Hart: Economic sense: Uber vs. cabs not 'fare' fight

Hart: Economic sense: Uber vs. cabs not 'fare' fight

April 4th, 2014 by By Ron Hart in Opinion Columns

I was just out of grad school, broke, and working in New York City. Buddies and I split a Brooklyn apartment where we spent five hours a night sleeping.

Everything in New York is expensive, particularly cabs. We used gypsy cabs to take us home late at night. Traditional Yellow Cabs would not go to Brooklyn, and, if they did, the fare was twice the rate of our guy, Raul. His motto was, "We will go anywhere; we ain't yellow."

I have always had a soft spot for a hardworking immigrants pursuing the American Dream. Raul was reliable and affordable.

It was clear to me even then that certain things are expensive because they are government-regulated. Invariably, the most-expensive products and services are the most regulated: Cable, health care, energy, education, etc. Costs rise, and value declines, whenever the visible and sticky hand of government is involved. When the "invisible hand" of the free market is allowed to operate unfettered, costs go down and value goes up.

In the case of the taxi monopoly, much of that governmental "regulating cost" takes the form of bribing, donating to and taking care of the politicians who protect it.

Now comes the app-based industry disrupter to those cab cartels: Uber. Instead of calling a fixed-rate, local cab company and hoping it does not send a felon in a 20-year-old nasty car that he probably lives in, you can use your cellphone to e-hail an eager-to-please owner/operator of a nice Lincoln Town Car or GMC Yukon.

Uber drivers are remarkably efficient and affordable. They are courteous, tell you when they will pick you up, send you a receipt (no tipping), and have bottled water for you. You rate them online immediately, and they are paid accordingly.

The system works for the consumer -- but not if some politicians have their way.

What is unfolding now with Uber cabs is the itching attempt by big, urban (a.k.a. Democratic) governments to run them out of business. Government bureaucrats looked at Uber and realized that something was wrong: They were not getting a cut. Too much value was going to the customer!

Government's grimy hands are everywhere. It is not unusual for me to rent a $19-a-day-car on Hotwire. The government taxes and fees can total about as much as the car rental charges, and for what? Hertz or Dollar bought the car (including taxes), registered it (including taxes), got the car to the airport, booked my reservation, shuttled me to the car or delivered the car to me, and took it back. They pay additional city, state and federal taxes on profits.

If you think there is not a cabal of government and the cab companies they "regulate," look no further than New York City. I have traveled there monthly for 30 years. Why are there no trains to Manhattan from any of the airports? You have to take cabs, and nothing is done to encourage cab sharing to the city. In New York, the only way a cab is "shared" is when a cab breaks down, and one New Yorker takes the hubcaps while another steals the tires.

Even the credit card tipping system in taxis starts at 20 percent and only goes higher. Prices are fixed. It's a quasimonopoly.

New York cabbies drive dangerously. Few taxis have shocks, and they smell. In a cab ride during Fashion Week in New York, my driver kept introducing his new fragrance.

Uber cabs would put many NYC cabbies out of business. Put out of work by American ingenuity, they would be reduced to hanging around all day, angry at America. What could go wrong?

Ron Hart, a libertarian syndicated op-ed humorist, award-winning author and TV/radio commentator can be reached at Ron@RonaldHart.com or visit www.RonaldHart.com