Sacramento
A recent attack piece on ride-sharing giants Uber and Lyft by New York Times editorial-board member Greg Bensinger expresses a Seinfeld quality that is reminiscent of that sitcom’s hilarious mock holiday known as Festivus. During the December 23 event — an alternative to the commercialization of Christmas — adherents stand around the aluminum Festivus pole and air their grievances.
“I got a lot of problems with you people!” Frank Costanza would yell. “And now you’re gonna hear about it!” Sure enough, Times readers got an earful of grievances from Bensinger, who has a lot of problems with Uber, Lyft, and the relatively new app-based platforms that connect ride seekers with drivers. His column was as silly as that made-up holiday.
The companies “promised ubiquitous self-driving cars as soon as this year,” and yet autonomous vehicles still are in their infancy. “They promised an end to private car ownership,” and yet most people still own cars. “They promised consistently affordable rides.… They promised profitable business models. They promised a surfeit of well-paying jobs. Heck, they even promised flying cars,” he complained.
As someone who often uses Uber and Lyft, I’d argue that they do offer affordable rides — at least in comparison to a similar taxi fare. And it’s much more pleasant. The business models aren’t yet profitable, but it’s hard to square those concerns with Bensinger’s assertion that drivers aren’t earning a living wage. It’s only really the investors’ problem if a new business model hasn’t quite turned a profit.
Furthermore, if the companies followed their critics’ advice and turned to a salary-with-benefits pay model, similar to what California legislators have tried to require with Assembly Bill 5, then ride prices would go up and profitability would go down. But why expect even a basic grasp of market economics from a Times columnist?
Bensinger is correct that we’ve yet to see flying cars, but he knows that’s not something that would materialize quite yet. As the Times’ own reporting noted last year, “Air taxis, like autonomous cars, are unlikely to make a significant impact for several years, and their yearly development costs run into the tens of millions, if not hundreds of millions.”
Like all technological advancements, the boldest promises take time to achieve. Bensinger is annoyed that Uber sold its autonomous vehicle division — without explaining that government regulators and fear-mongers have done their part to dampen that business. He’s also upset that “vehicle sales are on the rise again this year,” as if these companies have the magical ability to change consumer preferences.
The sensible argument is that over time drivers — especially those who live in crowded big cities — may purchase fewer new cars as they rely more heavily on these easy-to-use ride applications. My elderly mom gave up her car when she realized how easy it is to get a ride via Uber, but no one expects such choices to immediately reduce national car-sale numbers (and then these folks would complain that it’s hurting union auto workers).
Bensinger does admit that ride-share companies “offer a useful service, including food delivery to the homebound, an alternative to drunken driving and access to transportation in underserved areas,” as if that’s some minor aside. But his basic critique lacks consistency — and amounts to a bunch of ill-formed grievances one expects from those who are hostile to entrepreneurship and innovation.
It’s not as if the Times has always lived up to its own grandiose promises. When Adolph Ochs became publisher in 1896, he promised “to give the news impartially, without fear or favor, regardless of any party, sect or interest involved” and to make the Times “a forum for the consideration of all questions of public importance, and to that end to invite intelligent discussion from all shades of opinion.”
Uber launched its service in San Francisco in 2010, and in the ensuing decade has shaken up the urban-transportation industry. The tightly regulated taxicab industry was miserable, from a consumer standpoint, given its high prices, grimy vehicles and lack of technological improvement. Until Uber and Lyft became ubiquitous, taxis often didn’t take credit cards (or used ancient card readers that turned the paying for the ride into a slow process).
I can’t tell you how many times I waited endlessly for a cab in one of San Francisco’s outer neighborhoods, repeatedly dialing the 800-number to get someone to pick me up — or stood there in the rain with other bedraggled folk desperately trying to flag a ride. Despite their high level of regulation, taxicabs aren’t exemplars of safety.
A 2013 San Diego study, called “Driven to Despair,” found that “San Diego taxi drivers earn a median of less than $5 an hour. They must drive for more than 70 hours a week to earn what a minimum-wage worker makes in 40 hours.… The current system encourages taxi drivers to drive when tired or sick, and allows lax vehicle maintenance, putting public health and safety at risk.”
Under the old taxicab model, cities allow a limited number of permits. That limitation drives up the price of “medallions,” which are sold in some cities for more than $1 million. Cabbies are stuck working off the owner’s permit cost and had little opportunity to own their own cab. The Times published a 2019 article about how “a spate of suicides by taxi drivers in New York City has highlighted in brutal terms the overwhelming debt and financial plight of medallion owners.”
“Officials have blamed the crisis on competition from ride-hailing companies such as Uber and Lyft,” it noted, but its investigation found that “much of the devastation can be traced to a handful of powerful industry leaders who steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst.… [T]hey channeled thousands of drivers into reckless loans and extracted hundreds of millions of dollars before the market collapsed.”
Bensinger is right that Uber and Lyft have created neither Nirvana nor flying cars, but he ought to read his own news pages — and realize that they’ve improved the lives of consumers and drivers alike. What more can one ask of a private company? It’s even better than a Festivus Miracle.
Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.
