The Uber saga continues

About half a year ago I wrote a research paper on the resistance to technological change as the reason why Uber is facing such an intense backlash. I used text mining techniques to analyse over 200.000 words from news feeds that contained stories about Uber.

The findings suggested that taxi drivers and other stakeholders backlashed because they were threatened with losing their jobs. Labour standards were not necessarily the top priorities for them. That’s not necessarily counterintuitive. Taxi drivers wouldn’t necessarily be interested in other groups’ wellbeing. Taxi drivers would primarily care to keep their job. Switching to Uber is out of the question because the rent-seeking effect acquired by penetrating the entry barriers to the taxi licensing market offers them a clear advantage.


Economists would be happy with this one. The rational economic actor (a.k.a. the taxi driver) fights to maximise their earnings by keeping competitors away. However, is the taxi rides market in equilibrium? I would tend to argue that yes. Taxi riders are a certain category of clients that have a higher disposable income than someone who would take the bus or the subway. The disposable income of many people in the Western Europe and the US has increased to allow a push to the right in the demand curve. Fares have increased accordingly, rushing to catch the demand.

And here comes Uber. Disrupting our good old taxi rides market.