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Opinion
Justin Fox

Uber and Lyft Are Adding Jobs, Not Just Stealing Them

Labor department data suggest competition from the upstarts is actually helping the taxi and limousine industry expand.
Still a lotta taxis.

Still a lotta taxis.

Photographer: Timothy A. Clary/AFP/Getty Images

Amid all the gnashing of teeth about the crummy May jobs report, I decided to look into some April jobs numbers. They were released today as well, because the Bureau of Labor Statistics puts out a lot of its industry-level employment data with a one-month delay. The particular industry I was interested in was taxi and limousine services, where employment went from 77,700 in March to 77,600 in April. That April number is likely to be revised next month; the point is that it's basically unchanged. And it hasn't changed much for a while.

For a business that's being disrupted in a big way by the rise of ride-hailing companies Uber and Lyft, this is remarkable. Yes, employment at taxi and limo services declined slightly over the past two years even as overall employment grew -- competition is hurting the incumbents. But it hasn't caused them to collapse, either. At least not yet.

Maybe, I wondered, this evidence from the jobs report could help answer the question of whether Uber and Lyft are mainly replacing existing taxi and limo services or mainly adding to them. This was the core of the Great Uber Valuation Debate of 2014 between New York University finance professor Aswath Damodaran and venture capitalist Bill Gurley. If you looked at Uber as a company displacing an existing industry, as Damodaran did, then its valuation -- $17 billion then, $62.5 billion now -- made no sense. If you looked at it as a company that's effectively creating a new industry, as Gurley did, then maybe the valuation wasn't, and isn't, so crazy.