Black cabs are fighting a losing battle against Uber

A new study published by the National Bureau of Economic Research examines different types of taxis in terms of efficiency across five cities by comparing UberX drivers with traditional taxi drivers. Efficiency is measured by the capacity utilisation rate which is the fraction of time a driver has fare-paying passengers in the car while he or she is working, and the proportion of total miles covered by drivers that is spent with a passenger in the car.

The findings are overwhelmingly in favour of our new favourite app with UberX drivers spending a significantly higher amount of their time, and driving a substantially higher share of miles, with a passenger in their car than taxi drivers do. This is because Uber more ably matches drivers with passengers; Uber operates on a larger scale; burdensome taxi regulations hold traditional taxis back; and the flexible labour supply and surge pricing models of Uber more accurately meet demand with supply.

Uber is indeed fantastic. From the moment I downloaded the app, it made my life easier and I have saved money. You can see how many Ubers are in your area, view the profile and customer-created rating of your driver and get an immediate fare estimate and length of wait time. Living in a cetral location in the city, I am averagely picked up within three minutes. UberPool now even allows customers to share their ride with others who are using the app and going in the same direction, in order to further save money.

Innovations continue to improve the quality of people’s lives, in every aspect of their lives, across the world. The combination of the mobile phone and the internet caused the most recent jump in progress as a plethora of previously unimaginable technologies came about, from Uber to Airbnb to Zipcar. These are all part of what has become known as the sharing economy and as we speak a growing number of similar technologies are being developed.

Despite us all being evermore better off and progress being unstoppable if we take a long view of history (the power of markets is even managing to sneak steadily into the North Korean dictatorship), it is still popular among some dogmatic sects to resist advancement. The unsettling part is that they manage to garner a – sometimes large – following.

It is not hard to imagine why the evidence has not shaken anti-Uber campaigners. Their protestations seem to be based entirely on short-sighted, inside-the-box views of the world. Now the latest to be publicly against Uber is Sadiq Khan. Unfortunately so is his contender and Conservative candidate for London Mayor, Zac Goldsmith. As a result they have been completely mocked, and this is not surprising.

Seeing politicians whose parties are supposedly concerned about and trying to tackle the cost of living crisis tell the people of London they should be choosing black cabs, which can cost as much as three times the price of an Uber, and that they will work to stifle the far cheaper alternative, just beggars belief.

London Private Hire Car Association and the Licensed Taxi Drivers Association, who are Uber’s main adversaries apart from Transport for London, claim to only want “a level playing field” but this is simply not true. They also require that Uber be brought down with them. Every demand we hear from the black cab camp is to burden Uber to the same degree that they currently experience. One example is the compulsory five-minute wait time, thankfully at bay (for now), almost instituted for Ubers by TfL: completely lacking logic and certain to cause destruction of a service that benefits London’s population.  

But of course they will do anything to keep up the fight against change and they will even cut their nose off to spite their face. We witnessed this when Uber, in an act of courteous competition, tried to enable black cabs to take advantage of its customer-and-driver-pairing technology but this was rejected by rivals who have been nothing but irrationally hostile to cooperating with Uber.

As the recent research found, Uber is very good at accurately matching supply and demand. This is good for customers, good for low-skilled workers seeking employment and good for the country’s productivity. It will therefore be sad to see the forthcoming curb on the number of Ubers that can exist in London, especially when the evidence does not support the reason given by the LTDA’s Secretary General that it would reduce congestion and pollution: Ubers actually spend less wasted time on the roads than other types of taxi.

Last week I heard Mungo Wilson tell a conference of sixth form economists that he had just been shown a picture of Manhattan in 1913 and a picture of the same street in Manhattan a decade later. In the first it was full of carriages with just one car – in the second the street was buzzing with cars and carriages were no where to be seen. This is kind of it in a nutshell: capitalism permits innovations that make old, useless ways of doing things obsolete.

Faced with the evidence, anti-Uber campaigners seem nothing but ideological nuisances who resist capitalism and free markets at any cost – even if they harm themselves in the process.


  1. I think you missed the point of the problem of Uber from traditional taxi driver’s viewpoint. A traditional taxi driver is forced to pay for much more expensive insurance, has to pass tests and has a lot of extra overheads put on them by regulations. Uber however does non of that and therefore is benefiting from breaking regulations. That is the problem uber needs to address and until its drivers conform to regulation or we as a nation say we don’t care about regulation and remove it they have every right to complain.


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