In Defence of Uber

Taxi service Uber is coming under increasing pressure and resistance from politicians, taxi companies and the media. Critics complain that the company is ‘unsafe’, ‘unfair’ and ‘unregulated’. However, the most likely reason why there is resistance to Uber, is because Uber is providing a better service than the cab companies, and at lower prices. The reason why Uber came to be in the first place was because there was a demand for something new. For too long, taxi companies were too expensive and provided a mediocre service as a consequence of the lack of competition and mountains of regulation. When Uber came along, it was fresh and ideal for the modern world. It had inventive and resourceful features, such as the use of the smartphones GPS system, along with extremely short waiting times, that caught the imagination of the consumer, allowing the company to gain worldwide success. With the push of a button, an Uber taxi can arrive at your location within a couple of minutes. In response to the criticisms leveled at Uber, founder Travis Kalanick explained: “When new technology comes into an industry that has pretty much been the same for fifty or sixty years, you are going to come up against resistance, usually from incumbents that are in that industry.”

Public figures such as Hilary Clinton and Russell Brand, have come out in opposition to Uber. What is most confusing about the critics on the left, is that we often hear them complaining about the problems with monopolies; yet at the same time, they will advocate the restriction of new companies from entering the market. Government interventions in the form of regulations and licencing have the effect of increasing prices and barriers to entry, which is why cab companies have been able to get away with high prices and poor service for so long.

In addition, the criticism that Uber is unregulated is true in the case of government regulations, however it is untrue to claim that Uber doesn’t have any regulations at all. The regulation comes from the market. If the service is good and customers are satisfied then the company will prevail. On the other hand, if it does not, Uber will lose business. That is what the free market is all about. The success or failure of a company depends upon the consumer.

I do have sympathy for the taxi companies that are losing out, and the drivers who are losing their jobs however. There is some truth in the claim that competition is ‘unfair’, but people are looking at it the wrong way. In order for these cab companies to survive, the playing field ought to be leveled. However it would be a mistake to do so by increasing regulations on Uber and essentially outlawing competition. On the contrary government regulations need to be relaxed in order for the cabs to have a fighting chance. With cab companies free from the excessive regulations of government, they will be free to legitimately compete with Uber in the free market. When that happens it is we, the consumer that will benefit the most.


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