Join the Shared Economy to Disrupt the Status Quo

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Posted by The Savvy Retiree on July 10, 2016 in Money Saving Strategies, Personal Finances

“Today is already the tomorrow which the bad economist yesterday urged us to ignore.”
— Henry Hazlitt

Joel Bowman writing on a shared economy…

“The taxis in this town are a mafia,” the driver exclaimed in rapid-patter Spanish. She met our eye deliberately in the rearview mirror, as if to stress the point. “For too long they’ve had a monopoly over this basic service. No longer, though. Not anymore.”

Your editor was hurtling through traffic, careening along Avenida Las Heras, on the way to a chic microbrew bar in the trendy Palermo Hollywood barrio.

The area, as the name suggests, is frequented by media and entertainment types. Not our usual crowd, to be sure…but a fun night’s activity every once in a while.

Outside our cab the rain came down. A few cyclists braved the weather. Roundabouts, as is typical here even in the best of conditions, were little more than loosely controlled chaos.

The driver proceeded with commendable caution. Her smartphone, perched precariously on the dash, sang out directions every few blocks.

With this small piece of technology, and a couple of free apps, this woman in her (we guess) mid-50s had become her own boss. Even if she was off to a bit of a shaky start…

“No, that’s not the way,” our fellow passenger interrupted, gently. “You should have taken the last left.”

OK, so she wasn’t the best driver. Nerves, we suspect.

“Sorry…I’m just beginning with Uber, you see. I’m getting used to the streets. And the traffic. And the weather. Well, all of it, really,” she said.

“No worries,” we replied. “You’ll break the mafia up soon enough.”

To be honest, we’ve had very little troubles with the local taxis here in Buenos Aires. Yes, we’ve heard stories (the infamous 100-peso bill switch is a common enough scam), but our own experience has been almost universally positive.

Taxis are plentiful and, so we thought, cheap. And the drivers are typically friendly, colorful characters.

Then we took our first Uber here last weekend. Our friend, on whose account we rode, told us the ride was half the normal fare. And the driver, despite some beginner’s nerves, delivered us to our destination without incident.

A receipt, complete with the price and a map of the ride, was emailed the moment the ride finished. It really is just a better service. No question about it.

But then, you don’t have to take our word on the matter…

That’s the thing about open competition in a marketplace; someone’s always out to better the service, to offer a more competitive price, to devise innovative ways to serve consumers.

It’s what capitalists do.

Around the world, new and disruptive markets are taking on the existing, entrenched “mafias” in ways we couldn’t have imagined just a decade ago.

Moreover, they’re convincing customers to make the switch, not by imposing a new law or regulation (hiring the gun of the state) but by appealing to people’s better judgment and common sense.

When they succeed, it’s we, the customers, who win. And when they don’t, when we the customers decide their service is not up to snuff, we divert funds from their businesses and send a signal to the market that their model does not serve us as desired.

In a way, it’s voting with our wallet that really makes the difference.

Image: ©iStock.com/Erik Khalitov