does not seem to take much to annoy some Uber drivers. On one online forum, an anonymous driver said he gave poor reviews to "people who are generally negative and would tend to bring down my mood (or anyone around them)." Another was cavalier about the process: "1 star for passengers does not do them any harm. Sensible drivers won't pick them up, but so what?" In response, some consumers are becoming more polite and prompt. "The knowledge that they may be rated is also encouraging people to submit more upbeat reviews themselves, even if the experience was less than stellar," writes Streitfeld. "When services choose whom to serve, no one wants to be labeled difficult."
Between the liability/risk issues of potentially not having commercial insurance, the looming threat of municipal regulation, the increasing prices, and now the disclosure that some drivers may be just as petty as riders, it sounds to me like these ride-sharing companies are eating their own. Makes me question how long-term-stable the business model is.
Do not look into laser with remaining eye.
Uber was a disruptive (read: sketcky) concept to begin with. Several cases of assault by drivers and even a rape in india are documented occurances in the Uber ecosystem that seem to be shrugged off by the company as "isolated incidents." And since everyones an independent contractor in Uber theyre fairly insulated against things like state or federal investigations into any problems. Then theres surge pricing, which is the combination of words that come out of a rich mans cocksucker when they mean to say price gouging. Basically, its unregulated and the fruits of such deregulation cut both ways. Uber black is predicated upon the deceptive idea that people in very nice cars would like to play taxi, whereas in the real world their time is worth far more than an uber pittance. In a regulated taxi service you have rules and regulations to adhere to in order to maintain your taxi cab license, so you follow those rules.
In Uber, there is no palpable consequence for driving a family of 4 to a corn field instead of Disney land because once hes finished his negative review of you, you're now stranded somewhere without a taxi and locked out of uber.
Good people go to bed earlier.
A lot of economists view and post on this board, so maybe one of them could explain something to me.
The libertarian view would seem to apply here: a capitalistic system taken out of the free-market model and run by well-meaning regulation to prevent certain bad practices. Taxi rides must be regulated by government, lest the rides become unsavory, price gouging, and unsafe. Taxi rides are considered a necessary infrastructure, and thus a natural monopoly.
(And to be clear, having safe, reliable transportation in a city brings a lot of benefits: tourism, visiting businessmen, and so on.)
Despite the well-meaning reasons for all this, the taxi medallion system does not live up to it's purported goals. Taxi rides are the subject of satire, sarcasm, and mockery.
Here's a typical first-hand report.
Taxi medallions sell for multiple hundreds of thousands of dollars. The money is used to fund the regulatory system surrounding taxis, and one would *suppose* that with this much money available that there would be a lot of infrastructure keeping things clean, safe, and reliable.
And yet, taxis are neither clean, safe, nor reliable. Here's a series of articles from Boston on the situation. From those articles:
[...] Passengers hurt in accidents often run into denial and evasion by poorly insured firms
[...] fleet owners get rich, drivers are frequently fleeced, and the city does little about it
It's abundantly clear that the government-regulated, natural monopoly solution simply *doesn't work*.
So here's my question: It would seem on first reading that the Libertarian view, of "remove regulation and let the free market decide" is the better solution. We have two models both active in the same market (taxi medallions with regulation, versus app-driven Uber) and it would appear that the Libertarian model is better.
Why is the Libertarian view on this particular narrow situation not the correct view?