Uber-charged and under-regulated
by David Atkins
Last week I wrote about how Republicans and neoliberal Dems will rue tying themselves too closely to car-sharing services like Uber and Lyft. While they may seem hip today, ultimately the glories of the "sharing economy" are just another thinly veiled flattening of the labor market that reduces wages and worker protections across the board. And, of course, ultimately the car-sharing transportation "revolution" will result in no jobs as Uber and Lyft fight it out to become the driverless vehicle cab companies of the future.
But there's another reason to wonder if this supposedly awesome deregulated transportation market is such a great idea: surge pricing.
For the 200,000 attendees of San Francisco's Outside Lands Music Festival this past weekend, where a three-day pass cost $275, Uber's hated "surge pricing" scheme made sure that exhausted revelers ponied up hundreds of dollars to get a few miles across town.
Uber has a habit of gouging their customers when they need it the most. They famously pulled their "surge pricing" trick during a blizzard that crippled New York last December, sticking riders with bills 7.75 times the normal rate.
By comparison, Uber's 5x rides in San Francisco were a bargain. But one passenger tells us that drivers were taking particularly long routes while under surge pricing—ostensibly to avoid the traffic leaving the festival.
For example, Alex's driver made a four mile trip into an 11 mile ordeal, racking up $391 in charges in the process.
This shouldn't be a surprise. Without fail, deregulated markets lead to gouging, rent-seeking and consumer exploitation. When politicians--whether out of foolish ignorance, blind ideology or simple greed--talk about how important it is for government to "get out of the way" so that the deregulated market can work its supposed magic, what they're really doing is throwing consumers into a shark tank.
That doesn't mean that, at least until self-driving cars put all the drivers out of business, a car-sharing model can't disrupt some staid business models. But they should be subject to the same consumer and wage protection regulations as everyone else. If they can do a better job than the competition while doing right by consumers under the watchful eyes of regulators working on behalf of the people, then more power to them.
But it's cringeworthy to watch politicians on both sides of the aisle suck up to Uber and Lyft's "sharing economy" as if it's the wave of the future. It's not. Google car is the future. Uber and Lyft may be a part of that future, but only if they observe the same rules designed to avoid consumer price gouging that most of the rest of American business is expected to follow.
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