This week brought more news of a globalized world—a simultaneous strike in Paris, London and Berlin against Uber—the service that allows people to summon cars through phone apps. Uber is itself a worldwide phenomenon. It can succeed anywhere there are a substantial number of smartphones, and that is rapidly becoming everywhere. In fact, the strikes backfired by giving publicity to Uber and encouraging more people to sign up.
While taxi drivers will continue to try to strangle the service, they will lose—quickly in some jurisdictions and slowly in others, like Virginia where regulators last week banned Uber. The advantages of Uber are ultimately too great to be denied and Uber-friendly jurisdictions will serve as demonstration projects. On Thursday The New York Times described Uber’s many benefits for consumers and for society. Most obviously, the service will bring more competition to an often highly regulated and sluggish market—the taxi industry. In particular, it will help poorer and middle-class consumers who are unable to find cabs at crucial times and are not regular users of higher-priced car services. It will shrink the carbon footprint, as fewer people will need to own cars and spend time looking for parking spaces.
Uber could also help decrease inequality of consumption, as I have previously argued that information technology generally does. Only the .01 percent can afford chauffeurs at their beck and call. But how different is the experience of having a car ready to pick you up at a moment’s notice? More and more people can ride like the millionaires of old.
Uber is in fact a striking example of how information technologies are going to make us better off in a more egalitarian way. The improved use of information creates opportunities for services that help us gain time and waste less energy. Information technology also makes consumption more equal, because the information permits cost saving efficiencies.
Some might worry that the technology will put taxi drivers out of work. Certainly some taxi drivers will do less well, but many can switch to becoming Uber drivers or drivers of competing services, like Lyft. In fact, as The New York Times’ article suggests by being more convenient app phone taxis expand the market for cars for hire, potentially leading to more jobs. Uber is the kind of innovation that may help the economy hum again. The faster regulators permit such services to disrupt the world, the faster we will reap the benefits.