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My Uber Driver Couldn’t Understand! – Art Carden: Economics Everywhere, for Everyone

My Uber Driver Couldn’t Understand!

I use ride-sharing whenever it’s available. In Orlando recently, I took Lyft from my hotel to the University of Central Florida, where I was speaking on whether capitalism exploits the poor, and I took Uber back to the hotel. I had nice conversations with drivers in both directions (Pedro for Lyft, Eman for Uber).

My Uber driver is a mother of three who drives for Uber when her husband is home with the kids in part to pick up some spare cash and then also to get out of the house, decompress, and meet interesting people. She prizes the flexibility: Uber, basically, provides her with a platform that lets her choose if and when she wants to work.

It seems like a great gig for people looking to pick up a few extra dollars on the side. I would have second thoughts about my wife driving a taxi. Uber or Lyft, not so much: they are far more transparent, no cash changes hands, and the opportunities to commit crimes (for passengers) are sharply curtailed. My Uber driver said she was initially a bit nervous about picking up strangers and driving them around, but she said it has really gone well.

She was shocked when I told her there is no ride-sharing in Birmingham. It’s clear the Uber and Lyft business modes work for everyone involved: as a rider, I get transparent info and easy transactions. As a driver, she gets transparent info, easy transactions, and loads of flexibility. Uber makes money by providing an information clearinghouse and by changing prices in real time.

There are two groups of people for whom Uber and Lyft don’t work: transportation companies and taxi drivers that don’t like competition, and politicians who fear or dislike what they can’t control. That’s where we have serious problems as these groups have devoted considerable time to erecting barriers to entry into the market. Uber and Lyft have made concessions in cities like Orlando, but these have been utterly superfluous (from an economic perspective). More than anything, their concessions have been like the concessions a merchant would make to a robber baron for the right to do business in a city or to a local mob demanding protection money.

I too share my driver’s disbelief. She wasn’t the first. A friend who was in Birmingham for a conference a few weeks ago suggested I use Uber for something or another. He was blown away when I told him Uber and Lyft aren’t available in Birmingham because of the way the city has regulated ride-sharing.

As a regular user of Uber and Lyft, I’m shocked that anyone would object. As an economist who understands how people respond to incentives in politics, I understand it completely.

About the Author: artcarden

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