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The Great Taxi Upheaval
An anonymous reader writes: Uber, Lyft, and a variety of competitors are becoming ubiquitous. Their presence is jarring not because of how different they are from conventional taxis, but simply because they're different at all. Taxis really haven't changed much over the years. Watch a movie from the '90s and you can't help but chuckle at the giant, clunky mobile phones they use. But you can go all the way back to movies from '30s and scenes with taxis won't be unfamiliar. New York Magazine has a series of articles about the taxi revolution currently underway. "So far, Uber appears to be pinching traditional car services—Carmel, Dial 7, and the like—hardest. (They have apps, too, but Uber's is the one you've heard of.) The big question is about the prices for medallions, because so much of the yellow-cab business depends on their future value. ... [I]t's hard to see how those prices won't slip. Medallions, after all, are part of a top-down system formed to fight the abuses and dangers of the old crooked New York: rattletrap cars, overclocked meters, bribed inspectors. Its heavy regulation in turn empowered the taxi lobby and (somewhat) the drivers union. That system may be a pain to deal with, but in its defense, it provided predictability and security. The loosey-goosey libertarian alternative, conceived in the clean Northern California air, calls upon the market to provide checks and balances. A poorly served passenger can, instead of turning to a city agency for recourse, switch allegiances or sue."
What was previously missing from the free market was perfect information. We live in an age where perfect information can be possible. Over regulation is now a hindrance to society.
The loosey-goosey libertarian alternative, conceived in the clean Northern California air, calls upon the market to provide checks and balances. A poorly served passenger can, instead of turning to a city agency for recourse, switch allegiances or sue."
".. and if enough passengers are mugged, killed and thrown in a ditch by a certain company, sooner or later the amazing checks and balances provided by the holy market will surely make sure that customers will not pick such shady business in the future."
In the future, taxis will be combined with ATMs and dispense money.
I thought I was on Cash Cab when I went to New York, but it turned out the driver was just a nosy asshole who liked to ask stupid questions.
When enough consumers have a "bad experience" with anything vaguely taxi-like, there will be demand that anything that looks of feels like a taxi be regulated to ensure minimal levels of safety and service.
Sure, perfect information is out there, but that takes effort. Measure the cost of regulation vs. the cost of determining reputation and you'll find that the populace goes for regulation every time. They want to be able to call anything cab-like and be safe. They want to eat in anything restaurant-like and be safe.
Even if it doesn't significantly increase safety, it doesn't really matter. The feeling of being protected by government regulation increases happiness significantly enough that regulation is pretty much whole-heartedly endorsed by most of the population.
I stopped driving 2 years ago, voluntarily. My SUV cost me around $800 a month in replacement costs. Another $200 in maintenance. I was burning through $12,000 a year in gas. I spent an average of 1000 hours a year in the car, for work, for groceries, for fun. 999 of those hours were spent focused on the road. I hate talking on the phone while driving.
Consider my annual total: about $25,000 + 1000 hours of my time. For the "privilege" to sit in Chicago traffic.
I'm a consultant. I now use UberX every day. I also use public transportation when I'm not in a rush or when someone isn't paying me to swing by.
I spent about $5000 a year on UberX. $100 a week. While I am being driven around, I can respond to emails, make phone calls. I bill for that time. When a customer wants me to visit them, I pass the UberX fee on to them plus 50%. No one scoffs at it. Some customers will realize the cost of me visiting them is more expensive than just consulting over the phone.
I figure I'm $20,000 ahead in vehicle costs, plus I've literally gained another 600-700 hours of phone and email consulting time a year. Call it $40,000 ahead.
I don't take cabs, because they don't like to come to where my HQ is (ghetto neighborhood). UberX comes 24/7, within minutes.
My little sister had an emergency surgery a few months ago. I immediately hired an UberX driver, who took me from the office, to the hospital. He waited. We then took my sister to her apartment to get her cats and clothes, then he took us to the pharmacy. After, he drove us to our dad's house to drop her off, in the suburbs of Chicago. Then he drove me back to work. 3 hours, $90. I can't get a cab to wait even 10 minutes while I drop off a package at UPS. Forget about them taking credit cards.
UberX charges my Paypal account and they're off. If they're busy, they charge a surcharge. I can pick it or take public transportation.
I know why the Chicago Taxi authorities want Uber gone. But a guy like me is their best customer. Next year I'll budget $10,000 a year for UberX, and it will make my life so much more enjoyable and profitable.
Driving yourself around is dead. It's inefficient. Ridesharing is "libertarian" because it is truly freeing.
That system may be a pain to deal with, but in its defense, it provided predictability and security.
Well, I agree about that predictability in the fact that in New York, black patrons would hardly be able to [successfully] hail a taxi after 8 PM. I am sure our black friends are happy about the change in the taxi business that's well underway.
We don't need the government to protect us from getting bad customer service during a car ride. We don't need the government to make sure drivers are "qualified" to give people car rides. It's just a car ride.
The meters on traditional cabs may sometimes be tinkered with, but that's illegal, and in the vast majority of cases they're accurate and legally binding. Whereas with the new wave of rideshare apps there's no indication of what charges you're reacking up until you arrive. You can get an estimate to start with on at least some of the apps but it's not binding, and especially when surge pricing is in effect you can end up with large and unexpected charges that are difficult to predict.
I use Uber and Lyft a lot, and I'm the first to admit that traditional taxis brought this on themselves, by often refusing to take credit cards and by never adopting a convenient method of hailing a cab for the increasing pool of people who use smartphones. But traditional rules around taxis were put in place for a reason, and meters in particular were created and regulated to protect consumers against arbitrary price-gouging.
Here is a 2006 article about the IGT Taxibus concept. It definitely wasn't conceived in Northern California air, but in the UK (circa 2001 IIRC).
The problem was they approached municipalities with the idea and no large cities climbed on board. So now the cities have to face the likes of Uber and Lyft who, I predict, will not collectively reach the scale needed to apreciably reduce traffic congestion (one of the aims of IGT). Combine that with no regulation and a consumer protection model that amounts to Yelp.com, and I'll guess that Uber and Lyft will in 7 years be less of a joke and more of a way to elict negative reactions from people (assuming you momentarily lack the gas to fart).
I don't think there is anything wrong with the idea of regulation.
However, regulation can be turned into a false barrier to entry when the regulatory system becomes a system with its own constituency, such as the labor unions, medallion holders, and bureaucrats. In those cases, where regulation might simply be updated to take into account new technology or ideas, the regulation blocks consideration of new things, and the constituencies have no interest in making any changes because they like their safe and familiar modes of operation.
Not to mention scenarios where members end up investing in regulatory artifacts like medallions, which have value due only to artificial scarcity and then something comes along and makes those less valuable. They're going to want to protect those investments, even if the underlying system they represent is outdated and less efficient.
The real problem isn't regulation, it is the effect that regulation can have, if allowed to harden into a particular structure that does not respond to outside forces adequately.
I was talking with a former cabdriver just the other day, and the major reason he left the field was because of the danger. In his urban taxi career he had eleven "runners", or people who dash without paying, but it was the one robbery that unnerved him to the extent he left the field. Although Phoenix is one of the most gun-friendly cities in the nation, management forbade him to carry, a rule typically enforced by insurance companies who care more about their liability exposure than employee safety.
The great advantage of Uber is that because everyone has to sign up as a member of the system before getting rides, the company knows who the customers are, and who is riding with whom at a given time. The increased driver safety, not any abstract political philosophy, is why services like this will replace traditional cabs.
Over regulation is bad, just as bad as under-regulation.
One problem is that complete anarchy means no protection for anybody which is one reason pure Libertarianism failed (buy insurance from Joe's Pizza Palace) and is why all those classic Western towns you see in John Wayne movies hired sheriffs and were trying to become more civilized.
Over-regulation happens mostly because of regulatory "capture." After the initial public wave of disgust forces a new bureaucracy in place, it becomes beholden to the industry it regulates because no one else really cares to put in the work defining terms and setting up precise rules (precision is another problem in and of itself).
It's a conundrum-type problem, trying to find the sweet spot. You basically need to decide if the over-burden of regulation is going to cost more than what you are preventing. And that's if you're a corporation. If you're a government trying to please the public, you have a mess of moralists who don't care about economics and demand 100% perfection which requires a lot of rules and almost always costs more than accepting 5% graft.
In the taxi market, one trade-off is between having standard prices or having a boatload of vehicles charging different prices all the time. I remember reading about soda pop machines wired to change prices depending on the outside temperature. Seems like slashdotters hated that but I can't see why it's any different from Uber.
If you want a steady price or a steady supply, you need different kinds of regulations than if you want perfect supply for every demand.
Medallions do not exist to regulate or inspect the cabs. That would be achieved by simply licensing them. They exist to limit the number of cabs on the street to reduce empty-cab traffic and overly-aggressive pick-ups.
This is why they're worrisome: there is a fixed number of them issued long ago, and they're transferable and traded like stock, so if their value goes down, "OMG, value is being destroyed, so stop everything." More specifically it's politically hard for the government to change a policy in a way that reduces medallion value since the government gave the medallions value to begin with.
Reading upwards from the confidently-wrong assertion about medallions, where is the content of this post?
seems like just another "Phones! fap fap fap" post.
Its excessive regulation that drove uber to offshore its company to a tax haven right ?, not a single penny will be contributed to your community, and fuck you for thinking that they will
The reason for taxi medallions is to prevent competition, end of story. $1M in NYC, $800K in Chicago, yet DC has none and are DC cab known for being horrible?
Talking to a Chicago cab driver of 28 years, what happened was a Russian bought 80% of all cabs in the city. He talked to the mayor and a year later there was a medallion law in Chicago costing $800k to operate a new cab. Guess what? All existing cabs were grandfathered in and got their medallions free. So anyone who operated a cab on the day that went into effect got $800k for each one. They haven't sold any new ones since then, but now that Russian owns tens of millions in cab medallions, and I'd be willing to bet he donated heavily to help Rham get elected as mayor.
Its a corrupt system, pure and simple. People telling you different are part of the corruption or ignorant.
Without any sort of commercial license to drive other people around, why don't the drivers run afoul of laws that prohibit pickup of hitchhikers?
File under 'M' for 'Manic ranting'
Mod Parent Up
Presumably there is something between rigid regulations that force higher prices and inefficiencies and no regulations at all that degrade safety and foister conflict between buyers and sellers. Note that car accidents and lawsuits are a cost to society in general not just the parties involved. What is happening is that different jurisdictions will adopt a wide spectrum of regulations and hopefully in the fullness of time the best ones will become apparent. Unfortunately those who hold a priori beliefs in the effectiveness of either free markets or government regulations have a tendency to dismiss evidence contrary to their semi-religious beliefs.
Fortunately for us, competition is pretty effective even without perfect information (or perfect substitutes or large number of competitors for that matter). The neoclassical model of perfect competition does little to understand the world, because of its unrealistic assumptions (including that government can fix those supposed problems without being subject to similar ones).
It is true that information is easier to exchange than before, but such aggregation was always possible. That's the whole purpose of brands, reputation, certification and insurance. Licensing (restricting entry) is never necessary to protect consumers.
I don't know much about the history of this specific industry, but the same claims have been made in many industries (lawyers, doctors, plumbers, architects), if not most. The various historical analyses that I read on those cases show that cartelization interests were a stronger factor than consumer protection.
These comments are mine; I do not speak for my employer.
I completely agree with everything you say. My point is that for relatively rare, non-costly (i.e. non-headline grabbing) events, the public will demand regulation, even if the only effect is incumbent protection.
If a bad thing happens, and there is no regulation, then that's negligence in the eyes of the voter. If a bad thing happens and there's regulation that makes sense to the voter (even if it has no effect on safety), then that's simply bad luck.
The "meta" part, is that like a placebo, ineffective regulation, while having a cost, also has a benefit. Simply feeling safer makes people happier, and for relatively rare events, that's going to be the dominant effect almost all the time,
Using an app to find and get into a car with someone you don't know is little more than hitch hiking. And we all know how safe THAT is. Dressing it up in false libertarianism and anti-government paranoia doesn't make it any better or safer. And the 2008 financial crisis should have taught us something about relying on the free market to keep things under control.
how you feel about that hindrance the first time you get hit by an uninsured Uber driver...
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Yes, records of the customers should make drivers safer. That knowledge also works in the other direction:
Last night I got a safety alert message from my university in DC saying that a female student had hailed a cab, and the driver had tried to sexually assault her. She escaped, and the driver took off and has not been found. The only description of the cab was a "silver van".
I've heard lots of worries that with Uber, "you don't know who's driving you" - but that's even more true with a regular cab. If this incident had happened with Uber, there would have been an electronic record of the hail, GPS tracking of the vehicle, etc. Maybe if you happen to get the cab number you can check in with the company to see which driver was operating at the time, but who is going to remember a cab number when they're being assaulted?
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
Obviously with license plate scanners driving a car doesn't solve the anonymity problem. If being anonymous is that important to you, ride a bicycle or use public transit. Even where public transit doesn't directly accept cash, you can almost always purchase the RFID or smart card with cash. There will be a record of your trips, but it won't be linked to you.
FYI, public transit is often the transportation mode of choice for the marginalized.
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
a stupid self-centered Slashdot zombie in a giant city thinks his bizarre and unnatural existence is "the norm". Millions of people live in places where there ARE no cabs and no "mass transit".
"Driving yourself around" is not only NOT dead but it is something free and independent people do every day - we LIKE deciding where we will go, when we will get there, how we will get there, having the freedom to change our plans on-the-fly, control the cargo we travel with, etc.
Your thinking is the sort of thing that leads people to imagine aomethig idiotic like Obamacare is a good idea - the whole thing was setup to be internet-centric and there are people all across the nation who have no high-speed net access. I just love the part where people who had no internet access were supposed to submit e-mail addresses... DOH!
There has to be a middle ground between the super-heavy regulation the taxi industry gets in most cities and the zero regulation that entities like Uber and such are currently subject to.
Bring in regulations that require:
All drivers driving for these companies must pass a background/driving history check (to make sure you dont have criminals driving for these companies or people with too many bad marks against their driving records).
All cars being used must pass a comprehensive safety inspection and roadworthy check before they can be used and then undergo annual inspections after that (to make sure the cars being used are safe and you dont have drivers driving with bald tyres or other faulty kits).
Companies must provide insurance coverage (with the minimum amounts set down in the regulations) for drivers (insurance that is active at all times when the driver is "on the clock" regardless of whether they are taking a passenger, heading to their next pickup or waiting around for a job)
Don't limit the number of cars or drivers.
Don't limit which vehicle models can be used for
Don't try and regulate the prices ride sharing entities can charge or the places they can operate to (including airports). Oh and don't require them to pay more money than anyone else either (e.g. requiring them to pay higher tolls than normal drivers or special surcharges at airports or other locations)
Don't require drivers to have expensive equipment (e.g. government-approved meters) in their cars.
Don't require drivers to have special paint schemes or logos or markings on their cars.
Don't require drivers to have special licenses.
With the companies dropping drivers who get bad reviews and the requirements for background checks to weed out the genuinely bad apples before things start, the risk of bad drivers is low (a driver who was driving erratically or speeding or driving whilst drunk would be quickly identified and given bad reviews/pushed out of the system. Same with a driver who e.g. threatened a passenger or tried to rob them)
If a passenger causes trouble (or worse tries to rob a driver or steal their car or beat them up) the driver can give the passenger a negative review or for more serious cases, report the passenger to the cops (who can find out the passengers details since all passengers are tracked through the ride-share systems)
Lets get this out of the way right now the industry HATES regulations they are constanly complaining about them and finding loopholes and other means to avoid them. The ONLY time they like regulations is when they can use them as a tool to stick it to startups to keep the status quo. Alot of people are citing safety.... using safety and taxi in the same sentence must be a joke right? Do you really think half of these cabs on the road would REALLY pass a state inspection? do you really think they "pass" any of the other inspections they get? Most of the time one vehicle is presented for inspection out of a fleet. Why because the people paid to inspect them are LAZY and its more profitable for them not to inspect them all ;)
"But traditional rules around taxis were put in place for a reason, and meters in particular were created and regulated to protect consumers against arbitrary price-gouging"
What you've forgotten is that (like MANY government regulations) these "reforms" and regulations were to protect the consumer from the previous bad side effects of the earlier government regulations. FIRST, government makes deals and rules to ensure a limited supply of cabs (restricting consumer freedoms and choices to a limited pool of products/services/vendors) and THEN when the favored/licensed/approved vendors do rotten things (like price gouging, taking unneccessarily-long routes, lying about the miles driven, etc) which the consumes (by law) are not permitted to esacpe, the government steps-in with more rules and regulations to "reform" things. Government NEVER willingly admits to the problems IT creates... it always sees these problems as a new opportunity to impose even more control ... which in-turn opens-up more opportunites for corruption through kickbacks, bribes, niche-taxes, "medallions", etc. The guys with the super-expensive monopoly-guaranteeing medallions will kick-in even more money to politicians who promise to suppress these upstart competitors (who are only there because of the bad behavior of the existing monopolies - it's a cycle that benefits the politicians at every turn)
You commie apologists have become cartoons of yourselves.
The soviet system raised several generations of people completely indoctrinated into "from each according to his ability..." i.e. as perfect a communist as it is humanly possible to create and indoctrinate. After 70 years of Marxism, all young soviets had been raised and programmed the way commies claimed it should be done - if that was not good enough to get to "the right people" who were able to "do Communism RIGHT" then it is not possible to "do Communism RIGHT".
The implementation of Communism, in any form, requires criminality and immoral behavior - the state MUST rob people of their property, labor, liberty,etc and given that "the state" has no actual hands it must use human beings to do this... but the only humans willing to do it are evil and corrupt humans so the state must use evil and corrupt humans againsts its citizens. There's no "right" way to do this and no way this poisoned tree can produce good fruit.
There is NO WAY to do evil properly; no way to humanely be inhumane, no way to morally be immoral, no just way to be unjust; THAT is the basic truth you guys can never face.
In Singapore you've been able to order a cab from your phone for years. You get texted the license place of your cab. They show up a few minutes later.
Maybe it is the reverse of prostitution laws - instead of being illegal to pick up strangers if you're getting paid it is illegal if you're not get paying for picking up strangers.
...or rather, the lack of it. Right now, everything I hear about Uber and such is that it's so much cheaper.
Like in security, for example, you don't see where a lot of the money goes - until you have an emergency. Then suddenly, you know what it's for. Of course, the taxi business isn't perfect, and you can easily have a crappy cab driver one day and a great Uber driver the next.
But don't forget that once something is profitable and easy, the scumbags will come in, looking for a quick buck. Once that happens, I guess we'll read different Uber stories.
Assorted stuff I do sometimes: Lemuria.org
And yet another uber driver stands accused of sexually assaulting a woman:
http://valleywag.gawker.com/another-uber-driver-stands-accused-of-sexually-assaulti-1612258968
Of course, ride-sharing is a fraudulent business model. Not only does it not pay for any municipal business permits while operating their supposedly "business taxi dispatch", they also cut corners on local taxes, on commercial insurance (and no, that gap policy that they offer doesn't cover all that needs to be covered), etc. It is a criminal enterprise that creates unfair, unethical and unlawful business environment. If they want to compete - they need to play by the rules and laws, same ones that thousands of small transportation businesses abide by daily.
Why are these alternatives taking hold? Because it can be a better experience as it removes many pain points in trying to get a cab ride. Cab companies need to up their game, not defend the status quo.
Old method: Call a cab company, try to describe where you are, and perhaps the dispatcher will give you some kind of generic guess of how long it will take a cab to get to you. You then stand on the curb for an indeterminate amount of time and look expectantly hoping the cab you order actually comes and spots you and doesn't get stolen by someone else who's also looking for a cab. If you succeed, you take a potentially unknown route and at the end of it hope you have enough cash or that they take credit cards and fork over a tip. If you're calling from the burbs or residence, odds go up on success. If you're leaving a restaurant or club during a peak hours... good luck to you.
New method: Open app, get map of nearby available cars along with fairly accurate arrival estimate, click and summon. They have your GPS coords and info and come specifically for you and noone else and have your number if you don't meet immediately. Take your ride and leave the vehicle with no extra delay fumbling for cash or cards and tips and such. Get email with receipt and route information. Done. Smooth transaction. Smooth experience.
Any other free-market or philosophical arguments or regulatory debates or anecdotal horror stories or hypotheticals are in the end too abstract and distracting to my simple appreciation for an improved experience with less uncertainty. Cab companies have rested on their laurels long enough, if they don't want to modernize, then they can apply for a government bailout or subsidy like everyone else while they cry foul for being outclassed by some upstarts not conforming to their model of operation.
I'm reminded of zipcar/city-car-share which to me essentially removed many pain points to renting a car for short periods of time, but with much less uproar from the big car rental hegemony.