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Last modified: 07 February 2017

Defending Uber

I haven’t owned a car for years. I mostly walk, cycle, or take the bus. But I use Uber sometimes and I always like it. It saves me looking for a local taxi number, the service is reliable, and I avoid having to describe where I am when I’m in a strange city.

There’s a lot of useful innovation in the Uber app, both for passengers and for drivers.

But I’ve read quite a lot articles by people who don’t like Uber at all, and I’ve been trying to figure out if I disagree with them or not. It’s been quite hard, I can follow the arguments they make but none of them feel very relevant to my life or the data in Leeds and Birmingham.

The case against Uber

I’ve heard three big arguments.

1. Uber offers especially poor conditions to their drivers.

2. Uber exploits loopholes in licensing to undercut licensed taxis.

3. Uber’s huge operating loss makes public transport unviable in the short-term even though it is more efficient in the medium-term.

The third point is the most interesting but I’ll get the first two out of the way quickly and come back to it.

Uber operates in a fair and highly-competitive marketplace.

Leeds City Council releases open data on the number of licensed taxis on Data Mill North. Uber is the second largest firm in the city but it has just a 15% market share. It is usually a more expensive option than its private hire competitors and its market share seems almost constant; it’s risen by one percentage point in the past 16 months.

As long as drivers and user can choose, and especially since a UK court ruled that Uber drivers are employees, this seems fine.

I don’t see any evidence that Uber are using loopholes to undercut competitors either. In Leeds they and their drivers are licensed in the same way as all other private hire drivers and licensing fees are similar (between £200 and £400 per year) for private hire and Hackney Carriage drivers. So this seems like a fair playing field.

Now onto that third point. It’s basically an argument against dumping and I think there’s a lot to it. There’s a big argument that in the middle of the 20th Century cars displaced much more efficient forms of urban transport due to a similar kind of short-term dumping. Is Uber doing the same? I don’t think it is where I live.

Taxis are a luxury in London, but a lifeline in Leeds.

I’m going to rant for a couple of paragraphs now. It’s unavoidable I’m afraid.

For decades people like me we have asked for the right to regulate bus services in places like Leeds and Birmingham. We think that our cities, if given the freedom to, could deliver innovations like the Oyster card and the excellent services and low fares enjoyed in London. But it remains illegal under a UK law from which the capital is exempt.

We have also argued constantly for a level of investment in public transport comparable to London, and never received it. Now in Leeds, 30 years after the first plans to build a tram network, the city has the money to build a trolleybus system and is barred from doing so by the UK government. Leeds is the largest city in Europe with no public transport system. The situation is farcical.

And so while I can imagine the logic — if not the practicality — behind fears that Uber might undercut public transport in a city like London, I cannot share those fears in Leeds and Birmingham. Since there is almost no public transport to displace, it cannot be displacing it.

But there’s another argument that clinches my support for Uber.

The best data we have on the demography of taxi use comes from the 2011 census, in the methods of travel to work section. This shows that in London taxis are a luxury used by the rich. But in Leeds they are a connection to employment for the poor. For many, taxis are the only real competition that exists to restrain private bus companies’ price rises. Most people in Leeds that for many trips, especially with more than one person, a taxi is just as cheap and much more convenient than the bus.

And so, while good public transport remains an option that is unavailable to England’s large cities, I will continue to support Uber. I’m not sure why a multinational chooses to lose money helping poor people in Leeds get to work, but I’m glad that it does.

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