So what is Uber a Substitute *For*?

UBER VS TAXIThere was a lot of hubbub about Uber’s entry into Birmingham, and a lot of people in a lot of places worry about what Uber means for “safety” and “good jobs.” There’s a lot of substitution from taxi cabs to Uber—I don’t plan to take a cab ever again, especially after Uber cut prices in Birmingham.

Yes, Uber is a substitute for taking a taxi. It’s also a substitute for driving: had I not taken Uber, I would have driven and paid for parking (I’ve had too many late taxis to trust them, but with Uber’s competition…).

I take Uber to and from work once or twice a week. With the recent price cut it’s about $10-$15 one way, and while that sounds steep—compared to about $2 worth of depreciation/insurance/etc for a four-and-a-half mile trip, it’s really not that much once you consider the opportunity cost of my attention while I’m driving (which I hate). It’s also about fifteen minutes I could otherwise recover, and especially since I’ve been walking to and from work in the last few weeks it has been a nice way to commit to getting some real exercise.

Furthermore, if it leads to lower demand for maintenance, it’s less time and energy I have to spend worrying about oil changes, actually getting maintenance, and so on. In short, it eliminates a pretty substantial distraction.

On that, I can’t wait for Lyft to enter the market, if for no other reason than because the prices will continue to fall. Yes, taxi drivers are a bit worse off because of the technological change, but on net we’re better off because the gains go where they always go: to consumers.

I’m a big fan of ride sharing. Use code bv9q0 for a free ride from Uber and ART520 for a free ride from Lyft.

About the Author: artcarden

Leave A Reply

Your email address will not be published. Required fields are marked *