Denton says the car-service app's technology could be applied to much more — and do “more for the world than foreign aid workers in Mozambique”
Gawker mogul Nick Denton says the philosophy behind Uber could ultimately do more for the world than foreign aid workers –if it teaches us to use resources more effectively.
“You could argue that Uber may do more for the planet than foreign aid workers in Mozambique because at some point some version of Uber will allow for more efficient use of resources and a better standard of living,” Denton said in an interview with Playboy.
He was making a broader point that the Internet has helped people in all corners of the world by giving them more access to information about supply and demand, which puts them in better positions to negotiate.
Uber is a car-service app in which passengers and drivers arrange rides online, bypassing taxis. But critics say it encourages price-gouging when rides are scarce.
Interviewer Jeff Bercovici sounded incredulous: “How does a taxi-hailing app help humanity?” he asked.
“It's a great example of surge pricing,” Denton explained. “Any economist would tell you surge pricing is eminently sensible; if you cap prices, you stop a market from working in a way it could work. But it offends people's sense of fairness because surge pricing basically means we are rationing supply of this commodity, transport, at peak times to rich people, people who can afford it. It takes notional inequality and turns it into something concrete–the poor person is waiting in the rain for a taxi that will never come, and the rich person has a black Mercedes come scoop them up. But it's inevitable. It will happen everywhere, in every market.”
Denton's remarks follow Valleywag's widely read criticism of the app. The tech industry blog slammed Uber in a December post, “The Weekend Uber Tried To Rip Everyone Off,” in which it accused the car service of “outrageous profiteering,” saying it was “the most hated company in America” with the “worst price gouging we've ever seen.”
Denton said companies like Ubur and AirBnB are ultimately beneficial because they create markets around underutilized resources — from open passenger seats, to spare bedrooms.
“It's the same thing, a clear economic benefit from underused resources such as empty apartments or drivers who don't have passengers. I like the idea of completely distributed marketplaces. Ultimately we'll see this idea applied to anything that can be quantified, authenticated, verified–whether it's limo service, media, information, retail,” he said.