Uber-Economist

by on December 30, 2013 at 1:12 pm in Economics, Travel | Permalink

Uber is hiring economists. Looks like an interesting job:

Urban transportation has looked the same for a long time – a really long time – thanks in large part to regulatory regimes that don’t encourage innovation. We think it’s time for change. We’re a tech company sure, and we’re working in the transportation space, but at the end of the day we’re disrupting very old business models. Our Public Policy team prefers winning by being right over some of the darker lobbying arts, and so we’re looking for a Policy Economist to tease smart answers to hard questions out of big data. How do the old transportation business models impact driver income? What effect if any is Uber having on the housing market or drunk driving or public transit? To what extent are the different policy regimes in New York City and Taipei responsible for different transportation outcomes? Just a few of the questions we want you to dig on.

Ted Craig December 30, 2013 at 1:36 pm

“Our Public Policy team prefers winning by being right over some of the darker lobbying arts.” Good luck with that.

Ray Lopez December 30, 2013 at 2:24 pm

I bet they are looking for a white paper that they can then send to their lobbyists in K street. And I bet they fire the economist as soon as they get the answers they want to hear. But they do have a disruptive technology. Here in the Philippines, traffic lights are disruptive: they are more efficient than traffic cops, but since cops vote for the pols that give them jobs, the pols don’t vote to install traffic lights, and the few lights that get installed get sabotaged by Luddite traffic cops.

PS–Joe Studwell’s How Asia Works is outstanding on land reform impasse and the long-term effects it had on the Philippines, compare with Korea and Japan. It sounds a bit too tidy to be true but it’s a compelling case.

asdf December 30, 2013 at 5:50 pm

+1

I used Uber once and liked it. Just the right mix of affordable and upscale.

My hope is they don’t drive fares so low that the quality goes down (right now UberX is much higher quality then local taxis).

Michael Sullivan December 30, 2013 at 7:34 pm

As long as surge pricing is in its current form, I don’t think you need to worry too much about that. But it does mean that if you want to ride on Friday or Saturday nights, you’ll probably be paying 1.5 to 2 times the base fare.

If they change surge pricing such that most drivers mostly get rides that are at the base fare rates, I’d expect quality to drop.

Alexei Sadeski December 30, 2013 at 3:12 pm

I’ll just throw out that maybe 90% of lobbying efforts try to win by being right. Look at Murdoch’s funding of CATO, for instance.

prior_approval December 31, 2013 at 2:17 am

Well, he was a director (in a pay to play sort of world, that is at least an indication of some sort of fundamental quid pro quo – but then, Murdoch does offer things other than money) for a while.

Though being a shareholder in that entity is what used to matter – but after the experience with Kathryn Washburn, the structure was changed to ensure that what started out as the Charles Koch Foundation remained firmly in the hands of those representing the views of its former namesake.

http://en.wikipedia.org/wiki/Cato_Institute

Corvus December 31, 2013 at 10:35 am

Hmmm – interesting thought, but I would counter that you have the percentages reversed – imo 90% are just trying to make it look good. Like the Sophists, or the Jesuits, using logic to beat the shit out of you until you have no desire to continue the fight, due to simple fatigue. Since, for most of the population, anything more than about 20 seconds of rational argument is the outer tolerable limit, many arguments are “won” through simple tmi.

Alexei Sadeski December 31, 2013 at 11:58 am

Interesting, can’t say that I disagree.

I think I had in mind the (obsolete?) idea that vast amount of lobbying is defensive in nature.

Bill Reeves December 30, 2013 at 1:45 pm

What lessons do the early days of American banking have? Back when there was no paper currency and individual banks would issue their own banknotes redeemable in gold or silver (theoretically). Were those competing fiat currencies or was the promise of redemption in specie credible?

Adrian Ratnapala December 30, 2013 at 2:21 pm

Eck?

The Anti-Gnostic December 30, 2013 at 2:19 pm

•Travel like a European diplomat: employees are showered with Uber credits
•Ground floor opportunity at a fast growing company that is changing the face of transportation worldwide
•As an early member of our business operations team, you’ll shape the business direction of the company
•We’re not just another social web app: we’re moving real assets and real people around their cities
•We have access to an amazing list of advisors and investors that we actively engage

Dear God.

NPW December 30, 2013 at 2:51 pm

Job requirement “Being a hustler who plays to win is non-negotiable.”

Corvus December 31, 2013 at 10:38 am

I read your comment before the ad. I was surprised, but they actually say that.
. . .“Being a hustler who plays to win is non-negotiable . . .”

I wonder how that balances against: ” . . .Our Public Policy team prefers winning by being right over some of the darker lobbying arts . . .”

Z December 30, 2013 at 2:51 pm

***Our Public Policy team prefers winning by being right over some of the darker lobbying arts***

The guy who wrote that should be preemptively thrown in prison. The charge can be douchebaggery in the first degree. Maybe add “2.0″ to the charge just for yucks.

A decade ago I spent a year working on public transit stuff. There’s nothing worth knowing once you figure out how it works. It is just a skim like any other political racket. I can name a dozen things a typical city knows they could to make their systems better, but they will never do them.

A Definite Beta Guy December 30, 2013 at 3:10 pm

Well, I see no convincing reason to hold out on us.

charlie December 30, 2013 at 4:30 pm

I’m sure 99% of every special interest wants to win by being right and getting something for said special interest.

Uberterians, my eye.

mulp December 30, 2013 at 4:54 pm

And Uber isn’t a “skim”??

How much has Uber spent building roads? If Uber were to open up in some African nation with billions of cell phones, would it build the roads needed to provide the on-demand transportation services, or would lobby for big government transfers of wealth to build roads to meet Uber’s profit needs?

Careless December 30, 2013 at 5:16 pm

lol, mulp. am I the last person in the universe recognizing your existence?

Mr. Econotarian December 31, 2013 at 10:42 am

Uber would have to build the roads, because the corrupt governments are incapable of doing it. Realistically, they would have to pay off government officials for the permits, get a Chinese company to efficiently build the road, and hire mercenaries to protect the builders from local rent-seekers during construction. Kind of like drilling for oil in Africa, only the US still has the best oil exploration companies.

ThomasH December 31, 2013 at 2:23 pm

@ Z
This claim woud be more crediblle with 3-4 examples; one if it was congestion pricing of streets.

Steve Sailer December 30, 2013 at 8:06 pm

Conventional taxi companies get saddled with a lot of extra costs by government, such as mandates to pick up people in wheel chairs or take groups of young black men to South Central or whatever. Uber has long felt that such regulations don’t apply to them because are high tech or something. I suspect they want policy papers explaining why it’s evil discrimination when a regular taxi company refuses to pick up a black grandmother in a wheelchair from Florence and Normandie, but it’s not when a disruptive high tech start-up with an ironic name like Uber refuses.

In general, Silicon Valley acts like many anti-discrimination laws and regulations don’t apply to them because they are special.

Max Factor December 30, 2013 at 8:21 pm

Shhhhhh, don’t be too critical of our new overlords or they may fulfill their dream to exit the USA. Could you imagine a life without Twitter, Yelp or Uber?

http://valleywag.gawker.com/silicon-valleys-ultimate-exit-is-a-fantasy-of-seceding-1449199349

The Anti-Gnostic December 30, 2013 at 8:59 pm

“with an ironic name like Uber”

LOL. I missed that. “Travel like a European diplomat…” maybe not so ironic.

asdf December 30, 2013 at 9:11 pm

The fact that Uber is taxi’s for yuppies is a big part of the appeal. For not much more then the price of a regular taxi an upscale dude (often even white) who speaks decent English, is polite, and knows his way around (plus has a GPS) arrives in a clean car that is usually nicer then most taxis. If they had to pick up the lower classes their cars wouldn’t be that nice, and the increase in theft, robbery, and dirt would mean you wouldn’t have as nice a car of driver.

The fact that you need a smart phone is a great way of being able to achieve the positives of price discrimination against bad clientele without having to make the Uber ride itself too expensive.

Steve Sailer December 30, 2013 at 10:26 pm

Yes, but will smart phones penetrate so far down scale that Uber’s market discrimination advantage become irrelevant? Smartphones are up to 64% of the population in 2013.

http://www.webpronews.com/u-s-smartphone-penetration-hits-64-young-people-lead-the-way-2013-09

asdf December 30, 2013 at 10:34 pm

The dorky name helps a lot to. Also, drivers aren’t forced to accept fares.

Steve Sailer December 30, 2013 at 11:13 pm

In other words, Uber and Lyft drivers are allowed to profile fares and racially discriminate. But that’s okay because they have amusing names, unlike Yellow Cab, and they use smart phones.

In general, a lot of what Silicon Valley is trying to make money off of these days is ways to get around discrimination regulations.

Conversely, a lot of the anti-startup coming out of San Francisco recently is old time politicians like Willie Brown finally deciding that they ought to be able to shake down Silicon Valley for more money because so many SV firms’ employees want to live in SF.

Corvus December 31, 2013 at 10:56 am

Asking the question, at least in the US market, I find so disingenuous as to be laughable. Smart phones have a cost in the US, and they are not cheap. The US is seeing a widening wage gap, and anybody “down scale” is less likely to make it “up scale” – ever. And, people “down scale” in the US are not likely to have smart phones. Ergo, socio-economic sifting of customer base.

However, having said that, how the US telecoms market cell phones is different from services (and COSTS) overseas. Extremely different (much more expensive), in my experience. On this basis, and the fact that Uber apparently offers services in such cities as Moscow, New Delhi, Mexico City, and Bangalore – it would be very interesting to see some numbers on both smartphone cost, and usage by socio-economic class, and Uber “taxi” usage in those markets.

David December 30, 2013 at 10:19 pm

The old phrase goes, “It’s better to beg forgiveness than to ask for permission.”

I would put it more like this: when it comes to flouting regulations, Silicon Valley tries to see what it can get away with. After all, does anybody have the time and clout to enforce those rules? How many lobbyists does a 100 billion dollar cash stockpile pay for?

Silicon Valley’s start-up model also limits their liability. If a start-up tries something that is not exactly kosher, and if they get smacked down it’s not a big deal. If they don’t, they either grow or get bought out.

Michael B Sullivan December 30, 2013 at 11:15 pm

This has elements of truth in it with a heavy gloss of “What? No.”

Conventional taxi companies do get saddled with lots of extra costs by the government, but those costs are (in the biggest markets) almost entirely medallion fees, not some kind of weird anti-discrimination costs. Uber has to pick up customers who are young black guys as well — at least, theoretically. As millions of black New Yorkers will tell you, whatever their legal obligations, there’s nothing that practically stops medallioned cabs from ignoring black customers as well. Uber isn’t legally allowed to refuse to pick up black customers any more than J. Random store is allowed to put up a sign saying “No blacks allowed on premises.”

Besides not needing medallions, the other big regulatory advantage that Uber has over taxi companies is, in two words, surge pricing. Demand for taxis is very, very spiky. Based on the data that I have access to, a minimum of about 12% and a maximum of perhaps 25% of all traffic for any given week is the Friday and Saturday night nightlife time. Another probably 50% of the rest of the week is wrapped up in a morning commute surge, a dinnertime surge, and a much smaller lunchtime surge (all of this is for San Francisco, the market I know the most about — but I imagine it is similar in other relatively dense urban areas. I don’t expect it’s true in less dense areas, but the dense areas are the taxi market).

Uber, in San Francisco, reliably surges on Friday and Saturday nights, and increasingly has limited surges in other times. It’s hard to tell because Uber doesn’t publish their data for understandable reasons, but I’d guesstimate that anywhere between 20% and 50% of all Uber rides in San Francisco have some surge multiplier applied to them.

Taxis, of course, have their fares set by statute, and can’t vary rates according to demand. This is a very significant advantage for Uber. This is a pure guess, but my suspicion is that they only break even on non-surge rides or indeed offer them as essentially a loss leader for surge rides. Imagine what other businesses would do to be able to reliably double their revenue (for not a cent more cost) on even 5-10% of their business each week!

Rahul December 30, 2013 at 11:52 pm

In my city’s rules for Taxis: “Drivers must complete the City approved disability and sensitivity training program. [Must provide] Specialized (flat rated) taxicabs for the elderly and people with disabilities have special regulations. “

Plus an annual inspection & a driver fee & a vehicle fee. Plus a requirement to provide a “24 hours a day, 7 days a week” service. Also the have to by law “provide service to the entire City” geographically.

Now please tell me how many of those clauses Uber must abide by. How is this anything but unfair competition? Let’s have a level playing field please.

Cliff December 31, 2013 at 12:34 am

Or just let Uber and its kin destroy taxis, problem solved

Steve Sailer December 31, 2013 at 1:11 am

At which point the government will saddle extra costs on Uber et al, and then new “disruptive technologies” will arise to get around the regulations. When that happens, a few people will get rich and a lot of people will get excited.

Ray Lopez December 31, 2013 at 1:42 am

@ Steve Sailor–so you’re anti-discrimination for US citizens, but pro-discrimination for immigrants? Or did US public schools instill in you a sense that discrimination against Americans is plain bad, but against foreigners it’s OK? Or has your new popular public profile made you more PC? It’s as amusing to see your contradictory opinions as it would be to see a KK clansman help a little old black lady cross the street…maybe I should check your blog for more ‘refined’ views of your bigotry, lol.

The Anti-Gnostic December 31, 2013 at 11:50 am

Steve does a good job pointing out how much of what the Progressives do is really just class warfare against lower status whites, or escape hatches for them to avoid the consequences of the policies they advocate.

Ed December 30, 2013 at 8:17 pm

NYC had Schaller Consulting, a group which published studies and white papers which purport to show why New York’s medallion system is better than a freer system of taxicabs. Their reports are quite well researched, even if the conclusions are a rather strained.

Since the medallion industry, having seen the value of their medallions rise from $10 to $1,000,000, has an obvious incentive to support the status quo, I am glad to see that companies like Uber are disrupting this legal monopoly. Let’s hope they find a way to muscle into New York’s market.

Max Factor December 30, 2013 at 8:25 pm
The Anti-Gnostic December 30, 2013 at 8:53 pm

I sure hope so. There’s nothing New York needs more than a bunch of angry, economically displaced Caribbean African and subcontinental Asian former taxi owners and drivers. It’s a small price to pay so yuppies can be ferried around New York by better looking drivers who don’t have such scary accents.

jmo December 31, 2013 at 3:21 pm

better looking drivers who don’t have such scary accents.

I don’t think I’ve ever gotten a white native English speaking Uber driver.

But, compared to cabs, they don’t talk on their phones, they don’t claim the credit card machine is broken, they know where they are going, they don’t scream obsenities at other drivers, the obey the rules of the road, etc.

The Anti-Gnostic December 31, 2013 at 6:10 pm

Hater.

Careless December 30, 2013 at 8:24 pm

So someone like my wife could apply her EPIC experience to Uber

bry4321 December 31, 2013 at 1:44 pm

Q: “How do the old transportation business models impact driver income?”

A: They don’t. Impact is a noun. (no charge)

jmo December 31, 2013 at 3:23 pm

Proper English grammar is defined by common usage.

Corey Owens January 2, 2014 at 4:30 am

@Z, as Uber’s Head of Global Public Policy, I’m the douchebag who wrote that sentence. Happy to chat any time with you (or others) about how to lobby – smartly – on matters as intractable as the ones we’re dealing with while holding the high ground. Not a simple task, but a nut I’m intent on cracking. I’m at corey@uber.com.

And bry4321 – good catch, my bad. :-)

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