Six economic reasons to hate Uber
Many economists love Uber. They look at the quasi-taxi company's aggressive disruption of local monopolies as a case study in the power and wonder of free markets. They could hardly be more wrong.
The enthusiastic generalists come first, because Uber does not compete on their desired equal footing.
The second group of economists who should dislike Uber are specialists in labour markets. They know that the standard early industrial practice of pushing down wages as far as possible is bad, for the affected workers and for the whole economy.
Transit economists are a third aggrieved group. They have learned that free markets do little to help arrange urban travel, because the full costs and benefits from the different modes of transport cannot be captured by prices.
Management experts are not always considered economists, but whatever they are called, they are the fourth group who should be Uber-angry
Fifth on the list are regulatory economists. They can provide some comfort to Uber fans, as well as to many customers, since Kalanick really did attack many inefficient and unjust local arrangements.
Finally, Uber should give financial economists a queasy feeling. They like to think that their beloved financial markets make good judgments of all available information.
For a company with annualised sales of around $50 billion, large current losses, no clear path to sustainable profitability and serious questions about its future relations with regulators, something much closer zero looks more in line with sound economics.
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