How Capitalism Saves You Money

When Uber first came on the scene I largely ignored them.  I thought the idea was great, one of those “Why didn’t I think of that” ideas that’s both simple and revolutionary.  I love seeing industries get disrupted, especially old ones like the taxicab industry.

But I don’t need taxis very often because I’d rather bike or walk.  In addition, I live in the DC area where we have a “U.S. class” metro system (it’s not world class, and if you think it is you haven’t been to many metros around the world).

But cab rides for me were, and still are, pretty rare.  When I take them it’s almost always to the airport, because of either excessive baggage for my climbing trips, or oppressive summer heat that would render me a big ball of sweat if I walked or biked.

When I was still a faux important big-wig at my W2 job and working full time, I traveled about every 6 weeks or so.  I started using Uber around 2015 and really liked it.  My main impetus to use them was that I hated using cash. 

Prior to using Uber about half of the taxis I took wouldn’t take credit card.  As a savvy financial independence proponent, I put everything on credit card to track my expenses easily and to get lots of free stuff.  No brainer. 

Uber was also cheaper than the local cab company.  Bonus.  Most importantly of all, Uber had a “killer app” – the map that showed me where the driver was was!  What seems like just a cool feature to most is absolutely crucial in the DC area.  Why?

The DC Metro area has the worst traffic in the country, we usually tie Los Angeles for first place in that prestigious and life destroying category.  So numerous times I found myself nervously waiting for a cab to arrive, as I mentally computed whether or not I’d make my flight. 

In our area, 1 mile can take 15 minutes or longer on any given day.  It’s that bad.  I’ve missed flights before from being stuck in traffic, and the anxiety of wondering where the hell my taxi is frankly sucks.  You’re just stuck sweating it out in your living room waiting for that blessed yellow car to come down the street. 

With Uber, I could watch the car coming on my phone in real time on the map.  And if it appeared the car was stuck in gridlock I could cancel, hop in my car, and still try to get to the airport on time.  So I switched to Uber and largely forgot about my local cab company.

 

The Taxi Company Wakes Up

Then one day I went to the Uber app to go to the airport and the service was down.  So I resigned myself to going back to the cab company, no big deal. 

With the cab company, you still had to call them and talk to someone.  Old school. 

Well it had been about 2 years since I’d done it, and when I called this time instead of having to actually talk to a human being, which we all know is annoying these days, they had a quick automated system. 

“Well” I thought, “…that’s new”.  So I played. 

I told the system where I wanted to go and my pick up address and it said “A cab is on the way” in a pleasant computer generated voice. 

Then I remembered “Oh great, I have no map to check.  Who knows how long they’ll take.  They might get hung up in traffic.  I want to be able to tell if I need to abandon the cab and go in my own car to make my flight.  I miss Uber now.”

Right after that I got an automated text from the cab company, and it had a link.  It said “Track your taxi’s progress here”. 

I clicked it, and a beautiful mapping app popped up showing my cab, the driver’s name, and his live movement!

Whuuuuut?  Is this the stone-aged cab company that I knew?

It gets better.  When I got to the airport the price was significantly lower than Uber, and they took credit card!  I asked the cabbie and he said they converted all of their cabs to credit card the year prior.  

So within two years they went from having a human dispatcher to taking calls automatically.  They went from no tracking or mapping application to having a really great one.  And their usual price to the airport which I had been accustomed to for a long time dropped about 25%. 

I was now paying less to go to the airport than I was 8 or 9 years before, before even adjusting for inflation.

All because Uber threatened them, disrupted them, and was taking away their business.  

That’s why capitalism is the best system.  It spawns innovation and creates the best value for customers.  I didn’t get to financial independence by paying more for things.  I got there by having choices to pay less, and I used them. 

Another example is Airbnb and how they’re disrupting the hotel industry, big time.  They’re forcing hotels to compete, by bringing down prices and adding amenities like full kitchens. 

I don’t want to go out to eat every night when I’m on a trip.  Restaurant food is unhealthy and expensive.  I like Airbnb’s because they’re cheaper and I can get a full kitchen.  Hotels are being forced to deal with it.  We win.

 

I’m A Cab Guy

I’ve checked Uber since and they’re still a good deal more expensive from my house to the airport than a taxi.  So I’m sticking with the taxis.

The taxis adapted, innovated, and caught up.  All to survive.

So for all you smart geeks out there getting ready to disrupt industries, I say do it!  Make old school and stale business models and institutions adapt and get better.  Keep capitalism going!  Go forth and disrupt, it saves me money!