The Austin Uber Backpedaling Begins

The Austin Uber Backpedaling Begins

Bang! It hasn’t even been two weeks since Uber and Lyft left the Austin market and already the Austin City Council is beginning to backpedal on their demand that ride-sharing companies do fingerprint background checks on their drivers.

The Austin-American Statesman is reporting that Austin City Council member Ellen Troxclair has suggested that Austin should make fingerprint background checks optional just as San Antonio and other cities have done. Shocking. Why didn’t the Austin City Council simply look at how other cities have dealt with this problem in the first place? Why waste hundreds of thousands of dollars of taxpayer money which resulted in nothing but loss? What do I mean by loss?

  1. The City of Austin spent who knows how much in City Council members time debating this issue as well as the cost of having an election on Proposition 1.
  2. Thousands of Uber drivers found themselves out of work.
  3. Thousands of Uber passengers had to find alternative and usually more expensive or less convenient forms of transportation.

Was there a winner here? No. Austin will almost certainly adopt optional fingerprint background checks just as other cities have.

The sad thing is that even those optional fingerprint background checks don’t solve any problems. They are purely security theater. A few people who care might feel safer but that doesn’t mean they are. Additionally, all 7 of last year’s reports of sexual assault by Uber drivers came from drunk, young women none of whom will be in a state of mind to request only an Uber driver who has passed a more rigorous background check when they stumble out of a Sixth Street bar at 2AM on a Saturday night. So even they won’t be any safer.

My original post on this caused several people to tweet at me about how Uber is some big, bad corporation with greedy investors who care nothing about passenger safety and want to squeeze their drivers while they sit in high towers twirling the ends of their mustaches. It saddens me that anyone lacks the critical thinking skills to the degree that they would believe such nonsense.

Of course Uber cares about passenger safety. If Uber had a widespread reputation for being unsafe, they would be out of business. Caring about passenger safety is good for Uber’s profit. Having said that, like many investments, there’s the law of diminishing returns.There’s a point at which riding with Uber is safe enough. As I stated in my last post on this topic, Uber is already extremely safe. You are more likely to be hit by lightning than assaulted by an Uber driver. There’s a point at which Uber won’t benefit by trying to make their service even safer and in fact will instead cost them which ultimately costs the consumer. How does that work?

Like any business, Uber is in this to make a profit. If you think that’s a bad idea, you don’t like free markets and should probably stop reading now. The more expense they have, the harder it is to make a profit. That leads either to charging customers more per minute or making less profit. They won’t do either unless they have no choice. You may think that regulations can be put in place so they won’t have a choice. That’s faulty logic. People always have a choice. If regulations make providing ride-sharing unprofitable or simply less profitable than deploying their money elsewhere, Uber and its shareholders will move on. That’s exactly what they did do when this ridiculous regulation could not be over-turned. They exited the Austin market. Would you leave your money in a savings account that paid far less interest than at another bank? Would you leave your money in a poorly-performing stock when you knew of a better one? Would you keep paying for your child’s college education when they were spending so much time partying that their grades were suffering? Of course not.

Why would Uber leave over such a silly little thing as requiring fingerprint background checks? Because it’s not a silly little thing. Uber knows better than anyone that fingerprint background checks don’t solve any significant problems but they do make the process of hiring drivers more onerous. If they don’t make sure there are enough drivers, enough supply for the demand, passengers will no longer feel that Uber is a reliable service and they will stop using it. This isn’t Uber’s first rodeo. They have been down this path before in other cities. In most every case, the city eventually receives enough complaints about Uber leaving the market that they backpedal (as Austin is doing now) and make the fingerprint background checks optional. The fact that Uber was willing to leave the market over this should tell you something.

Most people work for someone else. Unfortunately, that leads to a very one-sided view of how businesses work. It’s been tweeted at me that Uber pays less than minimum wage (they don’t) and that as a result, Uber drivers must rely on government welfare. Let’s examine that for a moment. First, we don’t know that this is even true but let’s assume that it is. Bob is an Uber driver. In our fictional scenario, Bob can’t make enough driving for Uber so he qualifies for government benefits. Why doesn’t Bob stop driving for Uber and take that high-paying corporate job he keeps getting offered? Because no such job offer exists. Bob drivers for Uber because Bob thinks thats his best option. If there was a better one, Bob would likely take it. In other words, if Bob stops driving for Uber and goes to work elsewhere, he’s likely to earn a similar amount of money which means he is just as qualified for government assistance as before. Nothing has changed. If Bob could earn more elsewhere he wouldn’t be driving for Uber. This is the same argument that has been used with Wal-Mart. I quite rarely shop at Wal-Mart nor do I own stock in the company. I’m no fan. However, if people who work at Wal-Mart could make better money elsewhere, they would do so. Since they can’t, they are no more reliant upon government welfare than they would be any where else. If they instead increase their skills to the point where they make enough to no longer need welfare, great. However, that is up to them, not their employer.

It has been tweeted at me that Uber is under-cutting taxi services. That’s a charge that is absolutely true. That’s the free market folks! That’s competition. That’s how the world becomes more efficient. Someone finds a better way and people pay for it. If the taxi services had been smarter, they would have seen Uber coming. They would have become Uber before Uber ever arrived. They didn’t because people tend to get stuck in their old habits. Companies are as guilty of this as anyone else because companies are made up of…wait for it….people! Do you want to know why Apple is the biggest publicly-trade company in the world with profit margins that other companies only dream of? Because Apple admits to something that the overwhelming majority of other companies do not: there’s someone else out there right now working on creating the product that will obsolete what we sell so we better do it first. Apple doesn’t care that the iPad might result in fewer Mac sales because they are still making money. If Apple doesn’t create it, someone else will.

I have been self-employed most of my adult life. It’s not easy. I remember hiring my first employee (Jason, who still works for me 20 years later btw) and thinking, “What if I can’t generate enough revenue to pay his salary? That would mean he can’t pay is rent or buy food!” Being an employer is a huge responsibility. That feeling never goes away. I’ve been running my current business, Xojo, Inc., for 20 years now. While I have gotten used to the feeling of responsibility for my employees and while it’s easier to manage that responsibility than it was when I first started, I still feel it. Being self-employed changes you. It changes how you look at the world. It makes you realize that there are two-sides to everything. The best thing is being able to see any situation from all sides so you can most efficiently resolve it. We would be better off if everyone, at some point in their lives, ran their own business.

That’s not likely to happen but what can happen is for more people to apply critical thinking to situations they encounter. When faced with a problem, try to avoid immediately getting caught up in the emotions of it and instead apply some rational thinking. Try and see it from all sides. Do some research (which with the Internet is so easy now) and see if the problem really does exist and is big enough that we should spend time and resources to resolve it. Not every problem is actually worth solving. We don’t have unlimited resources. We must prioritize our activities. You can do a few things really well or a lot of things really badly. Critical thinking helps us realize this and it’s something we could use a lot more of in today’s society.

I’m confident that Uber will be back in operation here in Austin within the next 30 days or so. I’m glad for that because it’s a valuable service that I have only just begun to utilize. I’m also glad that the Austin City Council has at least one reasonable member in Ellen Troxclair.

Gun Control: How much is reasonable?

This week President Obama issued an executive order aimed primarily at closing the loopholes that allow guns to legally be sold without a background check. Unsurprisingly, this has generated quite a bit of controversy.

Many conservatives argue that the 2nd Amendment is clear: the Federal Government should not in any way restrict our right to bear arms. Liberals have countered with a different interpretation suggesting that our Founding Fathers meant that state militias should be free to bear arms. While I can understand why liberals think that, grammatically that doesn’t make sense. If that’s what the Founding Fathers wanted, they would have been more clear.

Having said that, imagine your neighbor who has a Ph.d in physics starts building a hydrogen bomb in his garage. Are you OK with this? Now I know what you’re thinking. We have laws against that right? We do. I doubt you could find any sane person who would argue that the 2nd Amendment gives your neighbor the right to build a weapon of mass destruction within a few yards of your living room. So we all agree there is a line somewhere and atomic weapons are clearly on the other side. The 2nd Amendment does not give each of us the right to bear any type of arms. There are restrictions. So the question is what should those restrictions be?

Imagine if a driver’s license was not a prerequisite for taking a car out on the highway. How safe would you feel knowing that many of those around you may not have any clue about the traffic rules and/or may have repeatedly violated them? There have been laws in place for years that require a background check when purchasing a firearm from a gun dealer. These were designed to preclude some people from buying firearms because they have indicated a serious lack of judgment. We could argue just how big the circle encompassing them should be but that’s for another day.

Unfortunately, gun dealers are not the only place you can legally purchase firearms. They can also be purchased at gun shows and online from private citizens with no background check required whatsoever. The President’s executive order will close these loopholes. It won’t stop every bad guy from buying a gun. Nothing will stop that. Even if we outlawed guns altogether and went around collecting them from everyone that had them, there would still be bad guys with guns. Seat belts don’t save everyone either but they save enough people to warrant their mandatory use.

I haven’t convinced you? Imagine your four year old daughter running around the backyard squealing with delight on a warm summer day while you’re inside making lunch. Unbeknownst to you, her shrieks have penetrated your neighbor’s bedroom through the window he left open. After a night of heavy drinking and another one of those fights with his wife you’ve heard far too often, this felon with a history of violence is suddenly awakened and he’s fuming. Enraged, he grabs his Beretta 93R machine pistol, a weapon that fires 1100 rounds per minute, punches out his window screen and sprays your backyard.

Are you really in favor of making it easier for him to purchase a gun?

Government waste? O.M.G.

I think it’s pretty much a universally-held belief among Americans that the US federal government is wasteful. We believe this because we have all heard stories of the government paying $500 for a hammer. It was recently reported by a questionable source in India that President Obama’s most recent trip their was going to cost the US taxpayer’s $200 million a day. That was then echoed by many conservative US news sources whose fact-checking goes on holiday when they can say anything negative about the opposing party. I don’t know the actual cost but I seriously doubt it’s anywhere remotely close to that number.

But is the US government really wasteful in the big scheme of things? Perhaps we are just hearing anecdotal evidence that is taken out of context. That could be, right?

While the President creates the budget, it is Congress that must approve or deny it. They hold the purse strings. So ideally, you want the people holding the purse strings to be the no-nonsense, do everything with ruthless-efficiency, type. After all, if they are not, how can we possibly expect the rest of the US government to be any different?

Today I stumbled across something about Congress that was quite shocking to me. Representative Darrell Issa, a republican for California’s 49th district was the conservative guest on Bill Maher’s panel on REAL Time with Bill Maher this past Friday night. I had never heard of Darrell before but he was re-elected this past Tuesday for the 6th time so enough of his constituents  clearly like him. He’s very smart, reasonable and actually pretty liberal for a republican. If he was a blue dog democrat, I doubt he would have to change his stance on anything. During the show, he mentioned he was for a flatter, fairer tax. I’m a big fan of the Fair Tax and in fact it’s one of the very few political organizations to which I have ever donated. I found myself wondering if Darrell Issa was a supporter of the Fair Tax. I went to the Fair Tax web site where they have a list of those in Congress that support it. Sure enough, Darrell Issa is a supporter of it. Great. I’m liking him more and more.

As it just so happens, the list of supports on fairtax.org is actually just a link into the Library of Congress database of bills that have or will go through Congress. A bit of clicking and I could see all the bills to which Darrell Issa is a sponsor or co-sponsor. It appears that if you support something (prior to a vote) you show that by being a sponsor or co-sponsor.

Darrell Issa is the sponsor or co-sponsor of 307 bills in Congress. I realized that what I was seeing was a view into what Darrell spends a lot of his time on in Congress. I don’t know this to be true of course but he is a congressman so it would seem like a safe bet that the bills he sponsors or co-sponsors consume a good portion of this time. The search results show 100 bills at a time so I decided to just scroll through the first 100 and see what they were like. I think stunned-disappointment is the only way to describe how I felt.

Of the first 100 bills, eighteen were recognizing some special day, week or month of the year. I’m talking about things like “National Sudden Cardiac Arrest Awareness Month”, “World Intellectual Property Day” and “American Craft Beer Week”. Eleven recognized anniversaries such as “40th anniversary of the National Eye Institute” or “150th anniversary of John Brown’s raid in Harpers Ferry”. Forty bills expressed support for something like the District of Columbia school scholarship program. Note that “expressing support” should not be confused with “providing funding.”

Only twenty-five of the bills  had anything to do with something that seemed to be real Congressional/government business. Now I realize this sounds like I’m picking on Darrell Issa but really I’m not. I’m reasonably confident that Darrell’s list is pretty similar to the lists I would find if I looked up just about any other Congressman. In fact, I would be willing to bet that many other members of Congress have lists where “stunned-disappointment” wouldn’t come close. From my quite limited exposure to Darrell, he seems like a very smart and reasonable person. If I lived in his district, there’s a chance I would vote for him.

But is Congress really spending only 25% of their time on things that matter? Don’t get me wrong, I’m sure the goals and ideals of “National Sudden Cardiac Awareness Month” are worthwhile. I’m not so confident of those of “American Craft Beer Week”. But unemployment is at 10%. The economy is in the toilet. The US government is currently over-spending by 33% and we have racked up almost 14 trillion in debt. Can we really afford to have Congress spend 75% of its time (and as a result, our taxpayer dollars) on things that compared to the state of the economy are utter nonsense?

I heard someone recently say that the democrats lost the 2010 mid-term elections because the voter perception is that the democrats haven’t done much in the last two years. They have done a lot, and we can argue about the merits, but the reality is not relevant. Only perception is relevant. 75% of the bills I scrolled through should only perhaps being taking up the limited time of our people in Congress if and only if the government was humming along like a well-oiled machine and it’s far from that. So my perception now is that Congress is currently wasting 75% of its time and our taxpayer dollars.

You can search the Bill Summary and Status of the 111th Congress (2009-2010) here.

I know writing to your representatives in Congress is asking a lot regardless of how important it is that we get our government’s fiscal house in order. So I’m not going to ask you to do that. But you can do this. Express your outrage (if that’s what you are feeling) on Twitter, FaceBook, your blog, etc. Express in emails to your friends and family. Feel free to include a link to my blog if you like. The more we show our feelings on this, the more our representatives in Congress will listen. Shout your outrage on the Internet. It does make a difference.

Our country is on a steady downward spiral. Our children are going to truly pay the price of our unwillingness to act. But there is still time. We can find the political will to make the really tough choices while there are still choices to made. Like air pressure, economies equalize over time. We can either have a very, very windy day, or wait for a class 5 hurricane.

Negative political ads

To anyone running for public office:

The negative ads you run have gotten so outrageous that they are no longer believable. You take the smallest issues out of context that are in almost always questionably open to debate and you make them sound like the severest of transgressions. I have finally reached the point where I have so little confidence that any of the information in negative political ads is accurate that I just don’t believe them anymore. In fact, in most cases the ads, at least for me, backfire. When I see a negative political ad, it reflects poorly on the candidate that paid for the ad.

You want to convince we you are the right person for the job? Then focus on you. Because when you use negative political ads, it sounds like you are asking me to choose between the lesser of two evils. In other words, I assume you are just as bad as the other candidate. And who is worst? The candidate that voted for a tax hike affecting a tiny number of people or their opponent that takes that out of context and exaggerates it to the point where it appears that the only thing the target candidates cares about is raising taxes on everyone?

I wish candidates simply filled out a form that explains their experience, education, etc., and reasons for wanting to run for office. Then we could have some televised debates. I’m becoming a bigger and bigger fan of publicly political campaigns where the candidate with the most money doesn’t have the advantage.

And we wonder why so few people vote?