Labor unions are losing to the free market: Cab drivers seek higher paying jobs with innovative on-demand car services

Uber Driver

Taxi unions are doing everything in their power to keep on-demand private driver services from entering the market. Cab drivers in Boston organized a protest of Uber last week in an attempt to intimidate the business, and a taxi cab union in Washington filed suit against the company several weeks ago. They’re not alone, though. Municipal governments are looking for ways to restrict the popular services from operating within their boundaries.

The issue at hand is simple: well-connected organizations (taxi unions) collude with their friends in government to keep prices high and service quality low for themselves, while attempting to regulate out any and all innovative competition.

It’s a win-win for unions and government, and consumers ultimately lose in the end. But now, there’s evidence the crony collusion actually hurts cab drivers, as well.

The Washington Post’s Matt McFarland compared average wages for cab drivers to averages wages for UberX drivers, and the results are shocking:

A major shift is underway on America’s roadways. For a long time, driving strangers from point A to point B paid terribly. Estimates of the typical cab driver’s salary hover around $30,000.

According to Uber, the median wage for an UberX driver working at least 40 hours a week in New York City is $90,766 a year. In San Francisco, the median wage for an UberX driver working at least 40 hours a week is $74,191.

Some cab drivers are getting the message. They’re jumping ship for better opportunities, higher pay, and nicer cars. Denver UberX driver Ali Vazir likely sums up the feeling of many cabbies who jumped ship:

“I feel emancipated. I’m so much happier, and my passengers are happier, too.”

It would seem, then, that taxi unions aren’t looking out for their own drivers, who make lower wages under the current system. Instead, they’re looking to maintain their political clout while continuing to monopolize an industry that’s attempting to incorporate technological advances to meet demand.

Taxi companies are slow to adopt new technology, and in many big cities it isn’t clear whether drivers take cash, credit, or both. Cars are often less-than-clean, and there’s little incentive to provide exceptional service. No wonder the status quo are afraid of change.

Cab drivers will likely continue to abandon the taxi cab system for opportunities like Uber, diminishing the power of the unions and maximizing quality and service for consumers. If the antiquated system doesn’t attempt to compete with its innovative competitors, you can bet consumers (and drivers) will side with services like Uber and Lyft.

 


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