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Why You Can’t Get a Taxi
April 12, 2012 7:39 PM   Subscribe

Almost all the everyday complaints about cabs trace back to this regulatory cocktail. Drivers won’t take you to the outer reaches of your metropolitan area? The regulated fares won’t let them charge you more to recover the cost of dead-heading back without a return customer. Cabs are poorly maintained? Blame restricted competition, and the inability to charge for better quality. Cabbies drive like maniacs? With high fixed costs for cars and gas, and no way to increase their earnings except by finding another fare, is it any wonder that they try to get from place to place as fast as possible? Uber makes its money at least in part by alleviating these inefficiencies. In most places, “black car” or livery services are regulated differently, and more lightly, than taxis are. Though Uber has good reason not to say so, it’s basically turning livery services into cabs. The company is one step further removed from regulation, because it doesn’t run cars itself; it funnels passengers to existing services. “We’re sort of like an efficient lead-generation system for limo companies,” says Kalanick, “but with math involved.” - Megan McArdle analyses taxi regulation in the US and the taxi startup, Uber
posted by beisny (54 comments total) 7 users marked this as a favorite

 
The part I found most interesting was toward the end, where the company uses grass-roots social media organizing to galvanize its customer base into taking political action on behalf of the company. That is scary, because what it's doing is it's co-opting the populist power of the internet which has recently come into its own as a vehicle to facilitate social and political change, and couples it to the singleminded focus and drive of corporate avarice. It's incredibly slick, and it scares the bejeesus out of me. Welcome to the future, everyone.
posted by Scientist at 8:09 PM on April 12, 2012 [6 favorites]


coupling it to the etc etc. My kingdom for an edit window, I swear these errors don't exist on preview.
posted by Scientist at 8:10 PM on April 12, 2012


That convenience and style is costly; in D.C., the price is usually at least 50 percent more than that of an equivalent cab ride. Uber’s critics frequently imply—perhaps with a grain of truth—that it’s a service for the affluent that takes fares from hardworking taxi drivers who are struggling to make rent. “Uber’s real defenders,” a D.C. blogger has written acidly, “comprise a mix of socialites, transportation fanatics, and libertarians.”

And yet, this analysis misses something important. Yes, Uber has created a higher-priced, higher-class service for people who can afford it—but it has also broadened the market to people who formerly couldn’t get cabs at all. For my husband and me, the appeal of Uber is simple: it’s there. A car that will actually show up to take me to the airport, or to my home, is worth considerably more than a cheaper, but unreliable, alternative.


I am deeply sorry that you, a rich person living in a major metropolitan area, in an ostensibly first world nation, cannot find a way to get to the airport. However, most other developed nations have solved this situation by building efficient, affordable public transportation infrastructure that can be used by all. Once that exists, cabs become far more discretionary spending, and are as such far less in need of regulation

Instead of this compromise - the safety net and the trampoline - you advocate that we simply continue to blindly, frantically remove all traces of collective action, of rules, or any sense of anything but pure self-interest, from our society. In favor of what exactly, Megan? In favor of what?

How about this for a deal. If I can't get to the airport, why the fuck am I supposed to care that you can't get to the airport? How's that for self-interest? Build some fucking trains or shut the fuck up, Megan
posted by crayz at 8:13 PM on April 12, 2012 [28 favorites]


Yes crayz, I agree wholeheartedly in terms of mass transit, but even the international cities with the best mass-transit systems have a need for taxi service, and it should be worthwhile and productive to consider what kind of regulation makes the most sense.

Is the collective action of restricting medallions necessarily the best thing for the drivers or the public? The article argues otherwise :

Many defenders of regulation argue that restrictions are necessary because cabdrivers make so little money as it is. But there’s very little evidence that restricting the number of cabs improves the lot of the people who drive them, rather than the lot of the companies that, by and large, own the licenses. It’s simply too easy for new would-be drivers to show up at a taxi service and compete cabbies’ earnings down—in these days of GPS, you don’t even need to be familiar with the area. So any excess profits from restricting entry tend to accrue not to the drivers, but to the people who own the right to drive. Last October, two New York City taxi medallions sold for $1 million apiece....

The [Uber] drivers are also much better off. For starters, they don’t have to pay kickbacks to dispatchers (seemingly a ubiquitous problem with traditional black-car services). “You need to set it up so that drivers make a lot of money,” Kalanick told me. “Whenever we start in a city, we see mostly traffic from drivers who are using us as a yield-management system—they’re filling up their dead time. Ultimately, that predictable cash flow allows them to expand their business.”
posted by beisny at 8:28 PM on April 12, 2012 [2 favorites]


I am deeply sorry that you, a rich person living in a major metropolitan area, in an ostensibly first world nation, cannot find a way to get to the airport. However, most other developed nations have solved this situation by building efficient, affordable public transportation infrastructure that can be used by all. Once that exists, cabs become far more discretionary spending, and are as such far less in need of regulation

The existence or not of public transportation is a derail of the topic and irrelevant as to the usefulness or stupidity of taxi regulations.
posted by 2N2222 at 8:32 PM on April 12, 2012 [5 favorites]


Many defenders of regulation argue that restrictions are necessary because cabdrivers make so little money as it is. But there’s very little evidence that restricting the number of cabs improves the lot of the people who drive them, rather than the lot of the companies that, by and large, own the licenses.

The problem with this is it tries to squish the entire argument into a tiny frame and then argue within that. Is cab licensing a good idea? Relative to what?

The existence or not of public transportation is a derail of the topic and irrelevant as to the usefulness or stupidity of taxi regulations.

It is not. Go read the comments on the article, where people take the next logical step of suggesting individual, crowd-sourced cab driving. Fine. Great. But first, go visit some place like southeast asia, where it's good that anyone can operate a shitty rubber-stamped rickshaw, because how else would you get around? And it's good that anyone is allowed to sell cheap plastic bottles of questionable water on the street out of a cart, because the tap water will make you sick

Tearing up the regulations because they're too costly only looks good in a myopic, hobbesian world where everyone has already been convinced of the impossibility of true public good and now just wants a race to the bottom so they can get the public ill as cheap as possible
posted by crayz at 8:41 PM on April 12, 2012 [8 favorites]


How about this for a deal. If I can't get to the airport, why the fuck am I supposed to care that you can't get to the airport? How's that for self-interest? Build some fucking trains or shut the fuck up, Megan

That makes no sense. People aren't able to do obviously beneficial things because of truly idiotic and competition-killing government regulation that doesn't even help taxi drivers.

Actual liberals should be shouting at the top of their lungs for this crap to be cut out. Instead because it's government "regulation," however corrupt and braindead, it's perceived as anti-capitalist and therefore progressive. It's laughable and embarrassing.
posted by shivohum at 8:42 PM on April 12, 2012 [8 favorites]


“We’re sort of like an efficient lead-generation system for limo companies,” says Kalanick, “but with math involved.”

Uh, if math is involved, why in God's name is Megan McArdle involved?
posted by joe lisboa at 8:48 PM on April 12, 2012 [8 favorites]


Taxis are public transportation. They enable people whose needs are not always or not wholly met by trains and buses and such to nevertheless continue using public transportation. And yeah, regulating taxi service isn't easy, at least not based on the results around the world.
posted by Authorized User at 8:49 PM on April 12, 2012 [1 favorite]


That makes no sense. People aren't able to do obviously beneficial things because of truly idiotic and competition-killing government regulation that doesn't even help taxi drivers.

What obviously beneficial things? This company is offering a taxi service that uses a loophole to bypass any laws regarding workers rights, environmental impact, taxes, etc that would apply to taxis, and then charges its customers "at least 50 percent more." Who is benefiting from this? Oh yes, rich people - the ones who own Uber and the ones who ride in Uber's expensive, unregulated cabs

Actual liberals should be shouting at the top of their lungs for this crap to be cut out.

Yes, I would be and am. Much of our government seems horrible and inefficient almost to the point of self-referential nihilism, and I would love to replace it with something that makes sense and works. But McArdle is a woman who looks at our society and can see nothing wrong but regulations, and can suggest nothing but indiscriminately tearing it down and replacing it with nothing. It's the worst sort of concern trolling

You want to talk about the topic of, how do people get from point A to point B, trying to balance individual freedom/resource use/cost/safety/universality/blah, fine. Let's. Put everything on the table, and I'm sure we can come up with a better solution than what we've got

"How about we bypass all rules to make a solution priced only for rich people" is not, really, that awesome
posted by crayz at 9:00 PM on April 12, 2012 [13 favorites]


I've taken Uber several times since I moved to Chicago, usually from the far periphery of the city where it's nigh impossible to find a cab. To put this in perspective, I'm very desperate at that point. I'm the kind of person who hates taxis and I've never used them when I can avoid it, mainly because I get nauseated in them for some reason. In NYC I took them a handful of times in the several years I lived there. In Stockholm I used one once, on the last day I lived there when I needed to get all my stuff to the airport. The fact I've used Uber so much in Chicago is a testament to how poor the public transportation is here, but I suppose I shouldn't complain since even Chicago is better than most of the country in that way. Uber is VERY VERY expensive, however, it's cheaper than owning a car. Even with my fancy Uber rides every few weeks, my transportation budget ($100 a month ) is 15% of the average cost of owning a car in the city. As more and more reasonably affluent young people chose to forego cars in a recession, I think services like Uber will be important. I don't see new train lines under construction in the near future.

So yeah, I'd be sad to see Uber gone. And I know rent-seeking is a huge problem in government. So really, I'd like to see the studies that show that regulating cabs makes life better for the average driver or consumer. Particularly when you take into account that more cab availability means less private cars (often driven by drunk people...to be honest I mainly take Uber when I am slightly intoxicated) out on the road.
posted by melissam at 9:01 PM on April 12, 2012 [2 favorites]


Can I ask a dumb question? What is this thing about "finding" a cab? I understand that this is something you do in the middle of Manhattan or San Francisco or downtown Chicago. But most places, you don't find a cab, you call a cab -- right?
posted by escabeche at 9:05 PM on April 12, 2012 [2 favorites]


I would also never hail a cab -- I telephone the dispatcher/ccompany, and never have trouble getting one even going to or coming from the suburbs, since the dispatcher can send them to another fare in the area.
posted by jb at 9:10 PM on April 12, 2012


Actual liberals should be shouting at the top of their lungs for this crap to be cut out.

Yes, I would be and am. Much of our government seems horrible and inefficient almost to the point of self-referential nihilism, and I would love to replace it with something that makes sense and works.


That all depends. Do you believe in Federalism, state's rights, local control, or any of those other vaguely conservative, small Federal government things? Because it occurs to me what's really being complained about here is not big government regulation, but local regulation, and local control.

Under the conservative view--and really, any legal perspective that's consistent with traditional American legal principles--we have no right to tell these local authorities how to run themselves. It's their inherent right to run their taxi markets and their own affairs however they see fit, as long as it's consistent with their own rules and their citizens continue to support them.

The article does a very dishonest job of loosely associating these onerous taxi rules with the New Deal, but in fact, under any interpretation of American law that's existed since day one, New York City authorities have every damn right to run their city however they and their citizens see fit, whether that seems to make business sense to some arrogant start-up that's popular with rich people or not.
posted by saulgoodman at 9:24 PM on April 12, 2012 [1 favorite]


The article does a very dishonest job of loosely associating these onerous taxi rules with the New Deal, but in fact, under any interpretation of American law that's existed since day one, New York City authorities have every damn right to run their city however they and their citizens see fit, whether that seems to make business sense to some arrogant start-up that's popular with rich people or not.

Rights smights. It's a fucking idiot regulatory scheme, whether they have the right to implement it or not. Pure corrupt rent-seeking profiteering. It's obscene.

But yeah, sure, they have the right to implement it.

Are you all right with me saying that?
posted by mr_roboto at 9:33 PM on April 12, 2012 [2 favorites]


But most places, you don't find a cab, you call a cab -- right?

So this confused the fuck out of me recently. Everywhere I've lived, you have to call for a cab. And the smart thing is to to call ahead for a cab — you'd call the taxi company tonight to tell them to come pick you up in the morning if you had a flight tomorrow, let's say.

Apparently in NY you can't do that. Like, the locals who tried to explain this to me made it sound like it basically isn't allowed. If you want to arrange a ride ahead of time, you have to call a car service, which is this whole other not-quite-taxi not-quite-limo thing, and apparently the pricing structure is different too, and I'm still not entirely sure how it all works. (I'm sure someone from NY will be in shortly to tell me that I've got it all wrong, but it was 2 in the morning and my flight was at 7 and everything's a bit fuzzy.)

From a constitutional point of view it makes sense that states and municipalities get to decide for themselves how to handle this stuff. But from the point of view of just trying to be a basically competent adult going about your everyday life, it's weird. Most of the practical details of day-to-day life — things that you might trip over when you visit another country, like "What sort of store do I go to if I want a pack of cigarettes?" or "How do I recognize a speed limit sign?" — are pretty well standardized between one state and the next. Really, the only day-to-day activities for which it matters which state you're in anymore are buying alcohol — and, apparently, getting a taxi.

Ahem. Also, airplane pretzels. What's up with that?
posted by nebulawindphone at 9:44 PM on April 12, 2012 [3 favorites]


The taxi model in New York and San Francisco fucking sucks, anything that destroys that model is over due. If you're for it as it exists currently you either own a medallion or have no idea what you're talking about.
posted by 2bucksplus at 9:54 PM on April 12, 2012 [3 favorites]


Sure, I just want someone to acknowledge that regulations are not all products of government. They crop up wherever people have a right to have a say in how they run their affairs, and no amount of libertarian ideology is going to change that. Hell, even private entities like homeowners associations produce reams of market-complicating regulations. Guess what? That stuff (like this) is part of the reality of the market, not external or alien to it. The sooner libertarians and people in general get a grip on this, the sooner they'll understand why people so often find their arguments out of touch with reality.

You can't ban people from complicating markets by imposing whatever rules they are within their right to impose on them.

From a constitutional point of view it makes sense that states and municipalities get to decide for themselves how to handle this stuff. But from the point of view of just trying to be a basically competent adult going about your everyday life, it's weird.

I found that strange and inconvenient when I was playing a gig with my band in NY too a few years back. But it was another private business interest--the freelance drivers known as "black cars"--that demanded that regulation in the first place. You could always call ahead and hire one of them.

The taxi model in New York and San Francisco fucking sucks, anything that destroys that model is over due. If you're for it as it exists currently you either own a medallion or have no idea what you're talking about.

Doesn't matter, if you believe people have a right to run their own cities. If you don't, then fine. Just declare some new powers for yourself and put an end to it. What can possibly go wrong?
posted by saulgoodman at 10:00 PM on April 12, 2012


I found that strange and inconvenient when I was playing a gig with my band in NY too a few years back. But it was another private business interest--the freelance drivers known as "black cars"--that demanded that regulation in the first place. You could always call ahead and hire one of them.

Right, no, that's what I did.

And I promise, cross my heart and hope to die, I'm not telling this story to promote some sort of libertarian ideology. I'm not against rules. I don't even necessarily think this rule is an inherently bad one. It was just funny to trip over it, was all.
posted by nebulawindphone at 10:05 PM on April 12, 2012


Doesn't matter, if you believe people have a right to run their own cities. If you don't, then fine. Just declare some new powers for yourself and put an end to it. What can possibly go wrong?

Who are these "people" you keep talking about? Since when is this a cogent response to critiques of government policy? Do you also prance into death penalty threads proclaiming "Texas can run its own criminal justice system any way it damn well pleases"?

I love Uber. It's too expensive to use all the time, but great in a pinch. And our public transportation system in SF actually pretty good -- but it cant get me from Dogpatch to North Panhandle in 20 minutes at 1:30 in the morning, and nor should it be able to, really.
posted by eugenen at 10:13 PM on April 12, 2012 [5 favorites]


So my mental picture of this comes from Madison, WI. Here, you call a cab, it reliably comes and gets you in 10 or 15 minutes, the car is in good shape, the driver can drive, they're familiar with your destination, it doesn't cost too much, and everything's just easy. And I thought, well, maybe we don't have such bad regulations here so that competitive pressures have created this happy situation. But no! Apparently Madison is notable for having onerous taxi regulations and is a constant target for libertarian fist-shaking in this respect (as in so many others.) And the funny thing is, I'm largely sympathetic to this kind of argument! I can understand why requiring taxi companies to be open 24/7 keeps out small operators. I'm famliar with the way that incumbent operators maintain their position through regulatory capture. Those things are bad. But I can't deny that taxi service here is really good.
posted by escabeche at 10:34 PM on April 12, 2012 [3 favorites]


The mass of data that Uber collects has generated some surprising insights—Kalanick says, for instance, that by looking at demand on days when the San Francisco Giants play at home, his statisticians can predict wins with a slight edge over the Vegas odds

Am I misreading this, or is Kalanick making an absurd claim here?
posted by escabeche at 10:39 PM on April 12, 2012 [1 favorite]


I don't even necessarily think this rule is an inherently bad one. It was just funny to trip over it, was all.

I know; it was really annoying to me, because there was a big public event going on around the same time we were supposed to be playing the knitting factory. I was terrified we weren't going to make it.

Who are these "people" you keep talking about? Since when is this a cogent response to critiques of government policy

Do you not understand our constitution? Local governments are sovereign in the US, and they're allowed to organize themselves however they see fit. Theoretically, they exist independently of the Federal government rather than deriving any authority from it. They are explicitly allowed to call their own shots except where the constitution provides for the Federal government to step in. You can't just wish away the rights of people living in a community to make up their own rules using whatever mechanisms they've adopted because you think you know better.

It's not government policy in the sense some are characterizing it. It's local municipal policy, which is much more akin to the kind of regulation home owner's associations create than "big government regulation."

Who are these "people" you keep talking about?

The people who are elected to run New York city and who have the sole legal and moral authority to set the rules at the local levels. If you don't believe in the legitimacy of that, your problem isn't with government; it's with the rule of law, period, and the right to self-determination of local communities.

I don't personally have a whole lot of love for Federalism, as I'd prefer the Federal government to have much more expansive power to set national standards and to make law, but the reason things are as complicated they are in this area of law is precisely because of the lack of authority at the level of the Federal government level to override local authority. It's the weakness of government authority that creates these kinds of complex, patchwork regulatory realities. The only way to remedy it, systematically, is to give the federal government more authority, not less. That's a point these kinds of conversations generally miss.
posted by saulgoodman at 10:43 PM on April 12, 2012 [1 favorite]


Yes, Uber has created a higher-priced, higher-class service for people who can afford it—but it has also broadened the market to people who formerly couldn’t get cabs at all. For my husband and me, the appeal of Uber is simple: it’s there. A car that will actually show up to take me to the airport, or to my home, is worth considerably more than a cheaper, but unreliable, alternative.

This is what I don't get. Why can't Megan McArdle get a cab? Yes, maybe if she stands on the corner she won't see a cab. But she also won't see an Uber. If she wants either a cab or an Uber, she has to take out her phone and summon one. And either way, her cab or Uber shows up in 15 minutes and takes her to her destination.
posted by escabeche at 10:47 PM on April 12, 2012 [3 favorites]


Sorry, McArdle's so reliably full of shit that I'm suspicious of her premises.

But, y'know, I generally ride the bus rather than taking a cab, and call cabs ahead, and so have never really had a problem with poor quality. The worse I've got are airport cabbies from Osetia bitching to me about Putin in a way that made me feel like they thought I had some sort of clout in Georgia.
posted by klangklangston at 11:16 PM on April 12, 2012


> And either way, her cab or Uber shows up in 15 minutes and takes her to her destination.

This is absolutely not true in San Francisco - it's extremely hard to get a reliable pickup during peak hours, but with Uber you know exactly where your cab is and when its going to get there.
posted by ygbm at 11:25 PM on April 12, 2012


Doesn't matter, if you believe people have a right to run their own cities. If you don't, then fine. Just declare some new powers for yourself and put an end to it. What can possibly go wrong?

The only way to change local government policy is to seize dictatorial powers? Is this really your argument as to why the taxi regulations in question are good?
posted by Authorized User at 11:40 PM on April 12, 2012 [1 favorite]


Megan McCardle? Really?
posted by bardic at 11:41 PM on April 12, 2012 [2 favorites]


IN Atlanta, when the MARTA system was extended to the airport, the cab drivers demanded protectionism in the form of a steep train fare surcharge. The city told them to eat it.
posted by thelonius at 1:16 AM on April 13, 2012 [2 favorites]


Honestly, I would like to see a regulation that says "Drivers, that GPS you have? It's not just a decoration -- if you don't know how to get somewhere, look it up!" Also, if you are calling a cab from anywhere near a university, you can expect the dispatcher to blow you off at least once. That could stand for some monitoring and regulation, too.
posted by GenjiandProust at 2:47 AM on April 13, 2012


I've noticed in DC that getting a cab via RideCharge/TaxiMagic is superior to all alternatives. I haven't used Uber, and actually I haven't heard of it, but I use RC 2-3 times a week. I think the reason why they are superior to even calling the dispatch number is because they create an external incentive system for them to actually pick you up. I think this sort of transparency is more important to the quality of the cab service than anything else.
posted by feloniousmonk at 3:11 AM on April 13, 2012


Uber is entirely uncontroversial in NYC's regulatory regime and won't cost taxis anything. Medallion taxis are prohibited from anything other than street hails and licensed black cars (which Uber resells) are booked by phone or internet and prohibited from street hails. Taxis are either pervasively available (the airports, Manhattan south of Harlem other than the late afternoon or when its raining) or almost impossible to get (all other times and places). Few people will pay Uber's surcharge when cabs are pervasively available. It's other black car fleet sales channels which Uber threatens, but they've always had to compete.
posted by MattD at 5:31 AM on April 13, 2012


What obviously beneficial things? This company is offering a taxi service that uses a loophole to bypass any laws regarding workers rights, environmental impact, taxes, etc that would apply to taxis, and then charges its customers "at least 50 percent more." Who is benefiting from this? Oh yes, rich people - the ones who own Uber and the ones who ride in Uber's expensive, unregulated cabs

What are you talking about? This is lazy reasoning. What workers' rights do the taxi medallions protect? None. The drivers typically get MORE money from Uber, not less. Did you actually read the article? What environmental impact laws do taxi medallions protect?

Who is benefitting from this? People who otherwise could not get cabs, obviously, and the drivers of those cabs. Who benefit from the laws as they stand now? The companies who own the medallions.

And what, is it a crime now to benefit from having some extra money? That's what you're driving at, right? This is absurd. This is not some billionaire bathing in the blood of poor people. This is just getting a cab.

This is just too anti-capitalist and ridiculous. I hope this kind of thinking is not what the Occupy Wall St people stand for. Yuck.

Let's. Put everything on the table, and I'm sure we can come up with a better solution than what we've got

No. We don't do everything collectively here. The market works for most things. Government is needed for some things. You don't hold the market hostage to inane laws till all 300 million of us can sit at a table and put in what you think is fair.
posted by shivohum at 6:27 AM on April 13, 2012 [4 favorites]


Local governments are sovereign in the US, and they're allowed to organize themselves however they see fit. Theoretically, they exist independently of the Federal government rather than deriving any authority from it. They are explicitly allowed to call their own shots except where the constitution provides for the Federal government to step in.

Unless, of course, you live in Washington DC, which the author does. Personally I think it gives her a skewed view on this topic (and many others), especially since the lack of home rule has encouraged a lot of shitty behavior on the part of the DC government.
posted by zombieflanders at 6:37 AM on April 13, 2012


we have no right to tell these local authorities how to run themselves.

Define "we."
posted by John Cohen at 7:33 AM on April 13, 2012


You don't call a cab in San Francisco. You call one of the 20 cab companies, and wait on hold for 10 minutes, and give the dispatcher your address. Then they put your address out over the radio (or if they're really advanced, the teletype). Then if one of the seven cabs working for the company you called sees your address and happens to be nearby and happens to feel like picking you up, they may drive over and double park in front of your house. And impatiently honk the horn of their leaf-sprung rattletrap that smells of air freshener and stale corn chips. Then they ask for directions to Union Square, because they apparently have never driven in SF before. If you call a cab in San Francisco it may show up in 5 minutes, or in 30, or never. You have no way of knowing.

Uber, by contrast, is lovely. You request a car on the iPhone app and you get immediate confirmation that one will be coming in six minutes. You track its progress on a map on your screen. The car shows up and the driver is polite, the car is clean and comfortable and has a working suspension, and you get to your destination. You also pay 50% extra for the privilege.

I've been in cities with lovely working taxi systems. My home city is not one of them. Uber started in San Francisco because the existing taxi market is entirely broken.
posted by Nelson at 7:46 AM on April 13, 2012 [6 favorites]


What I'm objecting to, BTW, is the lazy, intellectually shallow way this article conflates local authority with "government regulation" more generally, not with the idea there might be legitimate, specific criticisms of how cities like San Francisco or DC choose to regulate themselves.

This isn't about the free market versus big bad government; this is about a company that arrogantly doesn't want to recognize the right of communities to govern themselves as they see fit, and instead of adapting to the realities and needs of the markets it claims to want to serve, wants to capture the local regulatory systems and reform them to put its own business needs ahead of the right of the local population to regulate themselves.

Its one thing to make an honest case for reforming the regulations in some specific area; but to make the argument in this way, by dishonestly and manipulatively casting this as an issue of evil government excess interfering in the markets rather than local populations and authorities setting the rules that govern themselves is offensive and dumb. Markets are made of rules--at a minimum, the rules people make about how contracts will be enforced. At some level, a market really isn't much more than the rules of trade that define it and the commerce that takes place within the context of those rules.

Unless, of course, you live in Washington DC, which the author does. Personally I think it gives her a skewed view on this topic (and many others), especially since the lack of home rule has encouraged a lot of shitty behavior on the part of the DC government.

That's actually a very good point. I guess in the case of DC, there isn't much local control, but that's a unique circumstance, and these issues are not generalizable to "big bad government" versus "free market" in the silly, almost childishly simplistic way the author of this article (and for that matter, too many people with prominent voices in the public sphere these days) argues.

Define "we."

Well, outside parties, I mean. I don't live in DC, NYC or any of the other places that have these rules. I don't know what the reasons are for having them, but I'm not arrogant enough to think I can categorically tell the people living in those place what they need and to impose limits on their rights to demand whatever they want from the people they choose to allow to do business in their communities. And I certainly don't think it's fair to cast this issue as being about out of control government when what it's really about is a company that would prefer to re-make the rules for the market its entering rather than tailoring its business model to the needs and requirements of the market as it already exists.
posted by saulgoodman at 7:53 AM on April 13, 2012 [1 favorite]


And I certainly don't think it's fair to cast this issue as being about out of control government when what it's really about is a company that would prefer to re-make the rules for the market its entering rather than tailoring its business model to the needs and requirements of the market as it already exists.

But it is *precisely* tailoring its business model to the needs and requirements of the market as it already exists! As every single comment in this thread from a resident of an Über city -- as well as the company's success more generally -- attests.
posted by eugenen at 8:10 AM on April 13, 2012


" I hope this kind of thinking is not what the Occupy Wall St people stand for. Yuck."

What the hell are you on about? Surely you can enjoy your free market hardon without having to spooge all over anything that threatens it?
posted by klangklangston at 8:27 AM on April 13, 2012 [1 favorite]


Except you're ignoring that the local rules are part of the requirements of the market, not some alien artifice grafted on top of what would otherwise be the "real market." The local rules of doing business are an essential part of what defines the market, too. You can't just ignore local market preferences as codified in longstanding local rules, trade practices and regulations and claim to be giving the market what you know it really wants. That's reshaping the market to meet your business needs, not being responsive to the market as it actually exists.
posted by saulgoodman at 8:31 AM on April 13, 2012


Wait, is Uber actually breaking any rules? I thought they were finding a legal niche within the current regulatory structure to meet the needs of a certain customer type who is unsatisfied with other offerings within that market? How is that somehow "ignore(ing) local market preferences as codified in longstanding local rules"?
posted by jetsetsc at 8:44 AM on April 13, 2012


Uber in San Francisco is very careful to follow local laws. I mean duh, they're not some outlaw business. So far so good. Things are more complicated in DC, there's been some nastiness.

The larger issue is the taxi rules in most US cities are set up to protect a very small cartel of drivers. They will resist any creative new entrants to their market.
posted by Nelson at 8:48 AM on April 13, 2012 [1 favorite]


In DC, uber has been repeatedly charged with ignoring local DC rules governing their business practices.
posted by saulgoodman at 8:50 AM on April 13, 2012


You can't just ignore local market preferences as codified in longstanding local rules, trade practices and regulations and claim to be giving the market what you know it really wants.

This is a really odd criticism to me. All sorts of regulations are heavily influenced by various lobbies or special interests, at the expense of the general public. This hardly indicates that they aren't anti-market. Lots of regulations and policies almost universally condemned by economists left and right (e.g. rent control, sugar quotas) are enacted in "local rules" that are clearly--and explicitly--designed to thwart the market.
posted by dsfan at 9:03 AM on April 13, 2012


Yes, in DC it's gotten complicated. The actual Washington Post article saulgoodman's article is cribbed from has more information, including "Linton or other commission officials have not responded to the company’s request for more informations on which rules and regulations the service is violating.". Here's Uber's comment on the issue, here's the Taxi commissioner op/ed. This was all in January; I believe Uber is operating in DC right now.

It's not at all clear that specific driver in the January case was violating the law, and it's even much more vague whether Uber acted illegally in that one specific case or if the service in general is in violation of DC taxi code. It is clear that the DC taxi commission is trying to protect the DC taxi drivers from competition. Presumably it will all get sorted out in court eventually.

Not sure why you say "repeatedly charged with ignoring local DC rules"; have there been other legal actions since this one in January? I'm only aware of the one incident, presumably it's a test case.
posted by Nelson at 9:14 AM on April 13, 2012


Also relevant to this discussion, Planet Money: Why Does A Taxi Medallion Cost $1 Million?. The NPR podcast gets into the economics and regulations of the NYC taxi market. It's a particularly good episode, worth a listen.
posted by Nelson at 9:23 AM on April 13, 2012


Saul I think what you're missing is that the medallion system represents the worst kind of privatization and created a cartel of capital holders (medallion owners) that is distinct from workers (taxi drivers). During the Great Depression NYC created 16,900 medallions which could be bought for about $10. These gave holders the right to operate a taxi in the city (before that basically anyone could drive a cab). Over the next 60 years not one additional medallion was created, but many were lost or given up by people leaving the business so by the '90s there were only about 11,000 legal taxis in the city. Since then a few hundred additional medallions were created, but we still don't have as many taxis as we did when the medallion system was create (!), despite have a few million more residents. Also during that time the price of a medallion has gone from $10 to around $1,000,000 and most are owned by corporations that do nothing but rent the right to drive a cab to drivers. Unsurprisingly, the medallion owners spend lots of time and money lobbying local government not to change a thing. Arguing that a historical artifact like an artificial taxi monopoly (that historically actually shrunk as demand grows) should be respected due to "local market preferences" totally ignores the political reality that the yellow taxi lobby wields immense influence and has for decades. Bloomberg had to appeal to the state legislature to make changes, Giuliani was never able to do anything but add a few hundred medallions to the system.
Most New Yorkers see the taxi industry from a passenger’s viewpoint: an immigrant driver and a beat-up Crown Victoria. But behind the scenes, the industry is primarily run by wealthy owners, many from multigeneration dynasties, who control medallions that are worth millions of dollars and that can carry an equivalent degree of political might.

Armed with some of the city’s top white-shoe lobbying, legal and public relations firms, and generous with campaign contributions to Council leaders and to potential mayoral candidates, the taxi industry has long been a formidable presence in the political life of the city.

The administrations of Edward I. Koch and David N. Dinkins tried to increase the number of medallions for yellow cabs, to encourage competition and provide more service for passengers. The industry, helped by influential council members, successfully pushed back, taking advantage of the Council’s oversight of the city’s Taxi and Limousine Commission.

The industry twice sank efforts by the Bloomberg administration to convert the city’s taxi fleet to environmentally friendly hybrids.
New York Times
posted by 2bucksplus at 9:28 AM on April 13, 2012 [6 favorites]


The article does a very dishonest job of loosely associating these onerous taxi rules with the New Deal

Megan McArdle's article? You don't say.
posted by Gelatin at 9:52 AM on April 13, 2012


In Greg Mankiw's introductory economics textbook, one of the very early chapters discusses regulation of taxis as an example. It talks about how if taxis were deregulated, prices would be far lower, since any random Joe with a car could pick up customers. (And, of course, it mentions that there would be obvious safety problems with this.)

I think it's interesting that actual deregulation seems to be going the other way -- these deregulated taxis are a higher-cost, higher-class service than the taxi market that was created by regulation.
posted by miyabo at 11:45 AM on April 13, 2012


Does Greg Mankiw also talk about how taxis will be dirtier, less safe and drivers less accountable? Because there is a reason that most people will only get into a licensed cab.

That said, I hate the medallion system (which is also used in Toronto). It's taxi-serfdom. Taxi drivers should be specially regulated, but they shouldn't have to then pay someone else for the right to work, not when (inevitably) they are the ones providing the vehicle, fuel and all maintenance. Medallion owners are just leeches.
posted by jb at 1:27 PM on April 13, 2012 [1 favorite]


There's a place less than an hour away from McArdle that has this deregulated/unregulated taxicab system that she seems to be pining for: Baltimore. Except if you were to phrase it in a way that clearly compared the two, absolutely no one would go for it. I guess Eastern Europe also has a fairly lax taxicab oversight model but for some reason no one wants to emulate their model either.
posted by Challahtronix at 2:14 PM on April 13, 2012


I think it's interesting that actual deregulation seems to be going the other way -- these deregulated taxis are a higher-cost, higher-class service than the taxi market that was created by regulation.

Two reasons we're not seeing that here.

(1) The regulations on the taxi market include an upper limit on the price that drivers can charge. The regulations aren't just limiting competition — they're also artificially depressing prices. So that means it's not hugely surprising that the "unregulated" side of the market costs more.

(2) The "unregulated" limo market is still not actually unregulated. For instance, limo drivers can't pick up passengers at the curbside. They have to work through a middleman like Uber — which raises the price. And since they can't cruise around looking for passengers, if nobody is calling in to Uber, they have to just sit idle. That also raises the price — more downtime for the drivers means they have to charge more when they are working in order to come out ahead.
posted by nebulawindphone at 4:34 PM on April 13, 2012


Basically, Uber is not actually giving us a "deregulated" taxi system. It's giving us a two-tier system of regulations. "Discount cabs" (a.k.a. normal yellow taxis) play by one set of rules which result in low prices but limited availability. "Premium cabs" (a.k.a. limos) play by another set of rules which result in higher prices but increased availability.
posted by nebulawindphone at 4:38 PM on April 13, 2012


Ah, the libertarian's folly: where incompetent regulation somehow defacto means that no regulation would be better.
posted by gjc at 8:36 PM on April 13, 2012 [1 favorite]


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