Video: Russell Brand Goes On Tirade Against Uber

There’s no denying that Uber engages in some shady practices to grow, and that not all their policies are perfect, both for customers and for drivers. That being said, in just a few years they’ve almost singlehandedly taken on what has historically been one of the most monopolized, protected industries in the world. And that’s incredible.

While there are no doubt good taxi drivers out there, prior to Uber I grew so frustrated by the lack of customer service and sometimes downright rudeness I experienced in cabs. And that’s all sort of history thanks to Uber, given the instant feedback loop.

The battle for Uber is fierce, given the lobbying organizations many taxi companies have. Outside the US the fight against Uber has even gotten violent at times, as we recently saw in Paris. Absolutely disgusting.

However, it looks like London cabbies are taking a different, more lighthearted approach towards attacking Uber. Specifically, comedian Russell Brand seems to have taken on the cause, and uploaded a video a couple of days ago lashing out against Uber. The video is described as follows:

Cabbies livelihoods are under threat from Uber which avoids paying UK taxes. But it’s OK because David Cameron is best mates with Uber’s top brass.

Here’s the video:

He goes about the video in a cute way, I suppose, and there’s no denying he has some valid points. Like I said, Uber is far from perfect.

But he also makes a lot of silly points. For example, referring to Uber and other multi-national corporations, Brand says “once these people have got us monopolized I have a feeling they’re in this for profits and prices might start going up.”

Well, first of all, they’re already in it for the profits. And second of all, are you really going to complain that Uber is monopolizing things? You mean kind of how the cabbies (who you’re defending) have had it for decades? C’mon now, that doesn’t really hold up. Uber is the solution to a heavily monopolized industry… not the other way around.

Then he complains about surge pricing during the tube strike in London, and about how Uber was charging ridiculous rates. Does anyone like surge pricing? Of course not. But it’s a simple function of supply and demand. UberX drivers aren’t going to be on the roads sitting in bumper to bumper traffic for hours if there’s no surge pricing. That’s just a reality of the Uber business model. Drivers are going to work when they know they can make money, and that’s not during a strike with jammed roads and “regular” pricing.

Meanwhile Russell’s cabbie friend (who seems like a really cool guy) mentions how he had a “human” touch during the strike, and said he told customers “I’ll tell you the fare when we get there.” Sorry, that’s better than (transparent) surge pricing how, exactly?

Of course what this conveniently leaves out is that Uber saves people a lot of money. Just look at the flat rate fares between Heathrow Airport and London:

Uber-London-Rates

Those are substantially lower than the range of fares charged by taxis, which can be more than double as much:

London-Taxi-Fares

Uber saves people money, and ultimately also lets people earn extra money. Nobody is being forced to work for Uber, and clearly the model is working for drivers, or they wouldn’t participate.

All that being said, if there’s one city in the world where I do feel bad for cabbies in the Uber battle, it’s London. They’re just about the most professional and well trained taxi drivers you’ll find anywhere.

But that doesn’t negate the fact that Uber adds value as well.

What do you make of Russell Brand’s Uber tirade?

(Tip of the hat to TravelSkills)

Comments

  1. Russell Brand is funny, when he sticks to comedy. But when he starts talking about politics, he sounds unbelievably arrogant.

  2. I dont like cabs they are uncomfortable and just rubbish in general, now if we are talking merc cabs in Singapore sure.. but in London cmon.. I have been to london a few times and Ive never used a black cab ever.. I use Addison Lee which is great for peak hours and long distances and I also used it for short rides.. but I think Uber would be better for that. The min charge for merc E class for addison less is £20.. which I think is excessive for short rides.

  3. Cabs are not a monopoly in the sense that one entity receives the profits.

    They are a regulated industry where the municipality dictates the product and pricing. And many players receive their share of the profits.

    That’s not at all a monopoly.

    Something most of the ‘experts’ who rail on cabs miss.

    Reality is Uber has used some inexcusable tactics to grow and their product is not very differentiated. I use their competitors first. And if a cab is in sight I grab that – why wait. Then Uber if the other options aren’t available.

    It’s not hard to open up more than one app.

  4. Big Uber fan and use them exclusively in most of my travels, both domestic and foreign. The one exception is London where I prefer the black cabs. London cabs are clean, spacious, and have drivers who actually know where they’re going and the best way to get there. If cabs everywhere were like London, there’d be no market for Uber. That said, you’d be insane to take anything other than the tube in central London, but that’s another issue altogether.

  5. Ben — Putting aside the silliness of the video, I think you missed a few of the points on pricing:

    1. Taxis are a monopoly, but they are a regulated monopoly; thus, they cannot just charge what they want (at least as the metered fare). They must charge the fare set by a regulator. Uber is not regulated and its pricing is limited only by market competition. Brand’s point is that if Uber effectively becomes an monopoly operator (or, due to its size, commands pricing power in the market), there is no cap on where its prices could go. Uber may be cheaper today at non-surge pricing, but in many cases its fares are also artificially low as it seeks to build market presence. Those cheap fares will certainly increase if Uber gains greater market control.

    2. On the London tube strike, I think the cabbie’s point was that the roads were clogged and, as a result, a trip might have a high metered fare (i.e. because the meter keeps running while sitting in traffic). His comment that he would “discuss” the fare was likely in the context of charging less than the metered amount. Once again, a cabbie cannot lawfully charge more than the meter (which is not to say that many don’t try . . . but that’s not what the cabbie was saying in the video). The contrast was to the lack of flexibility in Uber’s pricing . . . they also charge by the minute and by the mile, but the end fare is the end fare; you can’t negotiate it down with the driver.

    This is not to say that the points in the video were good or bad arguments in the cab vs. Uber debate. But they should be viewed in the proper context.

  6. The first time I connected in LHR I wanted a taxi to one of the Bath Road hotels. 15 GBP, cash only. There was also a line (sorry, queue) 15 people deep and I had only seen one taxi in the past 5 minutes (T1 late at night). I took the free bus instead.

    I have absolutely no sympathy that they are now crying foul. Maybe if prices were reasonable (no absurd minimum just to leave the airport), they didn’t have an irrational requirement of cash at an international airport where most people just want to quickly get to a hotel for an overnight, and they actually showed up at the less popular terminals late at night, I’d be more sympathetic. Next time? UberX the moment I clear customs.

  7. Livery vehicles bka mini-cabs have been the alternative to black cabs that real Londoners have used for decades. And they’re often shady and occasionally outright dangerous, especially for women passengers. So at least Uber is fulfilling a need that has always existed in a somewhat safer, more controlled manner. It’s not like banning Uber in London will instantly revert all passenger traffic back to black cabs.

    Also, the people who bitch and moan about surge pricing are the worst. They just don’t get it.

  8. Well I was in London during the tube strike last Thursday. The roads were a complete gridlock!

    Uber had surge pricing as high as 2.9x at times, but when I needed a car around 12 noon there was no surge pricing in effect. My lucky day! However after requesting cars 8 times without success (5 times the request didn’t get accepted, twice it was accepted and then the driver cancelled), I was forced to take a cab.

    What would have been an 18 minute commute via tube for under £9 for 2 people ended up costing £20 in a cab. What’s the point of Uber when drivers just cancel your requests when the traffic is heavy?

  9. i always use Lyft if possible. they don’t engage in unethical business practices (uber certainly does, they are known for that).
    also, Lyft offers $5 rides in Manhattan below 97th street… that’s a bargain uber can’t beat.

  10. Russell Brand is the ugliest, most stupid, idiotic, moronic human being that I know. I’d rather have lunch with Osama Bin Laden’s corpse.

  11. Ha, this is a super interesting discussion. As you’ll see in my forthcoming entries on my trip report series when I’m in London, I found Uber to be a game-changer. This is because:

    (1) London black cabs are terrific, yes, and incredibly knowledgeable and friendly. And TREMENDOUSLY EXPENSIVE. Prohibitively so, for all but the shortest rides.

    (2) The Tube sort of sucks. There, I said it. It’s pricey for what it is, its service is far from reliable, its pricing system is confusing, and the stations aren’t nearly as densely placed as, say, NYC or Paris’ are, meaning that you still likely have to walk 5-10 minutes to/from any Tube station.

    (3) Ubers in London are omnipresent (always appeared within 1 minute after calling them up on the app), very reasonably priced ($15 to get between the West End and East End, which would cost exponentially more in a black cab), and friendly.

    The fact is Uber in London allows efficient point-to-point transportation at an accessible cost, and is far more reliable than TFL (the city’s public transportation agency).

    Yes, black cabs are chatty and friendly and clean, and yes they know the route to just about anywhere, but my Ubers always seemed to get me to my destination quickly. They used GPS and Waze, but what’s so wrong with that?

    Why should we pay a Black Cab driver 2x as much because he’s studied the roads for years, when technology allows that knowledge to be democratized? I of course feel bad for these cab drivers who put their heart and soul into learning London’s street system, but I also feel bad for travel agents, telephone operators, and other folks whose occupations have been rendered ineffective by the internet age.

    Given that Russell Brand isn’t likely counting pennies when he’s getting around London and isn’t on any sort of limited budget, it’s very easy for him to champion the cause of the black cab in London without seeing how Uber has revolutionized life in London for those who don’t have millions to spare.

  12. The fight against Uber is all about protecting old business models. Uber has made it possible for the consumer to save money and get better service. These legacy type providers will go the way of the pay phone if they don’t adapt. Surprised the cab companies haven’t developed a cabby app to compete against Uber.

  13. I don’t know if I would agree with many people’s view that Uber does unethical things. Honestly the only thing they’ve done that bothers me is not being very careful with data privacy (re: articles about how loose they were in certain cities with tracking individual riders trips, displaying that data to reporters, maliciously following some woman who was an ex of an uber exec, etc.). Certainly sad when I feel Google is far safer with my data than Uber…

    In terms of surge pricing though, I don’t see anything wrong with it. It is highly capitalist / free market in spirit so I can understand some Europeans not finding it kosher but it is transparent and you always have the alternative which is getting a cab!! I remember using Uber before it was so big and before surge pricing and trying to get an Uber during rain storms or in rush hour was horrendous. If I’m in a rush, I like having the option of paying more to get a car right away. If I’m not in a rush then I can take a cab or public transit. You can even get fare estimates for your journey before deciding to request a driver so what’s the issue? I also believe in good competition so I use competitors like Lyft sometimes but Uber has so many options, the greatest amount of scale, and familiarity so it’s my go to app.

    If you don’t like uber…just don’t use it.

  14. Uber has made it possible for cheaper service because they ignore regulations that are in place for a reason. Good or bad, you dont just get away with ignoring how the game is played and then touting that you are so much more amazing than the competition as if you are both playing on the same level from the start.

  15. Also if anyone is in doubt about Ubers activities just look at how they make the drivers contractors instead of employees.

  16. is he forgetting that cab drivers in the US and UK dont pay taxes on all of their profits. In the US there are plenty of taxis that don’t pay taxes on their cash profits.They also are hesitant to drive for uber because all of their government benefits will be taken away if they are paid by credit card because its all traceable. In the US plenty of taxi drivers don’t declare all of their cash income below the minimum to receive government benefits. Pay taxes on all of the money you make!

  17. He kind made a point thought. You know, many US companies do not have good global images, including brands like Google or Apple. These companies tried lots of ways to avoid paying taxes in Europe by moving their European headquarters to low tax rate area like Ireland.

  18. Nick, I live in Britain about an hour from London so I find myself there a lot, the reason it is so important that black cabs know the London roads in and out is that it is such a congested city and they need to be able to figure out what the quickest way is given the current traffic, and that is something that a satnav will never be able to master even those with live traffic updates. And as for your comment that tubes are “far from reliable” what makes you say this? The trains come within minutes of each other so you never have to wait more than a couple of minutes. And the fact that the stations are not densely packed reduces journey times as the tube isn’t constantly stopping load and unload passengers and it allows the train to reach higher speeds.

  19. @Oliver: between strikes and service interruptions and track work, the Tube is often not in full service, so I would not personally consider it as reliable as, say, an Uber. Moreover, when I went to buy Tube tickets at Victoria Station, the line was 20 minutes long, at a minimum, snaking around and back several times. Why bother with that?

  20. @Nick because of how extensive the tube network is I don’t think I have ever really been effected by service interruptions as there is always a way around it, and as for you experiencing 20 minute queues at Victoria station I highly doubt that is true because I’ve never seen anything like that, but even so you can pay contactless on your credit card so you don’t even need a tube ticket.

  21. @Oliver: I wish I’d been able to do that, but I think I was told the contactless pay system only works on UK credit cards? How does it work, exactly?

  22. I found myself moving away from Uber, to be honest. The ride experience is getting worse and worse with UberX and I honestly think a lot of times taxi drivers in their native cities do know the roads and traffic pattern a lot better than UberX drivers. Washington, DC is a prime example. Yes, DC’s taxis are not the prettiest or cleanest, but neither are most of UberX cars. On the flip side, DC taxis often know the back roads and can help you get around some of the worst traffic jams. As for the case of Central London, I honestly don’t understand why no more people use the Santander bike share, it’s £2 for 24 hours, that is less than one Zone 1 underground fare. Not to mention, you are free from (car) traffic!

  23. The problem with Uber is that they want to ignore all existing regulation (good or bad) because the “entrepreneurs” behind it seem to think that openly flouting the law is a viable business plan.

    Sure, concepts like taxi medallions are certainly outmoded. But something like a Commercial Driver License? Or commercial auto loans? Or the proper kind of insurance?

    I will not dispute that many laws exist solely to protect the profits of medallion holders. But in fairness, no one here can dispute that many other existing laws are designed to protect drivers and passengers. A company that refuses to acknowledge any of those laws, good or bad, smells pretty foul to me.

  24. I’m no great uber fan. Here’s something to know about London cabbies. There’s no medallion system, cabbies are mainly owner drivers, small business people. The barrier to entry (to receive the regulated fares) is 2 years training and a tough exam (the knowledge). Cabbies who pass this exam and work hard can earn a decent secure middle class income.

    There is no such guarantee with uber. No guarantee of we’ll trained drivers and certainly no guarantee of a decent income for the drivers. What’s more the profits flow out of the UK to a global company. And while I have no knowledge of their tax affairs I would be surprised if there were the only multinational that didn’t have a complex web of structures to minimise the tax paid on their incomes.

    So as much as Russel Brand is a bit of a tit he does have a point.

  25. Ben, I’m a big fan, but I find this post misguided, self-serving, and in many ways simply erroneous.

    “Uber is the solution to a heavily monopolized industry… not the other way around.”

    Whaa? Find me one city where there’s a monopoly on cabs. Every major city has a dozen or more cab companies, and often many more independent medallion owners.

    The reason you may see a “monopoly” is because cabs tend to look and function the same way, despite being under disparate ownership. This isn’t the sign of monopolistic practice; it’s the sign of a heavily REGULATED industry.

    Uber hasn’t broken in by challenging a monopoly; it’s broken in by breaking laws and ignoring regulations. In this brave new Uber world, transportation functions not according to law, but according to Goldman Sachs’ say-so. See the problem?

    “Then he complains about surge pricing during the tube strike in London, and about how Uber was charging ridiculous rates. Does anyone like surge pricing? Of course not. But it’s a simple function of supply and demand. UberX drivers aren’t going to be on the roads sitting in bumper to bumper traffic for hours if there’s no surge pricing. That’s just a reality of the Uber business model. ”

    DING DING DING! THAT’S EXACTLY BRAND’S POINT! That’s why it’s a BAD business model! Transportation has gone from being a more-or-less public utility with predictable, subsidized pricing to something based on “supply and demand.” That’s just more privatization (or at least deregulation) of what’s always been an essentially public (or at least regulated) civic infrastructure. It’s another piece of our cities given away to banks.

    “Uber saves people money, and ultimately also lets people earn extra money. Nobody is being forced to work for Uber, and clearly the model is working for drivers, or they wouldn’t participate.”

    I… what? Consider this sentence: “Nobody was forcing freed slaves to work as sharecroppers on their former masters’ plantations, so clearly the model was working out for them, or they wouldn’t have participated.” Agree/disagree?

    [And no, of course I’m not saying that Uber is comparable to the treatment of ex-slaves in the post-war South; I’m merely pointing out that your major premise of, “Any job must be fine if people will do it” is, um, morally repugnant, and would justify turning back the clock on 120 years of employee protection laws.]

    There are, of course, many anecdotal stories of Uber drivers feeling increasingly pinched by Goldman Sachs / Google, though it’s too early to know if that’s a trend or a aberration. I suspect, however, that these companies didn’t get into the cab business in order to provide their drivers with the benefits that cabbies have spent decades fighting hard for.

    I suspect (though I don’t know) that Uber will amount to yet another assault on the American worker (and the English worker and the French worker and and and), demanding more of their time for less money.

    But hey, if it prevents your “frustrat[ion]” with a “lack of customer service,” who cares, right?

  26. Ugh! Less than an hour ago, I just got off a delayed Virgin America flight at LAX and requested an Uber Black. Took a couple minutes to get assigned a car. Then input the destination address (45 minute drive away), then several minutes later received text from driver asking for which door at LAX. Replied immediately, then he asked for my destination. I thought that odd since was already provided thru the app, but provided the details again within a minute of receiving the request. Then he asks for the terminal door again. I provided it again… And he replies, “On my way.”

    We wait, and wait, and wait in front of the designated door. Finally, after about 20 minutes, a message flashes up on my screen from the Uber app, and I glanced at it and accidentally clicked on it before I could read it. It appeared to indicate that sorry the driver has cancelled the pickup.

    Since I was unsure whether I read it correctly, I tried calling him and the call rang twice then disconnected. I called again and went to voicemail. So I texted in reply to his “on my way,” and got no answer.

    Pretty lame and outrageous. Uber expects that a customer will then just risk another 30-45 mins trying to get another car?

    I’ve used Uber many times, easily totaling well into the 4 digits on rides, mostly when traveling, and have had nearly uniformly positive results. But this just really pisses me off. Totally unprofessional and unacceptable.

    Thankfully there was a short line of taxis waiting steps away, and no line to speak of.

    So, the question is how do you rate a driver/complain when the ride doesn’t show up in your history?

  27. How do people not realize that uber is an unsafe method of transportation that should be shut down for tax evasion. Seriously, (no offense to uber riders) but do you really think its a good idea to jump into a (not regulated) car with an (unregulated) driver. Ask yourself a question, would you hitchhike, because this is solely a high tech method of hitchhiking.

  28. Oh ya, and I forgot about the complete lack of insurance, injured in an uber, not a dime of coverage.

  29. Adrian hits the nail on the head on the issue of UberX, UberPop, and whatever else they call it globally. I won’t use UberX not for philosophical or anti-corporate issues, but for the mere fact that most UberX drivers are under-insured or not at all insured for commercial transport. You can argue the legalities until the cows come home, but if you get hurt in an UberX car, their insurance won’t cover it properly and your insurance won’t cover it either. I use and support Uber Black because drivers are properly licensed, insured, and largely bonded. UberX is a complete liability crap shoot. I actually can’t believe that the Uber objectors the world over haven’t focused on this issue. It’s not a sexy argument and most people don’t want to think about it, but it’s a liability disaster waiting to happen.

  30. I cannot, offhand, think of a single city with a monopoly cab system. Indeed, cabs are generally the very antithesis of monopolies being frequently owned and operated by the same person. I believe that’s the case in London. In New York we have a mix of individual owners and companies that own multiple cabs but nothing approaching a monopoly.

    The industry is, in general, highly regulated. Where it’s not regulated, people tend to be less happy with the product.

    Uber intends to establish a monopoly on access to private car transportation while avoiding any regulation of their operations. As an unregulated monopoly they are the precise opposite of normal cab services, which are regulated polypolies.

  31. I won’t pretend to understand the medallion systems, but to me such regulation makes fundamental sense in any city with a fixed size… limiting the number of for-hire cars on the road keeps the traffic in check and caps carbon emission.

    When Uber ignores the system and dumps an inflow of vehicles into the same city streets, it ought to create more congestion, pollution, etc. In the short term it might be a flashy idea, but as it grows it would be damaging to everyone.

  32. In my view, the existing cab/taxi systems are generally only broken and not fit for purpose when you have free-riders – who don’t do any of the driving themselves – massively skimming off the cost of the service through things like just owning the taxi plate or equivalent (whatever “asset” the regulator has created to limit numbers, which is pure protectionism). In these cases, far too much of the charges end up in the pockets of free-riders, and not in the driver’s, thus you end up with only the most marginal drivers who do this job (anyone decent can get a far better paying job, than putting up with the pittance of earnings left over after the free-riders have taken their huge slice).

    In my view, the only barriers to entry should be the having the requisite knowledge, skill, attributes, and the appropriate tools (vehicle, insurance, recording and auditing systems, and fair price dispatch/co-ord system). Uber doesn’t quite do that, but it’s disruption is likely to drag the industry towards that (and perhaps then, we will really get the taxis/cabs we deserve).

  33. Nobody is forcing people to use Uber, just like nobody forced me to take the Tube instead of a Hackney cab because the former was cheaper.

    I really don’t get the grudge with Uber. If you don’t like it, don’t use it – there are plenty of alternatives out there.

  34. Random observations:

    Why does Russell Brand always appear to be in desperate need of a bath?

    On the subject of “monopolies”, I think a lot of the posters here are missing the point on regular cabs. Yes, they are owned and operated by different companies, and in some places some are operated by individuals. But in the vast majority of places (at least in the West, Japan, etc.) the prices are set by a government agency, which also regulates the number of cabs allowed to operate. So while there’s a surface appearance of competition, there really isn’t. (@LarryinNYC, you have heard of the TLC, right?)

    On “surge pricing”, Uber has taken a lot of flack, and I think some of it is justified – the immense price increases when people were trying to get away from the bombing in Sydney a few months back were abhorrent, and Uber had to back down. The increases also encourage drivers who may be too tired to safely drive to stay on the road longer, and there’s no incremental cost to Uber but they still take their percentage cut anyway. I think the “supply and demand” argument holds stronger (and I’m less concerned about driver fatigue) in cases like the London tube strike, where both drivers and potential passengers can plan in advance.

    I also have to admit that I find the whole business of online “disruptors” prattling on about the “sharing economy” annoying. With companies like Uber, you aren’t “sharing” anything, you’re buying someone’s labour time and rental of their car in exchange for money. After expenses, the drivers don’t make much money (I’ve seen articles showing some Uber X drivers averaging under $9 an hour, and at least two of the articles were considering routine maintenance but no recognition of the increased depreciation on the car from using it for Uber.) Now driving a yellow cab in a place like New York isn’t exactly a high-paying job either, but at leas there’s no pretentious dribble about “sharing”.

  35. “Dribble” should be “drivel”, sorry.

    But on further review, I guess “dribble” sort of works too?

  36. As an Uber fan and user, I also recognize that some of their business practices (surge pricing, price wars that inflict pain on drivers rather than Uber, lack of accountability over driver’s actions, lack of a tip function within the app) are anti employee and are abusive. You can use the service while encouraging Uber to do better.

  37. Why anyone listens to him is beyond me. He’s a complete and utter moron with a tenuous grasp on reality (quite possibly due to his numerous drug addictions – his rehabilitation being the one thing I can respect him for) and is a hypocrite to boot. Spending the day with the “common man” pretending he cares talking about how evil the rich are, then going back to his suite at the Ritz to get ready for a swanky showbiz party.

  38. Adrian Wattamaniuk – yes I would hitch hike (though I’ve yet to discover a hitch hike that provides real time GPS location tracking and a record of the driver and license number).

    But then I’m not American which could explain why I don’t have the stereotypical “FEAR EVERYTHING!” mentality.

  39. I’m amazed at how many people continue to defend their choice to patron a business that thrives by ignoring the law and exploiting people who have no other option.

    Just for a second, imagine a burger joint that serves a pretty good sandwich for $10. They’re clean enough (but not immaculate), tasty enough (but clearly not winning a James Beard), and always available. They pay their employees $20/hour and provide benefits to them.

    Now a second burger joint opens up next door. They sell a pretty similar burger for $7. They don’t pay taxes, they won’t serve a burger to minorities or the poor, and they’ve never been inspected by the health department. The local authorities in many locales have shut them down for these violations. They pay their employees only $8/hour without benefits, and they’ve even been attempting to create a new classification of worker that allows them to get around employee protections that have been enshrined in law for decades.

    Is that worth the $3 you saved?

    @Anthony – “voting with your wallet” is a common theme in the U.S., the idea being that many businesses really don’t care in the slightest about your opinion until it affects their profits.

    @Callum – rushing in to defend an American company and then taking a jab at the American people? Did I read that right?

  40. It’s hard to imagine life without Uber. Too bad for the cab industry. What value does it add compared to Uber? Taxis just got disintermediated. 🙂 In the Bay Area, there’s no need to rent a car, in that Uber takes me to all my appointments without having to worry about directions, traffic and all that. All the Uber trips are often less per day than a rental car, depending upon the location.

    Put it this way, what do consumers say? Are people abandoning Uber for taxi service?

    BTW who founded Yellow Cab? Well, it was the same person who founded Hertz, namely the eponymous Sandor Hertz. But this time, Hertz hasn’t taken the initiative to reinvent itself in the form of Uber. Hertz has a market cap of $12.5 bn, Uber, $40 bn.

  41. Economist who works on Uber-related issues here. I’ll just say the following:

    – Uber cars have outrageously strong insurance for passengers, provide by Uber itself. It is not at all “like hitchhiking.”
    – Taxicab drivers are notorious for underpaying taxes. Why do you think they always insist on cash instead of card? It’s a bit rich to accuse Uber of being the ones who don’t pay tax.
    – It *is* unfair that Uber does not have to follow many expensive regulations, but the answer is to change the regulations, not to ban Uber. For instance, in Toronto, there is a law that will force all cabs to be handicap accessible. In practice, this means forcing all cabs to be cars that get terrible gas mileage. It is madness.
    – Complaints about surge pricing strike me as very strange. In the old taxi world, if it was raining at 6pm, the price of a taxi was infinity, since you would never be able to find one. Because of Uber, there are many drivers willing to head out at bar closing time, at rush hours, etc.; this increase in supply is a good thing.
    – I talk to my Uber driver out of professional interest almost every ride. The huge majority of drivers I get are driving part-time and have another full-time job. There are very, very few options for someone who wants to make an extra $20/hour after expenses working 10 or so hours a week, so that they can pay for school/help save for a house/whatever. From the number of people driving for Uber, clearly there is a ton of demand from workers for these types of opportunities. Since demand for taxis is so much higher during rush hour and Fri/Sat night, it is exactly the sort of industry where part-time workers make the most sense.
    – On diversity, the number of women and underrepresented minorities I see in Uber cars is much higher than what I have seen in taxis in any city I have ever been to. In many cities, taxi drivers are nearly all men, and moreso are nearly always of the same ethnicity as whoever happens to own a company with a large number of medallions.
    – If Uber were exactly the same price as taxis, it would still completely dominate because 1) no need to hassle over payment methods (“sorry, sir, card machine not working”), 2) pickup right at the door without waiting outside to find some cab to hail, 3) driving ratings push out the old cars and unsafe drivers very quickly, 4) receipts and route map emailed to you prevent you from being ripped off. Those are four massive improvements in the cab experience even if Uber didn’t result in cheaper fares.
    – As a matter of public policy, cabs driving around looking for fares on the street are unsafe. Uber drivers tend to just sit tight while waiting for a fare, using less gas, causing less traffic, and keeping their eye on the road instead of scanning the sidewalk for a fare.
    – As for taxis being a monopoly or not, it is an industry with “regulatory capture” not “regulation”. Most cities have a very small number of large taxi groups, and the owners of these groups are often politically powerful. Many regulations in the taxi industry have the explicit goal of limiting competition and keeping prices high, not of benefiting the consumer. Given the extent to which the taxi cartels work together, I don’t think referring to the industry in many cities as “monopolized” is much of a stretch. And as for Uber’s market power in the long run, it is vastly overblown: if Uber tried to jack up fares, people would switch to Lyft or Hailo or whatever other service popped up. In this sense, markets work.

  42. @Josh Two weeks ago the Singapore MRT (Rail transit) broke down at peak hour. Uber’s surge pricing kicked in and went up to as high as 5x. Lots of complaints from commuters who either didn’t notice the 5x multiplier (or noticed it but didn’t care) the next day.

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