Like most millennials, I use ridesharing firms like Uber and Lyft. I do so because I perceive these firms are better than taxis in terms of pricing, service and accessibility. Equally important, as I’ve noted for Opportunity Lives, the ridesharing industry proves capitalism’s unique ability to bring employment and consumer satisfaction. Escalating liberal efforts to destroy the industry are disgraceful.
That said, Uber and Lyft are imperfect. Predicted wait times for cars are unreliable, Uber’s pricing “surges” often activate with little notice (sometimes just after a driver cancels a pickup), and customer service — both for drivers and for riders — is weak. Although representatives tend to respond quickly to rider emails, they apparently do not possess phone lines. And when pricing errors occur due to a driver’s inefficient route, the refunds are derisory. (I was once refunded 36 cents for a ride to the wrong destination!)
Similarly, drivers — particularly Uber drivers — complain that the companies take excessive commissions. These problems exist because, at present, the ridesharing industry is an oligopoly in which a few big players offer riders and drivers limited choices. They know they’re better than taxi companies and up until now, that’s all their success has required. The need to offer improved services, new perks and so forth is limited.
Fortunately, things will soon change. American capitalism is moving to the rescue!
First, consider the major investments that top technology companies like Apple and Google are putting into driverless cars. Perhaps five years from now, these new market entrants will push rider prices down.
But this isn’t just about the future. On Monday, General Motors announced it would invest $500 million in Lyft. It’s a big deal. After all, as the dominant market leader, Uber has long relied upon its greater brand recognition and capital attraction to dominate competitors in coverage area, responsiveness and affordability. But sensing the ability to challenge Uber’s market dominance, GM is putting big money into the fight. Recognizing that ridesharing is still a growth market, investors know there are many riders who still might be lured towards their firms and away from taxis and competitors. As competition grows, riders will reap the benefits. Prices will be pushed down, services will be improved, and loyalty perks — in the vein of frequent flyer programs — will arrive. The best drivers will also benefit as companies endeavor to center their brands on comparative quality.
Of course, this evolving competition won’t resolve every complaint. There will always be those, for example, who choose to accept surge-contracts and spend hundreds — sometimes thousands — of dollars on a ride, then whine about how unfairly they’ve been treated. They forget that contract law centers on balancing an offer to supply with demand.
Nevertheless, American capitalism is once again proving its unique worth. Uber faces a great battle. And whether it succeeds in retaining its market position or not, we the consumers are going to benefit.
Tom Rogan is a contributor for Opportunity Lives and writes for National Review. He is a panelist on The McLaughlin Group and a fellow at the Steamboat Institute. Follow him on Twitter @TomRtweets.