Keep Government's Hands Off My Uber

I just had an incredible experience in San Francisco. I suppose I really should be referring to the fact that I was enjoying my 26th anniversary with my wonderful wife, and we truly did have a terrific time. But the really incredible experience was using Uber, the new un-taxicab service. This innovative company providing market-based rides between willing buyers and sellers without government interference would make Adam Smith a very happy camper.

As our overnight trip to the city was approaching I got the Uber app for my iPhone. I signed up and entered my credit card info. I familiarized myself with how the system worked and even tested out a hypothetical ride from our hotel to the music venue where we would see a show. It showed me the estimated cost and, if I were actually requesting a ride right now, the car would be at my pick-up location in three minutes. Cool, I thought; I look forward to trying this out.

As we enjoyed a cocktail and a view of the bay from our hotel my natural instincts were to think of a cab well ahead of time. Everyone knows it can take 30 minutes or more for your cab to arrive. I tapped Uber on my phone. It asked me if I wanted to be picked up at my present location, which it already knew, of course. Yes. It asked me where I wanted to go. Not knowing the address, I simply typed "Yoshi's", the name of the club. Immediately it told me that a car could pick us up in three minutes. However, it warned that we were in a period of peak pricing due to high demand and it asked if I was willing to pay up to twice the regular fare for the ride. I needed to get to our location, I was eager to try Uber and the fare still seemed reasonable, so I said Yes. Great, said Uber, your driver's name is Hung, he is driving a 2014 Prius and his license plate is blah blah blah. I told my wife we had better get going because our ride would arrive faster than we could get downstairs.

Outside on the curb there was a flurry of activity with tourists, traffic, cable cars, etc. I pulled out my phone and looked at Uber. There was a map of our location and little black cars moving around in real time. These were the Uber cars in the area. At that moment I got a phone call from a strange number. Hello, I said. It was Hung, our driver, asking where exactly we were standing because there were so many people. Then I spotted his car and the matching license plate. I waived to him and he said thanks, pulled a u-turn and we jumped in.

Hung was a young Asian guy. His Prius smelled brand new. I told him this was our first Uber experience and asked him how long he had been driving for Uber. He laughed sheepishly and in a thick Asian accent confessed this was only his second day. I prompted him for more info and he explained that he has a day job and only drives between 4pm-8pm. But he said these were good hours due to peak pricing and that he gets to keep 80% of the fares. And he only works when and if he wants to. He explained the requirements to drive for Uber are a clean DMV, certain insurance requirements and a 2005 or later vehicle in excellent condition. When we jumped out of the car at our destination Hung told us what the fare was, but I didn't hand him any cash. I just said thanks and got out. Within seconds I received an email with a receipt from Uber.

We paid about $20 going to our show and about $6 coming back, all because of the change in peak demand. This is a great market force that incentivizes more Uber drivers to get on the road when demand is high and fewer when demand is low. Very logical, but I've never seen that with a traditional taxi company. I can also request Black Car service, which appears to be fancier cars with professional drivers, or there is UberXL, which appears to be SUVs capable of carrying more passengers. I also saw UberTaxi, which appears to be traditional taxis that somehow also serve Uber customers. Although, I'm not sure why I would select that one since most taxis I've been in are dirty and smelly and all three Uber cars I rode in were new and clean.

Speaking of the taxi companies, they are hopping mad about Uber-- and understandably so. After all, taxi companies are heavily regulated by local governments and pay thousands of dollars for the privilege of being in business. So now there are lawsuits, government hearings, taxi driver protest rallies and more, all in opposition to this great new service called Uber. But the taxi drivers (and the public) should really be upset with the government that is needlessly interferring with the free market place. Of course, they will argue it is about public safety and the like. Yet I saw Uber users all over town hopping into the back of brand new cars that arrived in mere minutes, driven by clean cut young men and women. If safety or ripoffs become a problem with Uber, the market will react to that and people won't use it. But I wouldn't count on it.

I'd say the biggest threat to Uber is oppressive government that can't stand it when a market-driven, private sector solution appears and works well without any control by bureaucrats and without any fees, fines, or tarriffs being paid by the owners. But don't worry government folks, you'll get your taxes. And with Uber now worth $17 billion, you'll probably get plenty.