Shedding A Tear For Humanity: The Uber Dilemma

Megan McArdle on her way to the airport. Will the servant problem never end?


“Forget the politicians. The politicians are put there to give you the idea you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations that've long since bought and paid for, the senate, the congress, the state houses, the city halls, they got the judges in their back pocket, and they own all the big media companies so they control just about all of the news and the information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else. But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They're not interested in that. That doesn't help them.”
― George Carlin


It is extremely galling to see professional pundits paid to propagandize their lies and misdirections. It is even more galling to see professional pundits paid to lie about their propagandizing. Now that the inevitable results of their previous actions have finally arrived the pundits are lying again, telling everyone that they were just trying to help but mistakes were made and now they know much better and are even more qualified to help people than before.

First, a shorter.

Megan McArdle: Uber might not be such a great deal for drivers and passengers after all.

Now a longer, because what McArdle does here is (predictably) very dishonest. McArdle just loved, loved, loved Uber. It would shaft all those greedy taxi drivers that took so much of McArdle's money when all a girl was trying to do was save money for more kitchen appliances by squeezing the lower class man who drove her inebriated self home. (One can only hope that she tips her bartender but no doubt she is plagued by greedy servers as well.)

Uber also represents Freedom!! to McArdle. What could be better than a bunch of wealthy investors finding a way to extract more money from the poor and putting that money in her pocket? Anyone who tries to take away her right to do whatever she wants is an enemy and McArdle wrote many articles in Uber's defense.

No doubt it is a complete and utter coincidence that the Koch network supported Uber's legal challenges to the present taxi system. McArdle probably didn't even know who paid for the lawyers she met at Uber rallies. Which is more likely, McArdle supported a Koch cause to keep the gigs flowing, or McArdle was too lazy, incurious, and unprofessional to look up the background of her interview subjects?

Some questions have no answer.

Don't forget that McArdle knew every objection anyone wrote about the effect of Uber on workers and responded to many of them. She simply explained them away.

Let's start with her past coverage of Uber, not in chronological order:

Why You Can't Get A Taxi: Uber provides plush taxis at the push of a button for lower prices by avoiding regulations, which destroy the taxi industry and create all the ills of getting a taxi ride.

McArdle's claims about Uber:
1. Getting a cab is faster and more efficient because it's based on math.
2. Cars are always well-maintained and available regardless of you race, ethnicity, or location.
3. Drivers are better off because they don't have to bribe dispatchers anymore.
4. Uber is set up to make drivers a lot of money.
5. Uber eliminates jumped fares.
6. Uber eliminates offensive fares, who can be banned.

Direct quote: "Uber is a great idea."

Who's Afraid of Uber: Uber isn't helping to create a gig economy; the media just thinks it is because they are afraid of being dependent on freelance work.

Uber Serves The Poor By Going Where Taxis Don't: I don't like Uber because it saves me money, I like it because it helps the poor. Uber eliminates the need for regulations, makes it easier for cabbies to get return fares, costs the poor less for rides, and is more efficient than taxis.

Employee Label Would End Uber As We Know It : If Uber has to follow regulations regarding safe working conditions and benefits it will go out of business and drivers will be put out of work.

Uber Makes Economists Sad : New York is regulating surge pricing, which makes economists sad because it will put drivers out of work and prevent riders from getting a taxi.

The Price Is Right, Or Uber Will Raise It : Uber is cutting driver's pay. This is risky but if anyone can pull it off, Uber can!

Gig Economy is Piecework, But This Isn't Dickens : If taxi rides are cheaper, more people will want taxis. If some workers are harmed that doesn't mean the labor market is harmed. [Note that this is contradicts her minimum wage argument: some workers lose jobs from a minimum wage increase therefore the labor market is harmed.] Piecework is trivial harm next to automation and outsourcing.



But the times, they are a-changin'. Now McArdle must acknowledge that our brave new economy isn't always perfect. First she acknowledges that adding in another middleman who takes a cut might not be the best thing for a driver barely getting by.

 Sure, an app might streamline things a bit, adding enough value to let businesses expand their reach or lower their prices a bit. But since the app itself has to take a cut in order to pay back those investors, there actually isn't much room to deliver massive savings.

McArdle ignored or explained away nearly every criticism of Uber when she was promoting it. Now she's pretending she's making a timely assessment of the company's progress when she's actually pretending to care about the poor drivers.

This explanation makes sense to me. But a niggling doubt remains at the back of my mind: Does even Uber live up to the hype of being "Uber for X"?

And here is the Big Lie. McArdle never has and never will approach an economic argument honestly. She ignores anything that might harm the success of her propaganda. She is not a journalist or analyst. She is a propagandist who is trying to preserve her value in a changing market.

I’ve been writing about Uber since close to its inception, and I’m a big fan of the service. Its original incarnation as a method of summoning black cars was revolutionary for those of us who live in neighborhoods without reliable taxi service or a clear and safe route from the subway at night. (This no longer describes my neighborhood, actually, since there’s been considerable residential development over the last few years. But at the time Uber launched, my nearest Metro stop was in the middle of a sea of office buildings that tended to be deserted after 7 p.m.)

Its original incantation existed solely in McArdle's imagination, fed favorable information by the Koch-supported legal team at the Institute for Justice. She said she "bumped into" him at an Uber rally.

As I made my way toward the door, I bumped into Robert McNamara, the attorney fighting against many taxi regulations, who was there as an interested observer. “I’m impressed by how professional this is,” he told me.

She did not say that he litigated cases against taxi regulation for the Institute. She is deeply, deeply corrupt. Or ignorant. Or both; I like to be inclusive.

 Robert’s work has resulted in court victories for property owners fighting eminent domain abuse, tour guides fighting unconstitutional restrictions on their speech, taxi drivers seeking the right to own their own business, and many others.  In addition, Robert directs the Institute’s transportation-related litigation nationwide and was co-counsel in Flynn v. Holder, IJ’s landmark challenge to the federal prohibition on compensating bone marrow donors.

McArdle goes on to say that Uber has done good work in destroying the "local taxi cartels" but maybe unloading all the expenses on the worker while taking a cut of his profits wasn't such a good deal for the driver.

But the more I talk to Uber drivers, and read the message boards, the more I wonder if we aren’t in a bit of a golden moment for Uber -- the moment while there’s still a lot of investment money to subsidize operations, and before drivers realize that wear and tear on their cars is actually an enormous hidden cost that needs to be accounted for in calculating their hourly earnings.

Note that McArdle doesn't actually do the math, which is probably wise under the circumstances. The CPER did, using figures from the IRS. But if you ignore numbers you can ignore facts.

I say this because I’ve started to hear drivers talk about people they know who dropped out because of the wear and tear on their cars -- something that I never heard a couple of years back, even though I often asked about it. (Yes, in the height of all journalistic clichés, I usually interview drivers.) It also shows up on bulletin boards like Glassdoor.com. The volume of complaints about wear and tear on the cars seems to be rising, often coupled with complaints about the fare and reimbursement cuts that Uber has pushed as it tried to break even.

McArdle never discussed Uber drivers' expenses. I found seven posts on Uber and re-read them twice. I might have missed a reference but I don't think I did. McArdle mentioned the cost of cleaning the car after drunk riders vomit but that is the only reference to expenses besides gas and time. This type of dishonesty is utterly typical of McArdle. All she has to do to preserve her ego and reputation and usefulness is to lie or shade the truth or simply omit it. Naturally she is corrupt.

She pushed "Uber is uber" over and over and over and didn't say one word about who was funding some of its most expensive anti-regulation activity: the Koches. She is so corrupt that she thinks her actions are natural. And now she wants to teach us how to help the poor.

The world is insane.

This is obviously far from scientific data, but it makes a certain amount of sense.

Hahaha. Try using data some time, Princess.

Most people are not accountants or small business owners, and it doesn’t necessarily occur to them that they need to calculate their hourly wage for Uber driving net of tires, oil changes and depreciation on their vehicle, as well as gasoline and any costs they incur for having the car cleaned after some barhopper vomits in it. That may have enabled Uber to sign up people who were willing to drive for a lower price than they would if they were fully factoring in all their expected costs.

I doubt that. But if it's true, McArdle did her best to encourage their continuing ignorance.

But that’s a strategy that doesn’t last. The reason that I have been asking Uber drivers about it for so long is that, well, like I said, I usually interview drivers about their jobs. And taxi drivers, longtime professionals, are acutely conscious of the cost of replacing their tires, their oil and their vehicle. Which they need to do a lot more frequently than normal commuters.

McArdle promised her readers a "sleek black sedan" that would be "well-maintained" unlike those nasty taxis, which can't afford to be nice because they have lower fares than Uber. Now we see that Uber drivers can't afford repairs either.

I’m not accusing Uber of bad faith here; I’m just saying that over the past few years, the company has probably benefited from a pricing anomaly in the market for drivers. (Not to mention a recession that kept a lot of potential drivers un- or underemployed.) As information about the cost of vehicle maintenance spreads, that pricing anomaly will go away. At which point, it seems quite likely to me that either the pool of drivers will shrink, or the fares will have to rise toward something closer to what we pay for taxis.

You know who could have helped eliminate asymmetrical information? The media, doing its job to prevent the market from losing equilibrium when the consumer has no idea what the producer is up to. But-and here's the weird thing-the media doesn't do its job because the producers own the media.

Oh well. Success and failure are both structural and not-structural so there's nothing we can do about that. Some silly people might think that pointing out in excruciating detail the propaganda that passes for journalism would be effective but those people are just not very bright.

That’s not the death knell for Uber, of course. It provided a valuable service even when it was just a virtual dispatch for black cars. UberX also adds real value to the market, although I think perhaps not quite as much value as passengers and drivers currently perceive. And they’ve continued to innovate, with ride-pooling, and things like takeout delivery services. I would be very surprised if the company were not around, and quite profitable, in 10 years.

But I wouldn’t be surprised at all to find that I’m not taking quite so many Ubers, as the prices rise to bring passenger demand into equilibrium with a willing and informed supply of drivers. The taxi industry will stay disrupted. But the resulting transformation may not exactly be a revolution.

And what's a little creative destruction between friends? Or between industry and its workers?