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Uber Alles
Seattle Surrenders to the Uber Revolution

In March Seattle passed an ordinance mandating that Uber (and other similar companies) could only have 150 active drivers on the street at a time. A clear case of rent seeking on behalf of traditional cabbies, this restricted the supply of Uber cars below below what the market demanded.

Fortunately for Uber patrons, the city has now reversed itself and lifted the cap entirely. Not everyone is happy, as Geek Wire reports:

GreenCab Taxi General Manager Chris Van Dyk, who’s listed as a plaintiff in the referendum lawsuit against the City, said in advance of the announcement that there would be a major problem with ending the cap on the TNCs.

“The experience in Seattle in years past, in San Francisco and in Ireland now, is that if you have unlimited entry, if you have no limit on the number of taxi and for-hire vehicles, operators simply cannot make a living wage, and the industry goes to hell in a handbasket, and in a relatively short time,” Van Dyk told GeekWire. “The economics of the industry are counter-intuitive, because of the low threshold of entry. Apps do not change this.”

Van Dyk may have trouble selling some of these arguments to Uber drivers, some of whom reportedly make as much as $90,000 per year. Meanwhile consumers love the service, and this was presumably a big part of the reason Seattle caved on its original policy. The service also contributes to a greener future, and even cabbies who don’t work for Uber will be able to share in the benefits—that is, if legislatures and municipal governments get out of the way.

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  • Loader2000

    I sure hope that cabbies make at least a little more. I have a feeling that $90,000 is an exaggeration, or, like with the pyramid sales scheme, something some guy did once, but not reproducible. After paying their own benefits, if Uber drivers make just a little bit more than their counter-parts, then I am a huge fan. However, if company execs. at Uber drive the fares down to the point where Uber drivers are making no more than traditional cab drivers, I will be disappointed.

    • Richard T

      That Van Dyk guy understands economics better than I’d expect. If anyone who can drive a car and be polite to a fare is now a potential cabbie, that’s a supply that most likely exceeds the demand, so the price will have to go down unless Uber can arrange a nasty anti-competitive deal of their own.

      A quick search finds that the least specialized truck drivers have incomes in the mid-30s. Any reason why Uber cabbies are likely to command more than this?

      • Andrew Allison

        Is there any reason other than barriers to entry of competition that any cabbies should command more than this? That medallions in NYC sell for over $1 million? The cab business appears to have all the attributes of a cartel.

  • grinlap

    I’m sure there are not too many Uber drivers making $90K but so what. For some it might be a second job to supplement their “real job”. If it’s their only job and they were unemployed before then they’re better off and so am I because I’m not paying them to be idle.

    The thing I never hear mentioned is what happens when one of the Uber drivers has an accident and injures a passenger? No ordinary auto insurance policy will cover carrying passengers for hire. Do the drivers carry extra insurance? Does the big Uber in the sky carry some sort of umbrella coverage that covers all their drivers?

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