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Uber and how it makes the case for laissez faire capitalism

Uber has been hit with complaints that it’s running “an Objectivist LARP,” a live-action role playing of a capitalist utopia from an Ayn Rand novel. That’s pretty much what it is doing, and the results are awesome. And the benefits don’t stop with more drivers and lower rates. Uber is ploughing a fair portion of its profits into another wave of technological innovation — self-driving cars — that promises to offer even greater improvements in the future.

All of this should counter some of the despair about how to promote free markets, especially among urban elites who have been programmed by their college educations to embrace the rhetoric of the Left. Give them half a chance, and they will flock to capitalist innovations run according to the laws of the market.

The problem is that they don’t want to admit it. That’s where the euphemism “ride-sharing” comes in. To cover up the capitalistic nature of the activity, they tell themselves they’re “sharing” something that they are quite obviously paying for, and paying at market rates. Imagine what could be accomplished if they were just willing to drop the euphemisms and embrace the free market.

Robert Tracinski

 

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23 comments to Uber and how it makes the case for laissez faire capitalism

  • Paul Marks

    Quite so.

  • mickc

    The problem the black cab people have is not Uber, it is the regulatory overhead which is loaded on them.

    It is not surprising they are furious, they aren’t being allowed to compete on similar terms.

  • Jim

    There’s a dark side to it – naturally – and naturally it involves gummints wanting a bigger slice. I spent a year a couple decades ago in a { – cold – } midwestern Canadian city; a taxi license was $32,000 a year there/then, I imagine it’s gone a long way up since. Unskilled immigrants formed the majority of the drivers, and to pay their costs they lived together, took turns driving and kept the taxi on the road 24/7. These guys are getting crushed by uber – so what then? Should the city be forced to lower the license fee? Whose pocket will they take the lost revenue out of?

    Additionally, a broker friend points-out that a lot of people driving uber don’t have car insurance for carrying paying passengers – this is naturally a whole lot more expensive – and if they’re in an accident while uber’ing, their insurance company is gonna put its hands in its pockets and walk away whistling a merry tune, as it should since the ubers’ policy applications are prima-facie fraudulent.

    Sad faces all’round. 13th Commandment – “Thou Shalt Not Win”…

  • CaptDMO

    Drop the euphemisms?
    Are you crazy?
    That would put my scare quotes/(sic) provider of business in a month, and allow for 2% more criticism by adults, where allowed.
    Think of the women and children!

  • CaptDMO

    *sigh* …OUT of business….

  • Rob Fisher

    mickc they *love* all those regulations when it means they can keep people out of the club and keep their prices high. Reaping what they sowed, I reckon.

  • Laird

    I don’t think that the euphemism “ride sharing” is the result of leftist elites avoiding acknowledging that these are capitalist enterprises as much as it is an attempt by Uber itself to avoid taxi licensing. If Uber cars were simply called “rides for hire” or something similar they would have no defense against the city’s demands for licensing and regulation.

    Jim, I’m not overly concerned about current holders of taxi medallions losing their value (technological change always creates winners and losers), but your point about insurance is an interesting one. I don’t know the answer, but I very much doubt that Uber hasn’t thought of this and figured out a solution (perhaps corporate-level insurance?). Does anyone know?

  • Mr Ed

    Jim

    These guys are getting crushed by uber

    Not at all, they are getting crushed by the costs incurred in speculating on joining a cartel that they presumably hoped would run indefinitely under the aegis of the City government, at the cost of a captive market with little alternative.

    To that I say.

  • Tedd

    CaptDMO is right: Supporters of the free market should embrace the euphemism “ride sharing” because it captures in spirit what the free market is (if not semantically correctly). I might sneer at “the left” for its constant shifting of terminology to suit the cause du jour but they have a point in that it works. Many people begin to have a more positive view of something if you give it a positive name (or stop using a name that has taken on negative connotations).

    Consider the following excerpt from the Wikipedia article on the “sharing economy.”

    Collaborative consumption as a phenomenon is a class of economic arrangements in which participants share access to products or services, rather than having individual ownership.

    The collaborative consumption model is used in online marketplaces such as eBay as well as emerging sectors such as social lending, peer-to-peer accommodation, peer-to-peer travel experiences, peer-to-peer task assignments or travel advising, car sharing or commute-bus sharing.

    These are clearly people who have a very odd notion of individual ownership given that nearly every example they cite of non individual ownership is only possible because of individual ownership. When faced with that degree of distortion of the language, packaging Uber as “ride sharing” rather than “free market capitalism” just makes sense.

    It’s also important to understand that Trancinski is only half right when he describes “ride sharing” (as applied to Uber) as a euphemism. For a lot of people what’s important about Uber is that it reduces the number of cars on the road (in their mind). So it is ride sharing in a sense that is important to a lot of people.

  • llamas

    @ Laird – Uber insures its users for (some very large amount) while they are using the service.

    llater,

    llamas.

  • Laird

    Thanks, llamas, that’s what I expected.

    Jim, you can report that back to your “broker friend” so he can stop spreading this inaccuracy.

  • Fred the Fourth

    Governments can be deeply twisted about reconciling their left-hand “green” initiatives and their right-hand revenue schemes.
    For instance, soon after the San Francisco Bay Bridge (Oakland – SF) instituted a reduced or free toll policy for “car pools” (at least 2 or 3 persons in a car, I don’t remember exactly) commuters in Oakland on the way to SF started informally stopping to pick up riders who had informally started congregating at certain well-traffic’d spots. They’d then zoom across the bridge, toll-free, with their full car. Usually there’d be a small exchange of cash for “gas money” or splitting the reduced toll.
    Win? Not so fast, me bucko.
    1) Oakland complained about the “traffic and crowd” problems at the pickup spots. (I saw the videos. Complaints unjustified.)
    2) The bridge toll agency fumed about being cheated out of toll revenue. (There was never a time when the toll booth queues dropped to 0, so what were they talking about? Bridge was always at capacity.)
    3) The several bus and commuter rail agencies fumed about reduced ridership. (Telling that people would prefer the informal system.)
    4) Police agencies warned about the dangers of picking up strangers. (OK, maybe, but I don’t recall ANY crimes being reported, and I believe they would have been trumpeted loudly.)
    I lost track of this issue eventually, and don’t know how it was resolved or if it’s still going on.

  • RRS

    Marketing is …???

    Buy one get one free.

    New! Bigger Box ! 24% more – free.

    Complimentary Limo service if you fly Virgin Upper Class.

    There is a free lunch – right here.
    (you were going to buy that drink anyway, weren’t you?)

    Join Tyler Cowen for: “Markets in Everything”

    What is “cost sharing”?

  • llamas

    @ Fred the Fourth – I don’t know how this played out in Oakland, but in NY, the law-enforcement arm of the Taxicab and Limo Bureau began busting people offering ‘gas money’ or ‘toll share’ rides across the GWB on the basis that they were ‘plying for hire or reward’, IOW, that they were unlicensed taxicabs. The minions of the State all tend to unite when their revenue streams are threatened.

    llater,

    llamas

  • Thailover

    mickc, but the cabbies aren’t furious at those heaping bureaucratic bullshit upon their heads. They’re furious at Uber. Statists are like a bucket of crabs. You don’t have to worry about your crabs crawling out to their freedom because when the top crabs try to make their escape, the other crabs pull them back down in the bucket to an “equal” level of lowly captivity. Statists would rather everyone be “equally” fucked rather than some people be fantastically better off, paving the way for others to be marginally better off.

    Remember, we must all be “equal”. (According to the cult of equal), and no amount of training, practice and instruction will turn me into Michael Jordan on the basketball court.
    But…we can break Michael Jordan’s legs….and arms…THEN we can be gloriously “equal” you see.

    That’s the purpose of our current phantom war with the Supply Side, to cripple and hamper any entrepreneur with ambition, so we can all strive to the lowest “equal” level of glorious state dependence you see.

  • Thailover

    Tedd said,
    “Supporters of the free market should embrace the euphemism “ride sharing” because it captures in spirit what the free market is (if not semantically correctly).”

    Uh…not in the slightest. I have no interest in feeding their pathology.
    What the free market is, is TRADE, as in people trading cash for goods or services or vice versa. ‘Voluntary trade to mutual benefit.

    “Sharing” is what one is forced to do when one’s 4th grade teacher says that you’re only allowed to partake in your bag of bubblegum in class when you “redistribute” it out to all the other kiddies in class too. Because forced redistribution is “fair” you see, because the outcome is “equal”, and the cult of equality always frowns upon anything else.

  • Tedd

    Thailover:

    So you want the free market but you’re not willing to compromise semantic purity to get it? That seems like cutting off your nose to spite your face.

  • Thailover

    Tedd,
    “Compromise semantic purity to get it?”

    No, I’m not willing to give furtherance to a lie. Rather we should openly discuss truth and challenge them to defend their ideas. The best anticeptic is sunlight.

  • Tedd

    Thailover:

    You seem to have missed the point entirely. When someone sings the praises of Uber but describes it as “ride sharing” it’s not a lie because the thing they are admiring about it is exactly the same thing I admire about it when I call it “an excellent example of the free market.” They’re merely describing it in terms that have positive value to them the way “free market” has to me. You’re reacting as though it was the words themselves that create the reality, but it’s the other way around: The ideas behind the words are what matter, not the words themselves.

  • Julie near Chicago

    Mr Ed, 🙂

  • mickc

    Thailover,
    Yes, what the blackcabbies should do is seek the abolition of their regulation, rather than whinge about Uber.

  • I don’t get it. If cabbies are getting crushed, spending all this money on license fees, etc, why don’t they just become Uber drivers? Start fresh.

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