low cost carriers

Oct 5, 2017

Does society unwittingly subsidise the likes of Uber or Jetstar?

Please consider this Guardian analysis on the true cost of low fare transport, but keep in mind it might be flawed

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

 

Uncomfortable, for sure. But low cost travel also empowers more wealth and choice

The Guardian is running a well argued and provocative story on how low cost low labor conditions businesses like Uber or Ryanair dump serious cost burdens on society in general, but is the argument it advances totally correct?

The story, on its UK website, relates directly to the well publicised screw ups by the biggest regional UK and EU airline Ryanair that saw massive flight cancellations because, to cut to the chase, it is such a poor employer that it can’t keep enough pilots engaged to fly jets offering an immensely successful and attractive service to consumers.

(And a few other problems as well, all being addressed it seems somewhat late into the day by its management.)

But it’s a story decidedly relevant to Australia, and the US, in particular, and the principles the Guardian report looks at are highly applicable to other ‘disruptive’ or innovative enterprises such as Amazon, or ride sharing companies like Uber.

Saving $$$, and time, through the convenience of on line apps and data driven business models has made changes in retailing, banking, and mobility by almost any mode highly attractive to consumers.

The report says, As consumers, we have been hooked by bargains that come at a cost. Sometimes that cost is directly visible to the passenger: toddlers dragging suitcases through security to save a few quid, increasing the general stress level. Other individual desires – stoked by cheap offers and unrealistic prices of an online flight deal or an Uber – have major impacts on social and physical networks beyond our screens.

It goes on at length. It points us toward an outcome where the actual consumer experience is degraded by discomfort or unintended consequences that drag down the amenity of a society where ‘service’ was measured by something other than cheapest headline price.

But could it be that the arguments it advances lack an important additional consideration. For all of the dislike this writer has for crap service and tiny seats and assorted rip offs, (all shared by thousands of Plane Talking readers) the rise and rise of low cost carriers like Ryanair and Jetstar may have stimulated an invaluable net benefit for society.

This could be argued to have resulted from additional economic activity arising from more affordable mobility that truly increases the wealth and overall amenity of the community. Jetstar is a pain in the shoulders, the hip bones, the kneecaps, and so forth (something even becoming more apparent at times in ‘full service’ options), but it is also a facilitator for independent small or sole business entrepreneurs and those with leisure time to do trips that were previously rare or unaffordable.

The answer to the issues identified by the Guardian writer might not be in rolling back or banning the likes of Uber, or trying the impossible, like attempting to put Ryanair back in its box, but in redefining and driving compliance with commonsense standards for consumer protection, and the capture of appropriate levels of taxation.

(Visited 27 times, 1 visits today)

6 comments

Join the conversation

The Crikey comment section is members-only content. Please login or sign up for a FREE trial to engage in the commentary.

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details

Sending...