If you listen to Lyft, Sidecar, and Uber, the message is that they are a wonderful development for everyone wants to move from Point A to Point B within all our major cities. Yes, these new services are competition with the existing taxi services, but our great nation has always accepted that competition is inevitably good for the economy and the best for consumers. In a free market economy, competition brings down prices while guaranteeing the highest possible level of efficiency for the consumer. What’s not to like? Well, here’s a list of everything wrong with the idea:
It increases the level of traffic on the road
All our cities have regulations in place to limit the number of taxis on the road. Some people have claimed this is unfair protectionism, that it keeps the number of taxis artificially low and so justifies higher prices. Except the point of these regulations is to limit the amount of pollution. The result of all these new ridesharing vehicles coming on to the roads is that the number of empty vehicles looking for rides has increased dramatically. The result is a significant increase in the level of pollution without actually benefitting the people who must breathe the air.
Too many people are chasing too little traffic
The ridesharing companies deliberately encourage the maximum possible number of their members out on to the roads. They claim everyone who puts their wheels out on the roads will earn big revenue. But that’s not the case. All the cars are out there waiting for people to call them through the app. During this time, they pay for gas. When someone finally pings them, the rate they are allowed to charge does not cover the cost of waiting to supply the ride. So the ridesharing companies do not bear the cost of providing a high number of vehicles on the road. They just want short waiting times to attract users.
Some have claimed the efficiency of the new service discourages people from buying new vehicles. By getting more people into shared vehicles, the total number of vehicles in private ownership is reduced. Unfortunately, there’s no evidence that people are disposing of their older cars. The evidence is that people are buying cars so they can participate in the ridesharing schemes. But unlike taxi companies which must buy vehicles with low emissions, there’s no limit on the emissions from ridesharing vehicles.
If prices stay low, public transport may be affected
The longer ridersharing offers low prices, the more people may be encouraged away from buses and trains, and on to already congested roads. Worse, those who might have used their bicycle or considered walking, may be persuaded to spend their money on ridesharing.
Putting all this together
There has already been a minor war with the ridesharing companies booking each other’s services and then cancelling the rides. These companies are bullies. They ignore the law, they promise drivers unrealistically high earning capacity, and then try to steal each other’s business. If they succeed in driving the taxi businesses into bankruptcy, who’s to say the consumers will benefit? The reality is that the consumer will be ripped off by ridesharing companies which then have a monopoly.