A great observation this morning by Benjamin Golub:
Regularly, I'm stunned by how much social surplus Uber created by inventing its basic platform. One of the most striking things for my immigrant family about the US in the 90s was how, even in the inner suburbs, having no car really limited how much of a person you could be.So if you were e.g. a young adult of modest means or a woman in a bad marriage, lacking control of a car crippled and constrained you. Cabs existed but were basically out of the question given how bad and expensive they were outside approximately three cities. Those use cases for vulnerable populations are crowd-pleasers. But in zillions of other cases, more mundane convenience makes a day much better; now add that up across hundreds of millions of people. One reason among many that people mock the company is that it bleeds money. But at an Econ 101 level all that means is that they're (for now) keeping very little of the enormous value they created. Other companies followed, but pioneering the platform and getting it to work in real life was... a big deal. So this is just an ill-advisedly earnest appreciation of the beauty of economic growth—new new ways of mutually beneficial exchange. We have justified concerns about lacking good (or sometimes even decent) urban planning and public transit. And justified criticisms of asshat CEOs and whatever else. But it's easy to forget how big of a difference it made for folks to have better choices, given our actual world.
To paraphrase, the company isn't making money right now, but that just means that it's a large consumer benefit: basically the company is subsidizing riders, and that's good for consumers! There are secondary issues such as traffic that are important, so getting the taxes right is important (and that will make it harder for Uber to get into the black) but this is a good reminder of the importance of straight up consumer benefits!
