Last week, NYC Uber employees reserved and then cancelled more than a hundred rides from rival car service provider Gett, denying service to many would be customers. Both companies provide taxis that one can call using a cell phone app, a service which until recently was barred by regulations designed to protect the interests of traditional cab drivers. The opening of this market niche has paved the way for fierce completion between app based taxi services. Uber entered the market first, but their surge pricing system, in which fares are raised during peak transit hours and inclement weather, has put off many consumers. Emergent rivals, like Hailo, and Gett, use flat meter based fees. In the wake of a recent Toronto snowstorm, Uber’s pricing was criticized while many taxi app users took to social media to celebrate Hailo’s comparatively cheap pricing scheme. Uber CEO Travis Kalanick responded by mocking his disgruntled customers, and the disruption of Gett’s service will only serve to further cement his reputation as a brigand. The Gett staff were quick to capitalize on the disruption, posting images from the film Braveheart on their website while casting their company as a valiant underdog. Kalanick may currently enjoy some level of market supremacy, but taxi app users may well strike back, with an invisible hand.
I am confident that, despite the scheming of Travis Kalanick and his compatriots, the best service will eventually win out. This isn’t the first time the providers of rival services have engaged in underhanded public relations campaigns or attempted to disrupt the work of their rivals, and it will not be the last. American history is dotted by nonviolent “wars” between innovators, all which eventually served to help the consumer, and frequently, to unseat hubristic titans of industry.
On January 4th, 1903, inventor and terrible person-in-chief Thomas Edison used alternating current to electrocute a circus elephant named Topsy. This was not done out of any malice towards elephants, but a desire to prove that distributing electricity through the use of alternating current was more dangerous than using his own direct current. The execution was Edison’s final, desperate act in what became known as the War of the Currents. Edison was the inventor of the direct current, or DC, system, a method to distributing electricity which relied upon a steady voltage, and did not use transformers. Electrical resistance caused voltage losses, requiring noisy generators to be located in towns and near homes. As well, appliances using different voltages required separate cables. Westinghouse’s alternating current could travel long distances at high voltage, before being stepped down to a usable level by a transformer. This system also allowed for many different appliances to use the same power source, and was more costly to maintain. While DC became an early industry standard, the introduction of AC presented Edison with an insurmountable rival. Unable to provide a better service than his competitor, Edison resorted to sly tricks in an attempt to blemish AC’s public image. He campaigned to use the term “Westinghoused” in place of “electrocuted”, while several of his employees created the first electric chair, using Westinghouse’s AC to power the grim machine. The first victim of the chair, William Kemmler, was shocked twice before dying, the second charge burning him and causing extensive bleeding. George Westinghouse was disgusted with the spectacle, and sought to disassociate himself from the violent use of his invention, saying that the executioners “would have done better using an axe.”
Despite the horrific death inflicted by the first electric chair, the public continued to adopt AC. Alternating current was perfectly safe, and required far fewer power stations, located far from population centers. Edison’s aide, Harold Brown, began electrocuting animals using AC, supposedly for science, but never without a cadre of journalists, quick to publicize the horrors wrought by Westinghouse’s creation. This public relations campaign culminated in Topsy’s execution. While the elephant was accused of killing three men, one of them had tried to feed her a lit cigarette, so they likely had it coming. Nevertheless, Topsy was condemned to death. While she was originally set to be hung, the SPCA objected, deeming hanging to cruel for an elephant. Edison was happy to again attempt to convince the public that, despite its many advantages, AC was a dangerous system. After frying for a few seconds, Topsy dropped dead, but the assembled crowd was not convinced. Despite Edison’s perverse chicanery, electricity users preferred the Westinghouse’s AC to Edison’s noisy and difficult to transport DC. The Battle of the Currents was won through the creation of a cheap and reliable service, not cruel media campaigns.
The winner of the current taxi war will likewise be decided by the desires of people who most want this service, just as the War of the Currents was decided by electricity users. Today’s consumers know about the tactics employed by Gett and Uber because of countless newspapers, journals, and websites, all competing with each for readers. The people who care most about the issue are able to express their moral will in an essentially democratic fashion. Consumers base their choices on both the level of service they receive, as well as their perceptions of the market actors. Had more people cared deeply about elephants, as they do today, it is unlikely that Edison, personal amorality aside, would have executed Topsy. There are many faux animal products marketed to exactly these sorts of conscious consumers. In some markets, if the demand is great enough, or the products are diverse enough, many can coexist. In 1903, customers definitively chose Westinghouse over Edison. Edison might have been there first, but his vicious marketing failed to dupe wary consumers into picking his inferior product. It remains to be seen if Uber’s Edisonesque combination of early market presence, cartoonish tactics, and unpopular pricing will suffer the same fate. The consumers will win, old taxi monopolies will lose, and even Travis Kalanick understands market sentiment well enough to refrain from crashing Gett cars into elephants in the process.