The Prodigal Ride-Sharing Son Has Returned

Slaughter the fatted taxi cab, Uber and Lyft are back in the Countdown City. But why did they have to leave in the first place?

By Alison Miller, University of Texas at Austin

On October 13, 2015, residents of the Countdown City rejoiced at the announcement that after extensive negotiations, Uber and the City of San Antonio had finally reached an agreement that would allow the popular ride-sharing company to resume service.

Uber stalked out of San Antonio in April of this year like an angry girlfriend who’d had to tell her boyfriend to do the dishes one too many times. Nor was their exit unforewarned – Uber had been vocal about their intention to leave the San Antonio if the City Council didn’t repeal the restrictive ordinances that went into effect on March 1 of 2015. In the six months and change between Uber’s dramatic exit and its reconciliation with City Council, Uber’s online petition to restore service garnered over 14,000 signatures.

Aside from taking issue with the amount of money that the city asked of the company, Uber’s primary beef with the aforementioned ordinances was with the mandatory fingerprinting, background checks and random drug tests to which Uber drivers would have been required to submit. Even after caving to what one can only assume was a veritable public uproar and agreeing to negotiate more favorable terms with Uber, the City Council stubbornly refused to give up entirely on its strident security measures.

Under the new contract, Uber drivers may voluntarily undergo fingerprinting and background checks in exchange for an indicator on their driver profile that lets prospective riders know that they have done so. Whether riders will actually show a preference for background-checked drivers over non-background-checked drivers remains to be seen; nevertheless, it’s a small victory for the San Antonio City Council.

In ensuring that background checks remain a visible part of the Ubering process in San Antonio, the City has made clear its implicit caveat: ride at your own risk.

It’s true that the idea of getting into a car with a complete stranger (who is registered with a private organization rather than with the state) is enough to make anyone a little squeamish – especially if you’re a woman and you happen to be travelling alone.

One website has taken on the task of listing the incidents of sexual assault, harassment and kidnapping by Uber and Lyft drivers. At a glance, their reports show that between 2 and 6 incidents have occurred every month in 2015 – not a very high statistic to begin with, but when you account for the fact that their incidents include both Uber and Lyft drivers, and that they are drawing from worldwide pool, the number seems much more bearable.

Since its founding in 2009, Uber has gained rapid popularity for several reasons. First, their rates are noticeably lower than those of most taxi companies. Moreover, Uber drivers on the whole are a nicer bunch than taxi drivers. Speaking entirely from personal experience, I can attest that Uber drivers I’ve encountered tend to be a lot friendlier and a lot less likely to be floating in their own private cloud of cigarette smoke than their taxi-steering counterparts.

Finally, Uber drivers escape the social stigma to which taxi drivers are exposed. This stigma is similar to that which society imposes on people who work in the service industry: it’s one thing to be waiting tables as a college student hoping to make some extra money – good on you, kid! But career servers or people who already possess college degrees and are still waiting tables tend to be viewed as inadequate or unmotivated slackers despite the fact that many of them simply make more money waiting tables than they would in a corporate position in their field.

The majority of Uber drivers do so as a means of supplementing their income – it’s a perfect on-the-side gig for anyone who works from home or has a similarly flexible schedule and wants to spend some time on the move, meeting new people. Conversely, for most taxi drivers, their taxis are their livelihoods, meaning that they tend to be a little bit more jaded and therefore crankier with their customers.

Since driving is a relatively simple skill that requires very little formal education but is nevertheless still in high demand, taxi driving is a popular career for immigrants whose English is imperfect and whose prospects in the corporate world are less than stellar.

San Antonio is not the first city to undergo negotiations with Uber in order for both parties to be (more or less) happy. However, the case of San Antonio vs. Uber is especially interesting because it embodies a larger, more symbolic struggle that has been much on the public mind of late. In his article for the National Review, Kevin Williamson succinctly explains the political/economic term “right of exit.”

Simply put, it means that in any interaction, the party who is most willing or able to walk away from the interaction has the upper hand in any negotiations. It’s the same as in dating, which is a game of who cares less: the partner who holds the power is the partner who is less afraid of losing the relationship.

Guess who had the upper hand in San Antonio vs. Uber?

Uber, which has well-established business in most other major cities in America, didn’t need San Antonio’s business. Sure, it would’ve been nice for them, but when they were confronted with terms they didn’t like, they were able to walk away without sustaining significant losses. The City of San Antonio, on the other hand, was left with no ride-sharing companies (having driven away Lyft in a similar fashion) and a veritable angry mob of citizens who had become quite fond of paying less money for rides from people who didn’t smell like ashtrays.

Uber’s timing really couldn’t have been more perfect, either. At the time that they suspended business in San Antonio, Uber had been operating in the city for roughly a year – just long enough for residents to get a taste of what Uber had to offer, but not long enough for the excitement to wear off.

The issue, ultimately, boils down to the following: how much power should companies (like Uber) have to boss around governments, whether they be city, state, or federal governments?

After the economic collapse of 2008 and the subsequent nasty business of the federal bailout, people have become understandably skittish about the rampant potential for abuse of power by certain organizations. Obviously, there’s a whole host of differences between Uber and Goldman Sachs, but the underlying principle is the same. Is Uber trying to bully the City of San Antonio into ceding some of its power?

Personally, I say no, but it’s a question that everyone needs to take time to evaluate for him or herself. I think that the key difference between the power Morgan Stanley exercises over the US government and the power that Uber exercises over individual cities stems from the fact that unlike the bailout, the reinstatement of Uber in San Antonio was more a matter of popular support than anything else (I know at least a few people who still think that the federal government should have left all those banks high and dry after the financial crisis).

Additionally, the decision to bring Uber back was a choice, not a necessity, on the part of San Antonio. That is to say, apart from having a disgruntled populace, the continued absence of Uber from the city would not have had a severe socioeconomic impact on San Antonio – very much unlike what the situation would have been if the federal government had not followed through with its bailout plan.

That’s a lot to think about, though, in one sitting. Take a walk, talk about it over drinks – you can always catch an Uber home.

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