When I described Uber to my mother, she immediately ruled it out, saying she didn’t trust the background checks of the drivers. Both Uber and Lyft do full background checks on their drivers, at least as much as traditional taxi companies, while only Uber and Lyft give you the driver’s name, phone number, picture, and GPS tracking. This can make using an Uber arguably safer than a regular taxi.
Uber’s policies also appear to significantly improve the lifestyle for the drivers, making the profession safer and thus opening it up to more women. The Occupational Safety and Health Administration reported that cabbies were 60 times more likely to be killed on the job than other workers. Drivers often work alone, carry cash, and and travel through high-crime areas. Only about 2 percent of all U.S. taxi drivers are female.
Driving an UberX car, which is open to anyone who signs up and passed the background check, has turned out to be a much safer operation. Just like riders, drivers can see the name and rating of a potential pick-up. The rider already has a credit card on file, meaning the driver never needs to carry or handle cash. And the car is tracked completely through GPS. While this doesn’t make crime again driver or rider impossible, it significantly lowers the risk. Though Uber won’t release gender breakdowns for its drivers, casual estimates place the number around 15%.
What stands out about this discussion is how Uber has been incentive to create a superior product to traditional taxi cabs without the strong regulatory regime. The initial taxi monopoly regimes were created to encourage safety, reliability, and maintain certain standards. However, this has led to a large undeserved market, mostly from a lack of available drivers or rigid pricing regardless of demand. Uber, incentivized to create a superior product to taxis, has put technology to innovative use, making taxi transportation far more efficient for the drivers and riders. This is why bans on Uber, as Berlin recently did, have more to do with protecting entrenched businesses or simply ignorance of how the service works. Uber is likely also the reason demand for taxi medallions, once one of the best investments available, is now dropping.
For regulations, it’s important to recognize what the business already incentivizes. Companies can only cut costs to the point employees and customers are willing to partake in the transaction. If driving or riding an Uber became unsafe, both drivers and riders would exit to competitors. And since there is no longer an artificial limit on supply, competitors like Lyft can more easier enter the market, forcing all entrants to engage in higher levels of service. Legislation should look at what the base line of service their car sharing services offer and determine that to be what is needed for consumers to use the product and for the businesses to be able to make a profit.