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Perhaps Uber is not that revolutionary, after all


Uber has certainly disrupted the taxi industry. The question is for how long, wonders Bloomberg News columnist Megan McArdle. For one thing, its drivers are putting on longer hours to make ends meet. And unlike their professional peers, the cab drivers, only now they are factoring in the wear and tear of their cars. There are probably lots of hidden costs built into the service. In addition to it, Uber has been pushing for a bigger fare and reimbursement cuts, as it tries to break even. This, McArdle argues, is far from spelling the death for Uber. What was revolutionary about it was the opening it found for a new market. It built a niche into a business—the yellow taxis—protected by regulation, and that thrived on a virtual monopoly. In other words, it had unrivalled grip on the transfer of wealth from customers and drivers. Yet it’s not about numbers alone. The sharing economy is still in its infancy. There is much to be learned. And one thing is the realization that regulation exists for a reason. While the statistical importance is arguable, there have been a number of incidents tied to Uber. In the end, you are hopping into a car driven by a stranger. Much the same can be said about the taxi drivers, except that they pass tests administered by public agencies and meet certain criteria to ply the streets. The riders receive a number of protections. That’s probably worth the extra money to be paid. Most of the time, there is nothing wrong with getting a short ride with a stranger. What would become of hitchhiking, otherwise? And in underserved cities, like Moscow and other cities of the former Soviet Union used to be, it was a local custom to hail any car in the street and pay a reasonable fare to the kind driver that had got out of his way to serve you. This writer has often relied on these unknowing precursors of Uber in the Russian capital; Alma Ata; Yerevan; and Tbilisi. But also in China: in Beijing, Xian, and Urumchi; and in Turkey, from Artvin to Mush; and most recently, in Sebastopol, in the Crimea. So, it is not that revolutionary after all. A combination of business acumen and the resources offered by smartphones and apps have made Uber possible. That’s really all.


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