Days of Change

Happy Uber Year | January 1, 2015

For those of you who live in a state like New York, imagine if a gas station sold gas for $2 per gallon. In most other states, you will need to decrease that number by 50 cents to play along. At about a 70 cent differential right now, any car in a 20 mile radius would save money by going there. Unfortunately, this lone gas station would probably run out frequently, let alone be subject to arson from other gas stations and fuel suppliers. That’s why they used to say a few years ago that you can have all the $3 gas you want, but you can’t have all the $2 gas you want.

This situation wouldn’t occur, of course, because price-fixing is in. Citgo, which is supplied and partially run by the Venezuelan government, still has to charge market rates for gas. Even the gas stations in my area run by Native Americans, who do not have to pay the state fuel tax, sell their gas at market rates. It’s not even the effect of a shady arrangement between stations, but something the government does to avoid price wars and keep the tax revenue as high as possible.

This is why the ride-sharing company Uber is both a model of capitalism and the enemy of government. The idea is simple. If you have a vehicle and are willing to drive someone someplace for a fee, you can become a ride provider. If you want to get somewhere and a traditional cab is unavailable or undesirable, you can become a customer. This used to happen before Uber. I knew people who droveĀ others to the airport for a flat rate.

Uber is a sort of social media ride dispatcher. The customer uses the app to put in a destination, find a rate to pay and select a driver. Drivers and passengers are both rated and disputes are settled by Uber. Uber also sets the rates, which can go up or down with demand. Last night saw a Twitter attack on Uber when they raised fares to an 800% surge price right after midnight on New Year’s Eve. The principle was simple, however. Drivers may not want to go out in the middle of the night into Times Square to pick up partiers when they may have a real job. You can have all the $40 one-mile rides you want on New Year’s, but you can’t have any $5 ones.

Capitalism is generally accepted in this country as a good idea. Still, consumers want low costs and not to feel ripped off. Politicians want a system that is successful enough where they can extract tax revenue, but not so free that they might lose their cut. Services like Uber mostly exist in large cities, but the liberal politics there often try to shut them down. At some point, the crowd sourced industry will either have to fight City Hall or fold. It won’t be easy to stop, however. Uber means everywhere.


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1 Comment

  1. Your post reinforces my observation that those decrying capitalism are not the noble humanitarians they pose as, but jealous nits.

    Comment by Mary — January 2, 2015 @ 12:40 am

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