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.