The IGM forum asks its elite economists to react to the assertion that,
Letting car services such as Uber or Lyft compete with taxi firms on equal footing regarding genuine safety and insurance requirements, but without restrictions on prices or routes, raises consumer welfare.
Of those who respond, 2/3 “strongly agree” and the remainder “agree.”
Let me suggest the next poll question: “Letting unlicensed medical providers compete with doctors and other licensed practitioners on equal footing regarding genuine safety requirements, but without restrictions on prices or services, raises consumer welfare.”
Or, more puckishly: “Letting unaccredited professors compete with Ph.D’s on equal footing using tests devised and graded by the same third party, but without restrictions on prices or services, raises consumer welfare.”
I wanted to title this post “economists heart markets,” but I fear that is not always true.
Again, I schedule posts in advance, so others have already mentioned this poll, but more favorably.
Taxi driver is one of the jobs protected from technology substitution or foreign competition. It’s a good entry level job for immigrants who aren’t used to sedentary jobs (Ethiopians seem to like the job). Using the internet to destroy another decent paying job seems like a case of the economists’ autistic tendencies. We might be entering a world in which we need to find more barriers to entry, not fewer. The alternative is all the wealth sliding into the pockets of the tech monopolists. It often seems like the technotopian rhetoric is really aimed at destroying the whole economy of jobs and employers (notice how every CEO describes his corporate culture as “entrepreneurial”?). I don’t mind paying a taxi driver a decent wage. If some part-timers are forced to get a real job (if there are any left), that’s OK.
I appreciate that you’re insulting economists, but am disappointed that you do so with the autistic characterization.
This rant only makes sense if you ignore the fact that Lyft and Uber also hire drivers. Once you realize that, everything else is just rehashing old buzzwords.
Uber in Chicago?
I was a gypsy cab driver in the Bronx in the 1970s. We had livery plates – making it legal to pick up by dispatch. Our insurance was twice that of medallion cabs (reflecting that our driving skills were twice as good?). We could not legally pick up on the street by hail – technically — but the mayor instructed the police not to ticket us for that because the yellow cabs would not service the areas we served.
Little did we realize we were being ripped off – we and the limo companies and the taxi drivers! We never guessed we could just use any central dispatch station (VHF radios then – before cell phones) and simply “share rides” with anyone with any car! Holy mackerel!
I think it’s time for taxi drivers in Chicago to begin putting in some time – perhaps during hours the city won’t let them work – “sharing rides” in their own cars – especially on their days off which might become Friday and Saturday nights. Just experiment a little at first — gradually they could shift from all taxis to no taxis.
Something for new immigrants to ponder seriously.
Legal aficionados may catch some resemblance between Uber’s “ride sharing” self-description and recently deceased Aereo’s claim it was just leasing antennas, not purveying copyrighted material without paying royalties. But legalities may never be able to intrude as long as yuppies like “ride sharing” (and Chicago’s mayor’s brother Ari Emanuel, is a major investor in Uber?). It is a good thing “ride sharing” did not start out on Chicago’s poorer West side or South side neighborhoods or it would have been squished in the first week – literally.
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Uber an opportunity for drivers? I recently emailed to the Chicago City Council the inflation adjusted numbers of what I took to be the hard to believe downhill path of the Chicago taxi meter over 30+ years (as US per capita income grew 50%): 1981, $.90 a mile ($2.35 in 2014 dollars) — 1990, $1.20 ($2.18) — 1997 ($2.07) — today $1.80 a mile.
Then I checked out this almost impossible to believe Uber story:
http://inthesetimes.com/working/entry/17201/uber_s_business_model_screwing_its_workers
In May 2013, Uber charged customers a fare of $2.75 per mile … But over the last year, the company has faced stiff competition from its arch-rival, Lyft. To raise demand and push Lyft out of the LA market, Uber has cut UberX fares nearly in half: to $1.10 per mile …
The medical professionals one is self-contradictory because medical licensing is about safety. Taxi safety can be enforced without medallions but it’s hard to see how the state can tell who’s a good doctor without some kind of licensing procedure.
“Letting unaccredited professors compete with Ph.D’s on equal footing using tests devised and graded by the same third party, but without restrictions on prices or services, raises consumer welfare.”
Yes, yes, Jesus H Christ, yes. Having a PhD doesn’t necessarily mean that one can teach. Universities should start hiring MA’s again to teach undergrads so that they get professionals focused on teaching instead of research. Make the BA more like high school because the students are more big high school students than proto-PhD candidates.
“Letting unlicensed medical providers compete with doctors and other licensed practitioners on equal footing regarding genuine safety requirements, but without restrictions on prices or services, raises consumer welfare.”
Good idea. If the results are different, it might demonstrate that economists apply something like a cost benefit analyst to regulation and ideally advance the discussion of why and how different professional activities ought to be regulated.
You might have asked them whether “busting unions will increase consumer welfare.”
After all, unions by definition extract higher wager by strategic restriction of supply, which is necessarily at the expense of consumers.
And heavily-regulated licensed guilds are like unions.
It might have been rephrased, “By busting the existing arrangement of a strategic-restriction-of-supply, letting a mostly unregulated industry inevitably crush and replace a price highly regulated industry will increase consumer welfare.”
Or, the best way to bust any union is free trade.
@unaccredited economists: Well, aren’t we already here? Universities are free to hire people without PhDs to teach their courses. Many do. The trend is toward more and more poorly paid lecturers, and relatively fewer tenured or tenure track professors. Many lecturers don’t have PhDs.