Why Uber is making America better

So just who is your Uber driver?
So just who is your Uber driver?   

It figures it's taxi drivers who make up what looks like the fastest growing group of Americans who realize that too much government isn't good for business … especially their business!

After all, taxi and limo drivers see a lot of America and meet a lot of new people every day. And seeing is believing when it comes to free-market capitalism.



In a fascinating new report by Princeton economist Alan Krueger and Uber researcher Jonathan Hall, we learn that Uber is paying drivers more, attracting more new drivers, and employing more women than traditional taxi companies.

Why? Because Uber brings a big whiff of freedom to go along with that new car smell.

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It's simple logic that it's better to work for a company that allows its people to set their own hours, bid on potential customers, and not straddle them with exorbitant government-regulated taxi medallion fees. But too many Americans would probably be surprised to learn that even a government-imposed and government-regulated monopoly like the taxi industry doesn't even really help that monopolized business either!

Let's just briefly back up and explain how official state and city-controlled taxi services work. Fares and taxi meters are tightly regulated. Territories are protected. And high bars to entry exist, like in New York City where taxi medallions went for as much as $1.05 million each as recently as 2013.

But even with all that "help" from big government, we now see Uber provides its people with basically a better paying and more attractive job. And that's crucial in an industry where so many of the "workers" are really owner-operators.

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One very hard economic result is already evident for those owner operators. That $1.05 million medallion price in New York is now down to an average $950,000 and medallion prices are down even more drastically in Boston and Chicago.

Now before you accuse me of supporting a "Wild West" dissolution of all business regulation, remember that Uber drivers still have to have valid drivers' licenses and insurance. They still have to pay sales taxes and income taxes. Isn't that enough?

Don't ask me, ask the millions of American Uber drivers and customers who are saying an emphatic "yes!"

And the fact that so many more women are taking Uber jobs should not be underestimated. I suspect having the right to choose which customers to serve is a key safety plus for women that's almost as attractive to them as the right to work only when their kids are in school, etc.

And notice how "government rules" didn't make Uber a better place to work with equal pay for women — the free market did.

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Customers are better off, too. Flexible pricing isn't the only reason. Riders also get more choices and they get to control how they contact their potential drivers.

It would be a shame if this lesson doesn't go any further than taxi drivers and customers. More Americans need to learn that "government protection" for any industry isn't all it's cracked up to be from both the business and customer side.

The Uber app on a mobile phone
Getty Images
The Uber app on a mobile phone

With so many young people using and preferring Uber, I'm starting to get optimistic that this new generation of Americans will get a real world education about the advantages of the free market to offset the socialist nonsense most of them "learn" in college.

Because the Uber story is just one example of how much the economy can grow and opportunities can multiply if the government would just stop "helping" the existing industry leaders protect their turf and supposedly protect their workers and customers.

Just look at what breaking up the telecom monopoly has done for that industry and its customers since 1984. Does anyone in their right mind think we'd have iPhones, Amazon, or most of the Internet today if we still were all dealing with just one phone company in America?

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How about health care, energy and education? Doesn't Uber prove that more choice and less government could work better in those industries too?

Of course it does.

So the next time you use Uber, take pride in knowing you haven't just chosen a more convenient option, you've just helped make a freer and better America.

Commentary by Jake Novak, supervising producer of "Street Signs." Follow him on Twitter @jakejakeny.