The polity (culture) that is France

by on March 5, 2016 at 2:35 am in Current Affairs, Economics, Law | Permalink

As most of you probably know, there is a legal campaign against Uber going on in France, here is part of the back story:

It took only a few years for Uber and other platforms challenging the Parisian taxis’ monopoly to create more than 15,000 jobs. (About 5,300 are self-employed and the rest are employed by minicab companies.) They compete against the 17,000 taxis in Paris.

“There has been a tidal wave of start-ups in the banlieues, an entire generation wants to be Uber drivers,” says Sabrina Lauro at Planet Adam, a non-profit organisation that helps residents in the suburbs set up businesses. Uber appeals to those without a diploma or work experience, she said.

Research seems to bear this out. Charles Boissel, a PhD student at HEC Paris, a business school, found that most minicab registrations were in the “suburbs of northern and south-eastern Paris, where economic conditions are harshest”.

Here is the Anne-Sylvaine Chassany FT piece, recommended.

1 mulp March 5, 2016 at 3:19 am

Uber creates no jobs. They are explicit in stating that.

Uber provides contracts to businesses, and Uber has spurred the creation of perhaps millions of business startups, new capitalists. After all, you can’t get a contract from Uber without providing the productive capital asset that Uber requires to fulfill the contract. As far as Uber is concerned, the car or van is self driving, because Uber pays only a fee to have the capital asset move the customer from point a to b.

The vehicle owner probably does not pay any wages to any employee, so there are no workers in most cases, just the owner of the capital who is paid a rent.

2 Slocum March 5, 2016 at 6:55 am

Self-employed is still employed. Many occupations (self employed or not) require the use of the worker’s car.

3 Mike March 5, 2016 at 11:47 am

blah blah bal [marxist rhetoric] blah blah blah

People are taking home Euros aren’t they?

4 BC March 5, 2016 at 2:28 pm

So, in other words, not only does Uber create jobs, it does so without creating “exploited” workers. Uber turns workers into supposedly “privileged” capitalists.

Which is it? Do capitalists exploit workers, in which case Uber is elevating all of these workers into capitalists, or is the relationship between capitalists and workers better described as mutually beneficial and non-exploitive, in which case much of the Left’s economic narratives fall completely apart?

5 Nathan W March 5, 2016 at 9:07 pm

It is possible for both to be true. You “run a small business”, but basically all that’s changed is that you, the worker, face 100% of upfront costs for capital, 100% risk of the downturn in the market, and lose all benefits for retirement, job security and others. It is obvious why firms prefer this arrangement.

To deter excessive abuse of such arrangements, Canadian labour law requires that any “small business” must not have more than 80% of their business with just one client, and otherwise it’s an employment relationship that comes with all the legal obligations. However, some firms sidestep this, by creating two separate businesses to dish out the contracts to the “small business” who is for practical purposes just a worker who faces all the up front costs and all the risks.

The “small business operator” gets to delude themselves into thinking that they are a businessman, which we valorize and praise as a model of success. But the reality is that they have lost all their benefits and taken on all the risk. This is not a rare situation. But, I guess, it helps to keep costs down. We should not delude ourselves into thinking that such arrangements are good for the worker, however.

6 BC March 6, 2016 at 2:03 am

This is the argument for why being a capitalist is no picnic, which completely undermines the Left’s historical position that capitalists are privileged. The Left’s context-dependent assessment of the capitalist is untenable. First, government must prevent workers from becoming capitalists because being the capitalist is so bad. Then, government must interfere with workers’ and capitalists’ liberty of contract because being the capitalist is so good.

7 Thomas March 6, 2016 at 4:46 pm

“The “small business operator” gets to delude themselves into thinking that they are a businessman”

So much of the left’s rhetoric is based on emotional symbolism. One ‘deludes’ oneself into thinking one is a symbol of success, because one emotionally desires to be that symbol, therefore the trade isn’t fair. It’s projection from the people desperate to be symbols.

8 Thomas March 6, 2016 at 4:43 pm

“just the owner of the capital who is paid a rent.”

Lol. The owner provides labor which is part of the compensation, obviously.

9 prior_test2 March 5, 2016 at 4:54 am

‘there is a legal campaign against Uber going on in France’

Oddly, there is a ‘legal campaign’ against Uber in Germany too – if one defines ‘legal campaigns’ as judges finding Uber of violating German law.

‘Despite raising a warchest of some $8 billion, on-demand ride sharing platform Uber is retrenching its operations in Germany — pulling out of three cities (Frankfurt, Hamburg and Düsseldorf), leaving active operations in just Berlin and Munich.

The move follows a Frankfurt regional court ban on Uber using unlicensed drivers, issued back in March. The court ruled that each violation of the ban would be subject to a €250,000 ($270,000) fine. The legal challenge was driven by German taxi operator group Taxi Deutschland targeting the lower cost UberPop service.

At the time Uber had said it would continue operations in the cities, offering its limousine service and licensed taxi drivers, but has now decided it’s not able to run a reliable service with only those fall-back options because it can’t get enough drivers.’ http://techcrunch.com/2015/11/02/uber-retrenches-in-germany/

In other words, Uber is simply too an unattractive employer to attract anyone already able to make a living driving a taxi in Germany. But if it makes anyone feel better on how the free market can work its magic (well, until those ‘legal campaigns’ start), the major competing German parcel services let their drivers go, hiring drivers as ‘independent sub-contractors’ (generally with the vehicle no longer being part of a company fleet) – this way, the various expenses associated with having employees (such as paying the employer share of taxes, pension, health insurance) and vehicles (accident insurance, for example) no longer appear on the company’s books, but do exist for the ‘sub-contractors.’

This attracted a number of people to acquire a van, with a number discovering the joys of going bankrupt slowly, often without having health insurance (it is quite possible to be uninsured in Germany – Germany may be a socialist hellhole, but its health care system is most distinctly a for profit system). The delivery company management bonuses for all the cost savings were better secured, of course.

The problem was, anyone who only works for one company exclusively is not independent, legally speaking. And I now see the same game has reached American shores, along with a ‘legal campaign’ against it – http://www.wsj.com/articles/fedex-loses-appeal-in-case-on-classification-of-kansas-drivers-1436917992

Describing how a bunch of people are being suckered into helping someone else get rich (assuming that French Uber conditions are comparable enough to the more than decade long experience of ‘independent’ German delivery drivers) is an opportunity, along with seeming reprobation of any ‘legal campaign’ against it, is what makes this place so reliably entertaining.

10 chuck martel March 5, 2016 at 8:14 am

“Describing how a bunch of people are being suckered into helping someone else get rich….”

That’s capitalism. For everyone. No man can become wealthy in isolation. To acquire wealth it’s necessary to have others assistance in supplying the goods and services that more people are willing to exchange their wealth for. Even a work-obsessed genius can’t rise very far above the herd without the advantages of social relationships.

11 prior_test2 March 5, 2016 at 9:23 am

‘That’s capitalism. For everyone.’

Really?

‘To acquire wealth it’s necessary to have others assistance in supplying the goods and services that more people are willing to exchange their wealth for.’

Robbing travellers so as to acquire enough wealth to build a tavern to serve later travellers without resorting to robbery is probably not what one would consider a valid model – at least in a legal sense.

‘Even a work-obsessed genius can’t rise very far above the herd without the advantages of social relationships.’

Sure – but someone who inherited a fortune does not need to do anything to be above the herd. And someone willing to fleece the herd may also acquire wealth, by exploiting social relationships to their advantage.

12 Thomas March 6, 2016 at 4:50 pm

“Robbing travellers so as to acquire enough wealth to build a tavern to serve later travellers without resorting to robbery is probably not what one would consider a valid model – at least in a legal sense.”

The weakest argument against markets is comparing trade in a society with safety nets to violent theft by stationary bandits. The irony is that the stationary bandit model is preferred by the person presenting the argument against markets.

13 TMC March 5, 2016 at 1:52 pm

Sounds like Germany really sucks if you’re a consumer. It has always been on my list of places to visit, but you make it sound very uninviting.

14 Harun March 5, 2016 at 3:33 pm

Yes, Germany makes it inconvenient for you to even shop on Sunday:

http://www.german-way.com/travel-and-tourism/germany-for-tourists/shopping-in-germany/shopping-hours-in-germany/

Its amazing how Europeans can imagine how hellish America must be under our theocratic regime, while they still ban shopping on Sundays. I don’t suppose they expect people are going to Church.

15 Millian March 5, 2016 at 6:06 am

Even on this thread, no-one cares about really poor people, just insiders who might be less protected.

16 prior_test2 March 5, 2016 at 8:13 am

Who has ever said I cared about poor people? The poor will always be with us is a fairly banal observation in its own right, even if one not made by an economist. Much like saying there will always be winners and losers. This is just part of that binary thinking which seems to have grown ever more common – it is quite possible to be disdainful of the rich getting richer without in any way, shape, or form caring about the poor. The ‘geprellte’ German drivers were not among the lowest classes, to put it mildly – but they were losers when laws were broken to increase company profits. (A driver’s license easily costs a couple of thousands of euros, and a Mercedes Sprinter is not exactly a bargain basement vehicle.)

My point is that when laws are being broken, it does not become a ‘legal campaign’ to punish those breaking the laws after being found guilty by a court or equivalent (think administrative law).

Instead of the determination and punishment of law breakers being a ‘legal campaign,’ it is those points which are much the point of having a functional legal system.

It was not a ‘legal campaign’ to have a manufacturer of baby food actually be fined for selling a product that contained sugar water instead of apple juice, as listed on the label. It is hard to imagine finding too many defenders of these targets of a ‘legal campaign’ – ‘1987, Beech-Nut Nutrition Corporation paid US$2.2 million, then the largest fine issued, for violating the Federal Food, Drug, and Cosmetic Act by selling artificially flavored sugar water as apple juice. John F. Lavery, the company’s vice president for operations was convicted in criminal court and sentenced to a year and a day in jail; Niels L. Hoyvald, the president of the company, also convicted, served six months of community service. Each of them also paid a $100,000 fine.’ https://en.wikipedia.org/wiki/Beech-Nut

Think of the pain of those poor executives and the company’s shareholders, people only interested in ensuring profits and bonuses were paid generously in return for their efforts and ownership. Thankfully, I am sure that if a new case along similar lines were to appear, some upstanding member of the GMU econ dept. can be found to remind us how unfair it is to use a ‘legal campaign’ to punish those attempting to make the world a better place.

Thankfully, in part to the unstinting efforts of such institutions, we were able to enjoy the spectacle of untold billions being diverted for private gain through active involvment in massive amounts of financial fraud, such as ruled the mortgage industry back in the days of real estate bubble, without any apparent punishment being meted out to those responsible. Just another small step to that better world at the end of the rainbow, much like going into debt to buy a vehicle is the best way for someone to get rich – which it is, though most likely not for the person now in debt to chase their dream.

17 chuck martel March 5, 2016 at 8:23 am

Baby food containing non-specified ingredients is comparable to Uber? Are Uber drivers taking customers to places that they don’t want to go? The legality of unregulated transportation is, indeed, a question. Are laws and regulations forever set in stone? Or do new conditions give innovators the opportunity to challenge the existing legal structure to supply something that people want? Weren’t there actual illegal efforts made to challenge slavery in the US?

18 prior_test2 March 5, 2016 at 9:17 am

‘Are Uber drivers taking customers to places that they don’t want to go? ‘

Sometimes, but we don’t want to start any ‘legal campaigns’ against them, I’m sure –

‘Kalamazoo, Michigan (CNN)The man accused of killing six people and injuring two more in a Saturday evening shooting rampage in Kalamazoo, Michigan, was an Uber driver who picked up and dropped off passengers between shootings, a source with knowledge of the investigation told CNN.

The source, who is not authorized to speak to media, said investigators believe Jason Brian Dalton was even looking for fares after the final shooting of a nearly seven-hour killing rampage.’ http://edition.cnn.com/2016/02/21/us/michigan-kalamazoo-county-shooting-spree/

Of course, one mass murdering Uber driver is just the sort of exception that a big data is likely to be able to prevent in the future.

That is, if Uber decides to do something more than merely change the wording on their terms in the face of another ‘legal campaign’ – ‘Amid growing concerns over Uber passengers’ safety, prosecutors in California allege that the background checks the company conducts on drivers failed to weed out 25 drivers with criminal records, including convictions for murder, assault, sex offenses and child abuse.

The charges were included in an amended complaint filed Wednesday by the district attorneys of Los Angeles and San Francisco, the ride-hailing service’s hometown. The original lawsuit, filed in December, charged the startup with misleading consumers about their safety on the service and the quality of its driver background checks.’ http://www.cnet.com/news/uber-background-checks-missed-drivers-criminal-records-prosecutors-say/

‘Or do new conditions give innovators the opportunity to challenge the existing legal structure to supply something that people want?’

The way to do this legally in the U.S., at least most the time, is to have the laws changed through the democratic process, and not by breaking them. If this model has been successful for the band of scholars at the Mercatus Center, there is no reason why a company cannot simply set up its own well connected policy institute to achieve the same results.

‘Weren’t there actual illegal efforts made to challenge slavery in the US?’

And you have mentioned the sort of exception which is also valid, when the people breaking the law are prepared to be punished for their law breaking, in part to highlight injustice, as demonstrated in the 1950s and 60s. This ethical perspective is something notably lacking by Uber’s repeated and public contempt towards anyone saying what they are doing is not allowed, simply ignoring judges which have ruled its actions illegal.

19 chuck martel March 5, 2016 at 9:33 am

A. Drivers of cabs and Uber cars are in more danger from their passengers than the reverse. Many more cabbies have been robbed and murdered by fares than murdered the fares themselves.

B. How many previous mass murder rampages had Jason Brian Dalton gone on before becoming a Uber driver? Would it have been impossible for him to get a cab or bus driver’s license? If a mass murderer had been employed as a barrista should all coffee servers be regulated and licensed?

C. Laws and regulations get changed without the democratic process all the time.

D. There was no slavery in the US during the 1950s and 60s. One hundred years earlier there was much illegal activity in opposition to slavery. There was a Supreme Court decision in favor of slave holders. People acted against it illegally anyway. Eighteenth century colonialists, British citizens, broke the valid laws of Britain. They were, in fact, traitors. Fortunately, they were not allowed to operate Uber vehicles.

20 Derek March 5, 2016 at 9:59 am

Oh the lovely, vaunted and valuable rule of law.

I want to get from here to there, and either not own or drive a car, or can’t safely because of intoxication or not knowing the roads or local rules.

I have two choices.

Get someone who has a track record of service, organized by someone whose value both to me and the driver comes from serving both my needs simultaneously.

Get someone whose interests and mine are orthogonal to the owner of the vehicle, owner of the license, and regulator of the industry. Serious cash changes hands for the simple privilege of owning a monopoly on the service offering. If I get timely service in a clean vehicle by someone who can converse in my language and know where I need to go, it is a happenstance, it comes about in spite of the elaborate system constructed to benefit everyone but me and the driver.

The first is illegal, the second is legal.

Choking that black man to death in New York last year was legal as well.

21 prior_test2 March 5, 2016 at 10:05 am

‘Drivers of cabs and Uber cars are in more danger from their passengers than the reverse.’

Sure. And both are likely in greater danger from other drivers than anything else.

‘How many previous mass murder rampages had Jason Brian Dalton gone on before becoming a Uber driver? Would it have been impossible for him to get a cab or bus driver’s license?’

None. But really, the links are put there to provide facts, including about another one of those ‘legal campaigns’ facing Uber – ‘One of the Uber drivers highlighted in the amended complaint was convicted of second-degree murder in Los Angeles in 1982, prosecutors said. He was released on parole in 2008 after spending 26 years in prison, but a background check generated for Uber in 2014 failed to reveal the criminal history for the driver, who provided 1,168 rides, prosecutors said.

Another background check failed to identify a felon convicted in 1999 of committing lewd or lascivious acts against a child under 14 or that he is a registered sex offender. The complaint alleges that the driver gave 5,679 rides to Uber passengers, “including unaccompanied children.”

“Uber’s process cannot ensure that the information in the background check report is actually associated with the applicant since it does not use a unique biometric identifier such as a fingerprint,” the prosecutors said in the complaint.’ Let’s be honest – Uber isn’t even trying, except in terms of saying its drivers are checked as another reason they should be allowed to break the law to increase their profit.

‘If a mass murderer had been employed as a barrista should all coffee servers be regulated and licensed? ‘

It is an interesting question – yet that is currently the approach used pretty much throughout the western world (at least in terms of background checks being required before starting employment) in terms of any profession involving teaching/caring for children. A pedophile here and there, more or less as unlikely and random as a murderer (at least before the acts occur), and these days, an entirely new regulatory structure has been put into place.

‘Laws and regulations get changed without the democratic process all the time.’

True enough not to argue about in terms of definitions (laws are not supposed to be, in theory). However, when a law or regulation is in place, ignoring or breaking it is a crime. Just because some cashiers may think the money in the till is theirs is not a justification for disrupting the old model of payment, but their taking the money would remain a reason to prosecute them as thieves, at least until the law is changed to more suit those cashiers who want the cash in front of them to be in their pocket instead.

‘There was no slavery in the US during the 1950s and 60s.’

No- there were Jim Crow laws, and people sitting at a counter were arrested for breaking those laws. Gandhi was a much better strategist than John Brown, which is why I pointed out the modern moral idea of civil disobience being an effective tactic. Including the willingness to serve the penalty for breaking a law which is not just. John Brown saw himself as a warrior essentially leading a rebellion – and he was hung for treason by the Commonwealth of Virginia for his actions. One can debate whether ‘extremism in the defense of liberty is no vice … And […] that moderation in the pursuit of justice is no virtue,’ but it is something generally considered to be a radical position, one that tends to be regularly rejected in American democracy, whether in the 19th or the 20th century.

22 Art Deco March 5, 2016 at 10:27 am

Choking that black man to death in New York last year was legal as well.

It was legal because nothing was done to him apart from an ordinary police tackle which would not have been necessary had he not been contumacious. Unfortunately, he was a morbidly obese diabetic and asthmatic who had an idiosyncratic reaction to being tackled and had a heart attack

23 chuck martel March 5, 2016 at 11:18 am

“One of the Uber drivers highlighted in the amended complaint was convicted of second-degree murder in Los Angeles in 1982, prosecutors said. He was released on parole in 2008 after spending 26 years in prison, but a background check generated for Uber in 2014 failed to reveal the criminal history for the driver, who provided 1,168 rides, prosecutors said.”

Of those 1,168 rides provided, how many culminated in a murder by the ex-con driver?

24 chuck martel March 5, 2016 at 12:32 pm

“Including the willingness to serve the penalty for breaking a law which is not just.”

Would Henry David Thoreau have sided with or against Uber?

” One can debate whether ‘extremism in the defense of liberty is no vice … one that tends to be regularly rejected in American democracy….”

Dropping two atomic bombs on the Japanese evidently wasn’t very extreme.

25 Nathan W March 5, 2016 at 12:49 pm

Background checks on Uber drivers seems like a no brainer.

26 byomtov March 6, 2016 at 1:50 am

Drivers of cabs and Uber cars are in more danger from their passengers than the reverse. Many more cabbies have been robbed and murdered by fares than murdered the fares themselves.

You need to distinguish between cabbies and Uber drivers here. Having used Uber and talked to the drivers about it one thing I learned was this: Those who were former cab drivers absolutely loved the fact that as Uber drivers they did not have to carry big wads of cash, and that the passenger was easily identified. That made them much safer.

27 byomtov March 6, 2016 at 1:54 am

Oh. And breaking the law does not make you a traitor, nor is regulating Uber, or even outlawing it, on the same moral plane as Jim Crow laws.

28 Harun March 5, 2016 at 3:29 pm

Just wait until the Left decides that background checks are racist and discriminate against ex-cons.

why look, its already happening!

https://upvoted.com/2015/11/03/will-obamas-ban-the-box-order-help-ex-prisoners-get-jobs/

29 byomtov March 5, 2016 at 8:20 pm

do new conditions give innovators the opportunity to challenge the existing legal structure to supply something that people want?

Yes.

Until the laws actually change are innovators exempt from obeying them because, “Hey, we’re innovating here!”

No.

30 MC March 5, 2016 at 2:04 pm

Of course it requires a legal campaign to maintain the cartel. Uber is disruptive both technologically and legally because it is not a traditional cab service. So the entrenched cartel, their captured regulatory agencies, and the politicians (dubbed “bandit cabs with apps” by twits like LA City Councilman Paul Koretz) have to update the old regulations of the cartel to ensure that the regulations definitively prohibit the likes of Uber from chiseling.

31 Slocum March 5, 2016 at 6:57 am

Don’t assume mulp and prior_whatever are representative. Quite the opposite actually.

32 prior_test2 March 5, 2016 at 8:16 am

Thanks for the name suggestion – making predictions here is always hard. Talk about the old days of Anderson Bros. bookstore at GMU, and suddenly one needs to take a new number.

33 Yancey Ward March 5, 2016 at 11:48 am

Representative of what?

34 The Anti-Gnostic March 5, 2016 at 8:25 am

“…an entire generation wants to be Uber drivers,”

Isn’t that aiming kind of low? Why not spend your day picking up trillion dollar bills off the sidewalk instead?

35 The Anti-Gnostic March 5, 2016 at 8:33 am

You know, if I wanted to be driven around town by a gruff, impoverished Muslim who barely speaks the native tongue, I’d just call a cab.

36 meets March 5, 2016 at 9:39 am

And get much worse service than the Muslim in an uber would give you.

37 Slocum March 5, 2016 at 11:17 am

With Uber, there’s much less need to communicate, since the driver already knows exactly where you’re going and you already know exactly what it costs (and have already paid by app). With Uber, if the driver (gruff immigrant or not) maintains a high rating from customers, he will get more fares and earn more. No such incentive exists for cab drivers (which is pretty obvious).

38 meets March 5, 2016 at 9:39 am

Some of the left is completely anti science when it comes to uber. They go mad over the issue.

39 Nathan W March 5, 2016 at 12:54 pm

This isn’t a left-right issue. You get a lot of law and order right wingers up in arms about law and order stuff, while left wingers are concerned about how it undermines job security through a divide and conquer sort of reality where the providers of labour compete individually in a cut throat capitalist competition. I’m pretty pro-Uber, but I’m concerned that the contractors are all going to be left stranded with flash cars they can’t pay off once Uber goes 100% driver-free.

40 TMC March 5, 2016 at 2:02 pm

“I’m concerned that the contractors are all going to be left stranded”

My guess is that they are all grown-ups able to make their own decisions and not interested in your efforts to ‘save’ them.

41 Nathan W March 5, 2016 at 2:26 pm

Yes, clearly I communicated that I see my role in life as saving Uber drivers once things go automated. I’m so patronizing for pointing out obvious things.

42 Harun March 5, 2016 at 3:31 pm

Any links to right wingers “up in arms” about Uber?

43 byomtov March 5, 2016 at 8:23 pm

Anti-science? I didn’t know Uber was based on some amazing scientific discovery. I thought it just used computers, cars, and credit cards.

44 meets March 6, 2016 at 10:56 am

Case in point

45 Cambias March 5, 2016 at 9:48 am

Question: has anyone gathered any data on whether Uber is expanding the pool of people who pay for rides, or simply poaching from existing taxi operators?

The reason I ask is that the former case means people are making money who otherwise wouldn’t, while the latter suggests this is just a price war — in which case the forces of cartelization will fight back hard.

46 Chris Hansen March 5, 2016 at 10:06 am

I don’t have data but there are plausible theories (and personal anecdotes) suggesting Uber expands the market. If you have ever lived in a big city with shitty cab service you have probably been hanging out with your friends at someone’s place and decided to stay in rather than head to the bars etc. because parking/cabs are such a pain. I bet Uber has benefited lots of businesses. People who don’t like Uber tend to be a caricature of socialists who would rather we all suffer together than a few rise above (and over time drag the rest of us along).

47 prior_test2 March 5, 2016 at 10:15 am

‘the forces of cartelization will fight back hard’

Cartels always fight back hard – they hate the free market more than any regulator will, after all. The free market just might take money out of the cartel’s pocket, which is why the free market must be choked. This is basic. Only a certain band of lunatic economists ignore Adam Smith’s insight concerning businessmen and their relation to a free market.

These discussions are always so amusing – no one brings up Lyft, which tends to follow the same disruptive model, but without the accompanying feeling of entitlement to break the law. Lyft attempts to comply with existing law (momre or less – at least they pay their fines or otherwise settle in reasonable fashion), while undoubtedly working to also change it. And Lyft seems to do much better in terms of corporate policy in this area – https://en.wikipedia.org/wiki/Lyft#Safety

48 Slocum March 5, 2016 at 11:29 am

If Uber had been meek and asked for explicit permission everywhere before launching, it would have been squashed by the cartels before it got off the ground. Lyft, as the smaller, later entrant, is benefiting from the ride-sharing momentum that Uber created.

Ann Arbor (where I live) was a pretty typical case. Uber started operating. The taxi cartel’s allies in city government tried to stop it, sending cease and desist orders…which, of course, Uber ignored. University students found that, lo and behold, they were now able to get rides home from the bars at 2AM where cabs had previously been very hard to get. This was a clear net benefit in safety (Ann Arbor is, relatively speaking, a very safe city, but at 2AM, mobile-phone muggings and hit-and-run groping of drunk college girls are not unknown). So being able to get a ride at 2AM Saturday is not a trivial thing. Once this was all clear to the public, the cartel and their council folks had no choice but to fold their tents.

49 Nathan W March 5, 2016 at 1:08 pm

Anecdotally, the few times I’ve taken Uber, the conversation goes something like this: “A taxi would cost $50. We would never pay $50 for a taxi, we would take the bus instead. But for $25-30, that’s only double the $3 a pop for the bus. Let’s check if we can get a $25 fare right now.”

I’m not sure quite how much new business they create, but assuredly such anecdotes abound.

50 TMC March 5, 2016 at 2:07 pm

Totally agreed. This is the exact scenario where I’ve used Uber.

51 sort_of_knowledgeable March 5, 2016 at 2:09 pm

Both are happening. The price of taxi medallions is down indicating less use of traditional taxis, and I’ve talked to people in the outer edges of San Francisco who had to wait over an hour for a taxi since apparently taxis preferred the more lucrative downtown area.

52 Will Rinehart March 9, 2016 at 3:38 pm

Jared Meyer has a study on New York City that seems to suggest these companies are expanding the geographic market. See that paper here: http://www.manhattan-institute.org/pdf/ib_38.pdf. The top line findings: Uber is far less focused on Manhattan as compared to taxicabs. Also, the company is growing fastest in low-income neighborhoods, and serves predominately nonwhite neighborhoods

I also have a paper with my co-author Ben Gitis that shows an increase in these sectors using the nonemployer firm data, which you can find here: http://americanactionforum.org/research/independent-contractors-and-the-emerging-gig-economy I am working on a more rigorous analysis, and I know there are a number of problems with this study, but if you work out the year over year averages from 2002 to 2008 (the market dropped off in 2009), and then extrapolate those out, you see about 22,000 more establishments in the taxicab sector from 2009 to 2013 then the averages before. I’m working on a more complex time series diff-in-diff to get better numbers on this though.

53 Hazel Meade March 5, 2016 at 10:26 am

Portlandia made fun of regular taxi-cabs last week, so I think we’re winning.

https://www.youtube.com/watch?v=8FCW05tDEpc

54 carlolspln March 5, 2016 at 10:10 pm

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