Adam Smith Institute

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In Defence of Uber (again)

This morning’s Tube Strike brought chaos to the Capital, and people are (understandably) unhappy. A colleague at work took over two hours for a commute that usually takes just 20 minutes, and a friend ended up walking all the way from Paddington to Canary Wharf in the rain. Looking out the window as I write, the traffic hasn’t abated much and London has brought a new definition to the word sluggish.

In response, mobile taxi app Uber, renowned for its efficient and cheap service, has hiked its prices for a ride. Over four times the normal rate in fact. People flocked to social media to vent their despair, describing Uber’s behaviour as both “disgusting” and “disgraceful”.

But what such cross commuters fail to recognise is that Uber is actually doing us a favour. By using the surge pricing model that is responsible for the high fares, Uber are able to send an economic message to drivers, to lure them into London so that there is no shortage. Further, the higher prices ensure that the service isn’t completely inundated with requests to drivers, so that some drivers are likely to be available to those who are willing to pay.

This may not sound comforting though. One may well think that in hiking its fares, Uber is simply giving speed and efficiency to the wealthy, with no regard for the poor, who might be condemned to trudge the pavements of London. This may seem so, but what it also means is that the service is available for those who have an emergency on their hands. What’s £45 if it means you can make your job interview? What does £50 matter when you have a crucially important business meeting to get to, or have to rush your dog to the vet? Those who deem their punctuality sufficiently important (and who see Uber as sufficiently speedy) are able to get their ride. This would not be the case if such apparently “disgusting” and “disgraceful” behaviours were banned.

So rather than jab fingers at Uber, as businessman Roger Charteris did, tweeting “@Uber you are cashing in on people’s misery”, we should stand by them and their decision to raise prices, and defend their acting in their self-interest.