David Michael Miller
Madison mayoral candidates Paul Soglin and Scott Resnick have different takes on Lyft and Uber. The election is April 7, 2015.
Ironically, a company that barely existed at the time of Madison's last mayoral election is central to the current election.
The company is Uber, an app-based "ridesharing" service that allows users to book transportation to desired destinations using mobile phones. The entire transaction is arranged and settled through the Uber app, and no money changes hands between passenger and driver.
Research shows that wait times for Uber cars are dramatically shorter than for typical taxi dispatch, and fares can be as much as 40% to 50% below traditional taxi rates. Uber also allows customers to choose from a variety of options and thereby customize their riding experience. The combination of lower prices, greater convenience and more options has made Uber remarkably successful, expanding to over 200 cities in at least 53 countries since December 2011.
Madison, however, is not one of those cities. Although you can book an Uber ride here, ridesharing services remain illegal. The Transit and Parking Commission is currently considering whether Uber and other ridesharing firms (such as Lyft) should be allowed to operate in the city, and some local officials are taking a hard line against the newcomers.
Leading the charge is Mayor Paul Soglin, who treats Uber as if it were the spawn of Satan, or at least the Koch brothers. The Paul Soglin for Mayor website describes Uber as a "company headed by a devotee of Ayn Rand" that makes "conscious decisions to destroy full-time jobs." The mayor likens Uber to a "new form of serfdom," which might be accurate if medieval serfs used smartphone apps and complex, back-end routing algorithms to find rides to their masters' fields.
His mayoral challenger, Scott Resnick, takes a different view. The first item on his campaign's site declares that Uber, Lfyt and other ridesharing firms "are here and they are not going away." Resnick believes cutting-edge ridesharing technology can help "devise innovative solutions that meet our city's transportation needs." Nevertheless, he wishes to load a number of regulations onto Uber and similar firms that currently apply to taxis, including licensing by the city, background checks on drivers, insurance requirements and restrictions on "surge" pricing during high-demand times.
Resnick's position is more reasonable than the mayor's, but it still doesn't recognize how technology and Uber's business model make such mandates unnecessary. Uber does its own background checks on drivers, and each Uber ride can be tracked in real time. Passengers can also review Uber drivers (and vice versa); new customers can check the reviews before accepting a particular driver. Such crowd-sourced reviews create transparency and "reputational effects" that help keep drivers honest and courteous. Uber rides are also entirely cashless, which greatly reduces potential dangers. These unique features actually improve the safety of Uber rides compared with traditional taxis, and none would be enhanced by an additional background check.
Just who is covered by Uber's insurance policy -- and when -- has been controversial nationally, but the company is a well-capitalized firm that can absorb potential liability from accidents. "Surge" pricing is critical for ensuring that the demand for Uber cars does not exceed available supply. Unlike conventional taxis, customers see what Uber intends to charge before they accept or reject a potential ride, so pricing that reflects demand does not exploit customers.
All of this may, or may not, be interesting, but it raises the question: Why is a new ridesharing service a salient politicalissue? Since when do elections depend on taxis, rather than taxes?
The reason is Uber is symbolic of a new and broader development called the "sharing economy" or "peer to peer" (P2P) networks. A central idea behind the sharing economy is using technology to unite a diffuse network of consumers to share or exchange underused assets. Uber does this by allowing people to rent unused space in existing cars. Other examples of P2P include housing (e.g. AirBnB, which rents unused rooms in houses), publishing, music and credit.
The sharing economy and P2P networks are tremendously appealing to tech-savvy young adults. This demographic is growing in Madison and is increasingly concentrated in new housing on or near the isthmus. These are also Uber people; I'd wager that nearly every Epic employee hired in the last 10 years is an Uber fan.
The isthmus and near east side is also Scott Resnick's base, so it's not surprising that he's identified himself, more or less, as the pro-Uber candidate in the mayor's race. Doing so puts Resnick on the side of a new, P2P vision for economic development, in contrast to what may be perceived as Soglin's stodgier, TIF-centric approach. Even if it is mostly symbolic, this is smart politics, highlighting Resnick's own tech background, and it could extend his appeal to technophiles throughout the city.
Will it be enough to put him over the top on April 7? Of course Soglin is a heavy favorite, but he's lost before, and motivation is critical in low-turnout elections. Whatever happens, this probably won't be the last time Uber or other P2P issues play a role in Madison politics.
Larry Kaufmann is an economic consultant based in Madison.
