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From The Executive Director: Bill De Blasio’s Uber Gamble Won’t Pay Off Because It Doesn’t Make Sense

Tomorrow, New York’s City Council will take up Mayor Bill De Blasio’s suggestion to cap the number of Ubers that can operate in New York City for one year to, in his words, study the effects of Uber on traffic congestion.  There are three ways to read this stunt, each more terrifying than the previous.

The first interpretation, which is also the most encouraging for New York’s future, is the situation as viewed through the eyes of a cynic.  In this interpretation, Bill De Blasio has been captured by the special interests of wealthy taxi medallion investors who donated nearly a million dollars to his election campaign.

In this case, New Yorkers have nothing more than a corrupt politician, whose allegiances can be swayed just as easily by the threat of lost votes as they can by the threat of withdrawn campaign contributions.  While it represents a problem, it is an easily surmountable one through the collective outcry from consumers who want something better than New York Yellow Cabs have offered.

The second interpretation is that the mayor believes the labor movement will come out in massive support of their taxi-driving brothers in arms, helping him politically.  This is a little more disconcerting as it shows that the mayor is willing to play divisive politics to pit strong constituencies against weak ones to the detriment of consumers.

In “Can Bill De Blasio Turn Uber Into The NRA?” author Ben Smith of Buzzfeed details how De Blasio believes that Uber is not about congestion or taxis, but the ideology of anti-labor technology threatening everything from wages to civil society.

De Blasio adviser Phil Walzak told me Friday that the mayor plans to make any fight with Uber about much more than traffic in Manhattan. “Uber’s track record is worth a conversation and an examination,” he said, citing in particular “whether this company has the workplace and consumer protections in place.” He promised an “honest conversation” — which everyone in politics knows means throwing the kitchen sink.

If this is what is actually going on, I believe that Bill De Blasio has made, if you’ll excuse the pun, a mistake of Uber proportions.  Members of unions are known for their ability to exhibit solidarity with their brethren and can be counted on to buy American cars, shop at unionized stores, and purchase union-made products more than the average consumers.  De Blasio assumes that taxis and Ubers are nearly the same product, so believes that union members will not mind paying slightly more for the one that is roughly the same quality as the other.

There are two major problems with this assumption.  First, as anyone who has lived in New York, DC, or the SF Bay are will tell you (I’ve done all three), Uber is a revolution in transportation, not an evolution of the taxi.  Asking union workers to give up Uber in favor of taxis is very different from imploring them to by Chryslers over Toyotas.  Secondly, the taxis are in no way historically or presently deeply tied to Big Labor.  With their first union formed in 1998, only a third of New York cabbies had unionized as of 2011.  The Sandhog in Bayside might just want to be able to hail a car with his phone more than he cares about the entrenched plight of a maybe-unionized taxi driver.

Finally, there is a third and absolutely terrifying possibility about De Blasio’s agenda as it relates to Uber: that he actually believes what he is saying.  To start, he decries that Uber will lead to an “addition of over 25,000 cars to our streets over the next year.

The obvious thing that De Blasio misses with this point is that cars used as Ubers are utilized at a much higher rate than cars that are not.  Get rid of the cars that sit in the driveway at night and sit in the corporate parking garage in the morning and replace them with cars that drive around 8-12 hours a day and you will reduce, not increase congestion.  Encourage carpooling, as Uber has started to do, and you’ll make even greater strides as you maximize the utilization of a moving vehicle’s interior space.

The following are Bill De Blasio’s self-declared “three principles that drive us” and are drawn directly from an op-ed he published in this Saturday’s NY Daily News.

  • Protect workers. This industry is evolving so rapidly, with the number of vehicles skyrocketing even as the pool of New Yorkers who can afford to pay $10 or $20 to take car trip is far more limited.
  • Except: The mayor is admitting that Uber’s affordability represents a threat to taxi-drivers, implying that riders (ie: voters, consumers) are getting at least as good a deal as they do with taxis.  This leads to two scenarios, one in which the service is better, and one in which it is exactly the same.  If the service is better, the mayor is publicly and knowingly promoting an inferior service to consumers in order to protect jobs.  This has many names, but it’s often referred to as a “make work” program, and it is not particularly beneficial to consumers.  If the services are exactly the same in quality, the mayor is arguing that the number of taxis and the current wait time for taxis represents a perfect amount of licenses and a perfect wait time for consumers.  Unfortunately, this is exactly the amount of humility we expect from a man that has no regrets over historically shutting down New York City because of 3 inches of snow.
  • Protect riders. Riders deserve honest rates and security against surge-pricing schemes that look an awful lot like price-gouging. And Uber shouldn’t get immunity if one of its drivers attacks or injures a customer.
  • Except: Uber exists as an ancillary alternative to services with standard pricing.  The taxi, subway, and bus hold fares constant and vary the ability to utilize their service based on congestion.  Uber holds the wait to get an Uber constant and varies fares.  Each serves their market, as some people value their time as less valuable than others.  As a man who is chronically late, it’s no surprise that Bill De Blasio fails to place value on the ability for his constituents be where they need to be, when they need to be there.
  • Improve accessibility. We need to end discrimination in our transportation system. Because of hard work, half of all yellow taxis will become wheelchair accessible by 2020.
  • Except: Disabled people have a really tough time getting accessible transportation to come to them, which is why Uber created a service that tied in Wheelchair-Accessible-Vehicles with those who need them through UberWAV.

In the end, Uber and services like it do a great service to the consumers they serve.  By meeting unused capital stock with consumer demand, they reduce inefficiency in the marketplace, create transparent pricing for consumers, and in the end create wealth.  Those fighting the sharing economy the strongest are those who benefit most from an inefficient, opaque, and corrupt world.

Sincerely,

Joe Colangelo

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