The first person I ever knew who wanted to tear down a statue of Christopher Columbus was my mother. It was 1986 and my father, an editor at National Geographic, had erected a 10-foot statue to the explorer in the small backyard of our suburban Maryland home. Mom didn’t like the way Columbus dominated the half-acre, even if the basin at the foot of the statue attracted some nice birds.
Uber is a company under attack by politicians and the media. Many politicians, like Bill De Blasio, want to restrain its growth to protect incumbent cab companies. Others want to undermine its business model by requiring that its drivers using its devices be employees rather than independent contractors. The New York Times recently ran a story clearly suggesting that the company is using unfair psychological tricks to keep drivers picking up customers.
These complaints lack merit. Protecting incumbents against new forms of competition is a classic harm to consumers. Uber drivers do not meet the traditional criteria for employees because, among other factors, the company does not control their hours or place of doing business. And as Geoffrey Manne shows, the management innovations Uber introduces through the understanding the psychology of workers have benefits to consumers and drivers alike.
But the assault on Uber also ignores a hugely important effect of company and similar services: they reduce inequality— which these same politicians and mainstream media argue is the most important issue of our time. Uber improves both the material condition of the middle-class consumer and the lower-middle-class driver. First, the consumer gets a service that starts looking more like having a chauffeur than a taxicab driver. For instance, he can summon a driver without previous notice and within minutes by pushing a button on his phone in the comfort of home rather than hail a taxi in a storm.
I cannot remember a time when New York’s Governor and New York City’s Mayor taken together pose a greater threat to liberty and prosperity. Last week each proposed a dreadful policy. Governor Andrew Cuomo succeeded and Mayor Bill de Blasio failed. The different outcomes tell us a lot about what makes some statist proposals more likely to take effect and how to resist them.
Cuomo got his Labor Board to hike the minimum wage to $15 an hour for fast food workers throughout the state. I will not repeat my general arguments against substantial minimum wage hikes. But even minimum wage advocates concede that such sector specific wages will distort the labor market and create a less efficient mix of businesses. Moreover, any law that requires paying someone at McDonald’s in Troy, New York $15 an hour while someone working at Home Depot in New York City $9 an hour is patently irrational given the much higher cost of living in the city.
For his part, de Blasio proposed capping the growth of Uber in New York City ostensibly because the extra cars on the road were causing congestion, but in large measure because the taxi companies are some of his biggest supporters. Even if city streets were becoming more congested it is not economically rational to single out Uber. There is no reason to believe that the customers it serves are getting less benefit from driving around New York than those who take taxis or drive themselves.
What is interesting, however, is that the city council shelved this proposal.
The one crusade of Mayor Bill de Blasio with which I sympathize is his focus on reforming New York City prisons. They are in a disgraceful condition. Prisoners are not infrequently raped and some die because of the neglect of guards. They are sometimes unjustifiably beaten. But de Blasio is discovering a roadblock to reform—the correction officers’ union. This is a source of great cognitive dissonance to him and his left-liberal supporters because public sector unions are supposed to be an essential part of the progressive coalition.
A New York Times editorial nicely captures the dilemma. The Times tries to solve it by pretending that various malefactions of the corrections officer union are due to its nefarious leader, Norman Seabrook. It even runs an unflattering picture of him next to its critical editorial.
New York Mayor De Blasio has been waging a war against charter schools – a reactionary attempt to protect the interests of teacher unions at the expense of poor and minority children. Happily De Blasio has already suffered a reversal of fortune at the hands of his own party and that reversal provides good news about the structure of democratic politics and its capacity to sustain liberty enhancing reforms.
On Tuesday, the governor of New York State, Andrew Cuomo, also a Democrat, attended a rally of charter school supporters in Albany—an obvious riposte to De Blasio’s decisions to take money and property away from charter schools. Cuomo has ambitions to be President and it shows that even Democrats who count public unions as part of their coalition cannot ignore the crisis in public education and the need for reform.
Because the decline of public schools is rooted in no small part in centralized bureaucracy and in the power of teacher unions, solutions take the form of injecting more competition by such means as charter schools, vouchers and merit pay. These forms of competition are liberty enhancing and can help improve standards and increase innovation, particularly in big cities, where the jurisdictional competition afforded by different suburbs is absent.
One might think that teacher unions and bureaucrats as powerful interest groups could thwart these reforms, because they help only diffuse and relatively powerless groups like parents and students.