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Getting Over Getting Over Uber: Tim O'Reilly Does the Math
Susan Crawford yesterday published at Medium a critique of Uber and similar ride-coordinating services, in the form of a kind of paean to the American taxicab.
Though she didn't start out with negative feelings for Uber, Crawford writes, her sentiment has swung away from objections to taxis (such as that they seek unfair protection from competition) to an extravagant defense, though it comes with a long list of "shoulds": "[Cities] should be focusing on making their taxi services better," she writes. "Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing." Even with the flaws that list implies, Crawford's description of how well taxis work now is more positive than I've found to be true: "Their rates are regulated and set; their pricing is transparent and can be double-checked (just look at the meter, which is itself regularly tested); they look like a uniform fleet; they are subject to very strict licensing and safety requirements. With rare exceptions, they don’t employ surge/congestion pricing schemes."
Tim O'Reilly has written a response, calling Crawford's arguments "puzzling and unconvincing." O'Reilly dissects some of the math behind the business of driving others for money, as it applies to both conventional taxi drivers and "gig economy" drivers, as well as some of the qualitative effects of ride-dispatch services; surely some readers will take issue with his figures and examples, but they provide a plausible case for doubting Crawford's rosy picture of taxis and dark view of modern app-dispatched rides. O'Reilly writes: "Regulation is not a good in itself. It is a means of achieving public goods. And so far, it is pretty clear that Uber and Lyft (and in particular, the competition between them) are improving the transportation options in American cities. Regulators should be using the opportunity to revisit the old way of doing things rather than trying to make the new conform to outdated rules that no longer serve their purpose."
Tim O'Reilly has written a response, calling Crawford's arguments "puzzling and unconvincing." O'Reilly dissects some of the math behind the business of driving others for money, as it applies to both conventional taxi drivers and "gig economy" drivers, as well as some of the qualitative effects of ride-dispatch services; surely some readers will take issue with his figures and examples, but they provide a plausible case for doubting Crawford's rosy picture of taxis and dark view of modern app-dispatched rides. O'Reilly writes: "Regulation is not a good in itself. It is a means of achieving public goods. And so far, it is pretty clear that Uber and Lyft (and in particular, the competition between them) are improving the transportation options in American cities. Regulators should be using the opportunity to revisit the old way of doing things rather than trying to make the new conform to outdated rules that no longer serve their purpose."
...but then a taxi lobbyist dropped a big bag of Benjamins on my desk, and what's a blogger to do?
Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing.
Congratulations, you just described Uber, and now understand why it exists.
The only thing limiting availability of Uber in fact, is governments and taxi cartels you seek to improve... if taxis could be any of those things, why aren't they already since they have had decades longer to do so? If you think the "city" can make the taxis into those things, look around at the barley kept -up infrastructure and crumbling streets and answer the hard question of how they could do that one thing well when so many other things have been done poorly.
If wishes were horses I wouldn't need taxis OR Uber, but they aren't so I do
"There is more worth loving than we have strength to love." - Brian Jay Stanley
say it again. It's not the service, it's how they treat their employees, e.g. by calling them contractors to get out of paying for their Health Care, Unemployment, tax and other benefits (as well as their commercial insurance and proper background checks). Right now Uber is externalizing all those costs. Either onto the driver or eventually society (since we more or less don't just let people die in a gutter in this country, yet...). Their entire business model falls apart as soon as those costs aren't externalized. Look at all the 'Uber for...' companies and how quickly they shut down when their told that they have to treat people who are a core part of their buiness as employees...
Uber is a race to the bottom and a sign capitalism is starting to break down...
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I generally avoided Uber, but last year I needed a taxi to get to the airport. I called two different taxi companies, and neither one had any taxis available to pick me up. Uber came right away, and was cheaper than a taxi.
Generally it's easier to get an Uber than a taxi, unless you're right in the middle of a big city. And it will be a long time before traditional taxi companies get their game together enough to equal that.
"First they came for the slanderers and i said nothing."
then stfu, don't read the article, and go get a life. it's not as if you had a gun pointed to your head making you read this stuff.
"Regulation is not a good in itself."
I wish more people realized that. How many times have you seen people arguing, one side saying, "Regulation is bad!" and the other "Regulation is good!" It's one of the dumbest arguments ever, because both sides are wrong.
Some regulation is good, and some regulation is bad. If you want to know which is which, you need to actually look at the regulation itself.
"First they came for the slanderers and i said nothing."
In western europe for example, taxi are geographically widespread (for example in germany they are forced to take negative value fare in remote area), their price is regulated but uber is not and uber DO surge pricing. So taxi fare is uniform and predictable (low is a question of perspective). Taxi are driven by trustworthy driver , german regulation make sure of insurance (commercial) is there and there is a test in many country. Uber not so much. Taxi are accessible to everyone as over a zone some country imposes a minimum number of accessible handicapped taxi. All of those Uber does not really do. We even have in germany an apps on smartphone to hail taxi (at least in my region). Uber DO LIE on pretending there is driver nearby. Uber bombed with fake request their rival. Both of which would be a fraud in germany for example. take off the pink glasses in many countries in western europe Uber is not so great , it is only a newcomer which want to break laws to its disadvantage, laws mostly protecting consumer NOT taxi.
Now we know that US law are often corporate blowjobs (dealership, taxi medaillion etc..). But Uber is not so great either. What do you think will happen if taxi get deregulated ? Well i will tell you : the most common minimum denominator that's what will happen.
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Taxi's can't offer guaranteed service at certain locations and times precisely because they do not use the author's dreaded "surge/congestion pricing schemes."
When your professional society conference lets out at the same time that the local sportsball team's game gets over, and everyone is headed downtown to eat, the taxi company runs out of cabs because they're all cheap and everyone takes one. Uber surges the price to match the market demand, more drivers come out, and everyone who wants a ride can get one.
Under the pure cartel taxi system, if you need to get to the hospital because your wife called and she's gone into labor early, too bad! All the cabs are taken because they're so cheap and the demand is so high. Under Uber's system, the price rises to match the demand and you can pay for a ride.
It's no different than when people decry "price gauging" after a natural disaster. Go ahead and keep gas at pre-disaster prices, and 100% of it will sell out. Then, if you MUST have it, say to run your generator to power grandma's oxygen machine, too bad! It was all sold for $2/gal to a bunch of people who panicked and drank it all up even though they really didn't need it. If the gas stations had surged pricing to match demand, they'd be more likely to have some left, and while it would be very expensive, at least it would be available for people who really needed it, instead of being consumed by people who merely panic-purchased because it was still cheap.
Uber's surge pricing system is a virtue of their business model, not a vice.