Why Do Taxi Drivers Racially Profile, While Uber And Lyft Drivers Don't? It's Called The Free Market Working.

On March 24, the New York Post ran an article about the downfall of cabbies in New York City. They reported that four cabbies have shot themselves in recent months thanks to the plummeting value of taxi medallions, which have fallen into disuse thanks to the rise of ride-sharing companies like Uber and Lyft. According to the Post:

NYC cabbies are being driven to the edge of financial ruin and despair as ride-hail apps like Uber and Lyft continue to take their customers.

This prompted Matthew A. Cherry, former NFL player and now-filmmaker, to tweet:

Cherry is exactly right, of course. Seth Mandel, opinion page editor of the Post, wrote:

As Robert George wrote in 2015:

To call a spade a spade: New York’s yellow-cab service is a decades-long government-approved monopoly operating a system that discriminates against outer-borough/upper Manhattan communities of color.

But this neglects a serious question: why not? Why aren’t Uber and Lyft drivers discriminating against minority passengers the same way cabbies have done for decades? Are they simply better people?

The answer, of course, is no.

There are two reasons that taxi drivers discriminate against minority passengers and minority areas. The first is what black economist Thomas Sowell has described in his new book as Discrimination I(b) – discrimination against individuals based on available group data. This is not quite the same thing as saying that you’re never going to pick up a black person because black people are inherently violent, which would be racist; it’s more like saying that you’re not going to increase your risk of being victimized by violence, and since the violent crime rate in the black community is higher than the violent crime rate in other communities, knowing nothing else about the passenger than race, you’d rather avoid the statistically greater risk.

Uber and Lyft solve that problem. They solve that problem by allowing drivers to see the ratings for passengers. This individualizes data, making group data irrelevant. Thus, drivers can see if a passenger has a 1-star rating, they probably shouldn’t pick him up, regardless of race. That makes it far more likely that black people are picked up by drivers. This is the same argument as the argument for using criminal background checks in employment: that prevention of that methodology actually leads to fewer minorities being employed, because employers start using group data instead of individual data, thus lumping in law-abiding minorities with those with a criminal background.

But the technology wouldn’t be enough to overcome discrimination. The other issue is that Uber and Lyft aren’t monopolies: they’re competitive businesses. That means there is a competitive advantage in going to higher-risk neighborhoods – the taxis aren’t out there. Competition broadens the rationale for catering to higher-crime areas, for example. You can make money the other guy won’t. That’s not true when a government-sponsored cartel rules everything: the available pool of competition is so small that you wouldn’t drive out to a high-crime area when you could make an artificially-inflated wage driving in a low-crime area.

So, the free market is the reason Uber and Lyft drivers don’t discriminate against minorities. And Leftists should keep that in mind next time they try to crack down on private business in the name of diversity.

What's Your Reaction?