Taxi Medallion Boom May Be Coming to an End
July 9, 2014 1:18 AM Subscribe
Until recently, taxi medallions have been a lucrative and secure investment in the U.S., increasing 500-700% since 2000, and 1000% since 1980. The taxi medallions are big business, with many single-medallion owner operators, but most medallions are concentrated in a small number of hands. In Chicago, the majority of its 6800 taxi medallions are owned by less than 200 entities. In Boston, 49% of all medallions are owned by just 51 entities.
Lease fees [payable by drivers to medallion owners for driving the cab] in Chicago can run up to $707 per week, but getting enough passengers is a gamble for the driver; in San Francisco, for example, it’s estimated that traditional cabs drive 50% of all miles empty. But the drivers still have to pay the lease fees. “The threat to medallion owners isn’t that they’ll lose passengers to [ride-sharing services.] It’s that they’ll lose drivers.” Drivers have been leaving traditional cab companies in, ahem, droves. Why? No lease fees, more scheduling flexibility, and a much higher occupancy rate. Which leads to lower rents for medallion owners, reducing the value of the medallions themselves.
Chicago’s most recent medallion auction is shrouded in silence, leading many to speculate the Chicago medallion market has plummeted. NYC medallion prices, too, appear to have stalled, after decades of appreciation.
In other cities, medallion owners are betting that upscale patrons will not want to use ridesharing services, and the price of medallions has skyrocketed. Or perhaps medallion money, an industry served by a network of financiers, brokers, and leasing companies, is flowing into cities with rideshare restrictions.
Medallion owners are fighting; in February, they sued the city of Chicago for allowing ridesharing services to operate outside of existing regulations, thereby reducing the value of their medallions. There is, however, evidence that taxis themselves operate outside of regulations without penalty by refusing to go to minority neighborhoods, and refusing fares that are too short or too long.
Lease fees [payable by drivers to medallion owners for driving the cab] in Chicago can run up to $707 per week, but getting enough passengers is a gamble for the driver; in San Francisco, for example, it’s estimated that traditional cabs drive 50% of all miles empty. But the drivers still have to pay the lease fees. “The threat to medallion owners isn’t that they’ll lose passengers to [ride-sharing services.] It’s that they’ll lose drivers.” Drivers have been leaving traditional cab companies in, ahem, droves. Why? No lease fees, more scheduling flexibility, and a much higher occupancy rate. Which leads to lower rents for medallion owners, reducing the value of the medallions themselves.
Chicago’s most recent medallion auction is shrouded in silence, leading many to speculate the Chicago medallion market has plummeted. NYC medallion prices, too, appear to have stalled, after decades of appreciation.
In other cities, medallion owners are betting that upscale patrons will not want to use ridesharing services, and the price of medallions has skyrocketed. Or perhaps medallion money, an industry served by a network of financiers, brokers, and leasing companies, is flowing into cities with rideshare restrictions.
Medallion owners are fighting; in February, they sued the city of Chicago for allowing ridesharing services to operate outside of existing regulations, thereby reducing the value of their medallions. There is, however, evidence that taxis themselves operate outside of regulations without penalty by refusing to go to minority neighborhoods, and refusing fares that are too short or too long.
Increase by 1000% since 1980 is a return of 7% per annum. That's a good return, but it's not spectacular. You would have had a capital accumulative return of 8% by investing in the S&P 500, and you would have had thirty-four years' worth of dividends in addition to that.
posted by Joe in Australia at 1:51 AM on July 9, 2014 [3 favorites]
posted by Joe in Australia at 1:51 AM on July 9, 2014 [3 favorites]
True, Joe, but medallion owners have had thirty-four years of weekly lease-fees.
posted by anotherpanacea at 2:33 AM on July 9, 2014 [7 favorites]
posted by anotherpanacea at 2:33 AM on July 9, 2014 [7 favorites]
In Boston, 49% of all medallions are owned by just 51 entities.
Is this bad? It seems like it would be enough to keep the market functioning. I can't see a link which explains the problem specific to this bit of info.
posted by biffa at 3:10 AM on July 9, 2014
Is this bad? It seems like it would be enough to keep the market functioning. I can't see a link which explains the problem specific to this bit of info.
posted by biffa at 3:10 AM on July 9, 2014
Why should medallions go up in value? Why should the supply be artificially limited to make this happen?
Just issue a medallion to anyone who meets the insurance and registration requirements.
posted by dave99 at 3:17 AM on July 9, 2014 [6 favorites]
Just issue a medallion to anyone who meets the insurance and registration requirements.
posted by dave99 at 3:17 AM on July 9, 2014 [6 favorites]
Sounds like a capitalist pyramid scheme. What's the point? Who benefits from the medallion market besides medallion investors?
posted by oceanjesse at 3:25 AM on July 9, 2014 [6 favorites]
posted by oceanjesse at 3:25 AM on July 9, 2014 [6 favorites]
Let's deregulate the taxi industry. Hell, it had such amazing results for the airline industry, right?
posted by Pope Guilty at 3:31 AM on July 9, 2014
posted by Pope Guilty at 3:31 AM on July 9, 2014
After all the Uber protests, great to see such a timely and fascinating topic posted. Thanks!
posted by infini at 3:37 AM on July 9, 2014 [2 favorites]
posted by infini at 3:37 AM on July 9, 2014 [2 favorites]
The airline industry is characterised by huge fixed costs (planes, airports, training) which limits competition.
The taxi business is exactly the opposite - anyone with a car, some insurance and some training can do it. Only the medallion system prevents it.
posted by dave99 at 3:38 AM on July 9, 2014 [6 favorites]
The taxi business is exactly the opposite - anyone with a car, some insurance and some training can do it. Only the medallion system prevents it.
posted by dave99 at 3:38 AM on July 9, 2014 [6 favorites]
Why don't we just let a single private company funded by VCs run the car hire business in every city instead? That's much more fair, and also Fwee Mawket.
posted by Potomac Avenue at 3:38 AM on July 9, 2014 [6 favorites]
posted by Potomac Avenue at 3:38 AM on July 9, 2014 [6 favorites]
"Who benefits from the medallion market besides medallion investors?"
Well, here in the NO the taxicab bureau are notorious for shakedowns.
posted by vapidave at 3:41 AM on July 9, 2014
Well, here in the NO the taxicab bureau are notorious for shakedowns.
Blake is the second taxicab investigator in the past six months to be charged with assaulting someone while on the job. Wilton Joiner was arrested on charges of simple battery in November, accused of assaulting tour guide Wendy Bosma.So, them.
posted by vapidave at 3:41 AM on July 9, 2014
Hey, maybe the medallion system is actually working really well. It should be extended to other professions. You want a job as a cook? Pay $100 a day to the corporation which owns the right to cooking in your city. Then make it up in tips-- better hustle!
Minimum wage? What's that?
posted by alexei at 3:58 AM on July 9, 2014 [20 favorites]
Minimum wage? What's that?
posted by alexei at 3:58 AM on July 9, 2014 [20 favorites]
Driving a cab is pretty much a fixed cost business as well. But it's easier for capacity to exit. The airline industry is fiercely competitive. I have no idea how anyone could say it isn't.
And yeah actually deregulation of the airline industry is actually a tremendous success story if the goal was lower prices.
Id be more concerned about Uber and lyft being able to eventually exert market power.
posted by JPD at 4:00 AM on July 9, 2014 [5 favorites]
And yeah actually deregulation of the airline industry is actually a tremendous success story if the goal was lower prices.
Id be more concerned about Uber and lyft being able to eventually exert market power.
posted by JPD at 4:00 AM on July 9, 2014 [5 favorites]
Hell, it had such amazing results for the airline industry, right?
Well.....yeah. Unless you're a gazillionnaire insulted that the riff raff can fly nowadays, I suppose.
posted by jpe at 4:09 AM on July 9, 2014 [13 favorites]
Well.....yeah. Unless you're a gazillionnaire insulted that the riff raff can fly nowadays, I suppose.
posted by jpe at 4:09 AM on July 9, 2014 [13 favorites]
This is why it's possible to simultaneously dislike services like Airbnb that are designed to help people enter regulated but (generally) competitive markets while avoiding the regulation and externalising their costs, and not really mind services like Uber that undermine horrible dysregulated artificial monopolies. All around the world taxi regulations are designed to serve the interests of permit-holders first, drivers second and passengers distant last. The solution is better regulation, of course, but failing that (and the rent-seekers will always do their best to make sure it fails) a transitional period of open slather looks like the least worst alternative.
posted by A Thousand Baited Hooks at 4:09 AM on July 9, 2014 [11 favorites]
posted by A Thousand Baited Hooks at 4:09 AM on July 9, 2014 [11 favorites]
I thought the whole thing Uber/Lyft were exploiting were the medallion investing schemes. Maybe these plummeting medallion prices are excatly what's needed to drive some of trhe rentiers out of the taxi industry and allow more owner operators to make money by, you know, driving people around instead of banging a bunch of drivers an exorbinant lease fee each week. I'm willing to bet that you could make a nice middle class living owning 1-2 cars and operating as a small taxi company (10-12 drivers at most) instead of trying to be millionaire and operating a fleet.
posted by KingEdRa at 4:12 AM on July 9, 2014 [4 favorites]
posted by KingEdRa at 4:12 AM on July 9, 2014 [4 favorites]
I'd have a lot more sympathy for the existing taxi companies if they'd been doing their job for all these years instead of just servicing the easiest and most profitable routes and ignoring everything else. What good is a taxi service that won't show up on time (or at all) and refuses to go to neighborhoods? Our Yellow Cabs want to run between downtown hotels and the airport and nothing else.
The fact that you can now go out somewhere in the city and be able to rely on a cab service to get you home is a huge win.
posted by octothorpe at 4:34 AM on July 9, 2014 [8 favorites]
The fact that you can now go out somewhere in the city and be able to rely on a cab service to get you home is a huge win.
posted by octothorpe at 4:34 AM on July 9, 2014 [8 favorites]
I don't understand why people think that Uber is hurting drivers. There's plenty of work available for drivers, even if the whole cab system crashes and burns.
posted by empath at 4:34 AM on July 9, 2014 [1 favorite]
posted by empath at 4:34 AM on July 9, 2014 [1 favorite]
In Boston, 49% of all medallions are owned by just 51 entities.
And it's basically a criminal enterprise. The Globe's spotlight team did a multi-part series on this last year.
posted by grounded at 4:42 AM on July 9, 2014 [3 favorites]
And it's basically a criminal enterprise. The Globe's spotlight team did a multi-part series on this last year.
posted by grounded at 4:42 AM on July 9, 2014 [3 favorites]
I have a friend who used to work for the city in Chicago's Taxi court. The case for a taxi system like this is that the city gets to regulate the taxis. If you're blind, and a taxi refuses to serve you because you've got a guide dog, you can sue that driver. Not so much with Uber*. Similarly, if you're a driver, and drunk idiot throws up in your cab, you can make a complaint, and get damages from the drunk idiot. Both of these scenarios happen all the time.
To paraphrase dave99, any racist with a car,some insurance and Uber can refuse you service. The medallion system prevents discourages it.
I am not unsympathetic to the idea that licenses make an artificial monopoly, and restrict choice and innovation, but there's also a guarantee that the licensed business will follow the law, and provide equal access to anybody.
* Yes, there's some kind of karma system with these. That's not a guarantee of equal access.
posted by wormwood23 at 4:52 AM on July 9, 2014 [4 favorites]
To paraphrase dave99, any racist with a car,
I am not unsympathetic to the idea that licenses make an artificial monopoly, and restrict choice and innovation, but there's also a guarantee that the licensed business will follow the law, and provide equal access to anybody.
* Yes, there's some kind of karma system with these. That's not a guarantee of equal access.
posted by wormwood23 at 4:52 AM on July 9, 2014 [4 favorites]
To paraphrase dave99, any racist with a car, some insurance and Uber can refuse you service. The medallion system prevents discourages it.
As I have posted before, Uber and the cost of racism. "However, most analysis of Uber’s costs and benefits leave out one huge piece of the appeal: the premium car service removes the racism factor when you need a ride."
posted by jeather at 4:58 AM on July 9, 2014 [4 favorites]
As I have posted before, Uber and the cost of racism. "However, most analysis of Uber’s costs and benefits leave out one huge piece of the appeal: the premium car service removes the racism factor when you need a ride."
posted by jeather at 4:58 AM on July 9, 2014 [4 favorites]
but there's also a guarantee that the licensed business will follow the law, and provide equal access to anybody.
I still don't really understand how the fact that taxi services may be being effectively regulated in some small pockets of the world means anything for everywhere else, where they aren't.
posted by A Thousand Baited Hooks at 5:10 AM on July 9, 2014
I still don't really understand how the fact that taxi services may be being effectively regulated in some small pockets of the world means anything for everywhere else, where they aren't.
posted by A Thousand Baited Hooks at 5:10 AM on July 9, 2014
The solution to "hey, these regulations aren't being consistently or effectively enforced" is not "oh, well then, let's just replace them with private industry promising they'll be better". It's amazing to watch nominally liberal/lefty types go all Reagan on this topic. Does the current system work? It certainly doesn't sound like it. Is the solution private firms that snub their nose at the law and insist that they are not subject to regulation? Is it fuck.
"ten degrees to the left of center in good times, ten degrees to the right of center if it affects them personally"
posted by Pope Guilty at 5:17 AM on July 9, 2014 [22 favorites]
"ten degrees to the left of center in good times, ten degrees to the right of center if it affects them personally"
posted by Pope Guilty at 5:17 AM on July 9, 2014 [22 favorites]
medallion owners are betting that upscale patrons will not want to use ridesharing services
I would have thought upscale people are exactly who are driving this shift. I've only ridden in uber twice I think, but both times was in groups of upper middle class people and über was chosen not because it was cheaper (it wasn't, at all) but because of the better service and comfort.
These services need to be compliant with ADA and not mimic traditional taxi services' racism, but otherwise I can only see good to breaking taxi monopolies.
posted by Dip Flash at 5:25 AM on July 9, 2014
I would have thought upscale people are exactly who are driving this shift. I've only ridden in uber twice I think, but both times was in groups of upper middle class people and über was chosen not because it was cheaper (it wasn't, at all) but because of the better service and comfort.
These services need to be compliant with ADA and not mimic traditional taxi services' racism, but otherwise I can only see good to breaking taxi monopolies.
posted by Dip Flash at 5:25 AM on July 9, 2014
Fast forward 20 years - companies like Uber are likely to become subsidiaries of Google or the like, with taxi services dispensing with the driver and instead being autonomous vehicles in major markets. Once the self-driving technology is deemed safe enough (and doesn't randomly shut down during proof of concept demonstrations), coupled with mapping technology and an auto platform, users will likely welcome autonomous vehicles. This will again consolidate the taxi market to those companies with resources to implement driverless systems, with some quaint human-driven alternatives floating about, regulated or unregulated.
Either way, independent drivers working for companies like Uber are probably a stop-gap in a larger, longer term strategy. Same goes for cabbies. It's a volatile market on many levels.
Taxi services got caught with their pants down. Bad service, old vehicles, cabbies that can't find their way anywhere (and often language issues are also a real problem for recently immigrated drivers), late or no-pickups, and high prices/untrustworthy drivers expecting high tips...all of it without apps, real time tracking, or anything offered by the alternatives. Taxis could have owned the new market, but they got lazy. Medallion value is a reflection of the market saying they just don't see the value in licensed cabs.
It seems to me that modest regulation is warranted, but protectionism for cabbies is just not going to work in today's atmosphere.
posted by Muddler at 5:35 AM on July 9, 2014 [7 favorites]
Either way, independent drivers working for companies like Uber are probably a stop-gap in a larger, longer term strategy. Same goes for cabbies. It's a volatile market on many levels.
Taxi services got caught with their pants down. Bad service, old vehicles, cabbies that can't find their way anywhere (and often language issues are also a real problem for recently immigrated drivers), late or no-pickups, and high prices/untrustworthy drivers expecting high tips...all of it without apps, real time tracking, or anything offered by the alternatives. Taxis could have owned the new market, but they got lazy. Medallion value is a reflection of the market saying they just don't see the value in licensed cabs.
It seems to me that modest regulation is warranted, but protectionism for cabbies is just not going to work in today's atmosphere.
posted by Muddler at 5:35 AM on July 9, 2014 [7 favorites]
I think that longer term Uber doesn't really change anything for drivers - it'll be still be the same dynamic of people bidding labor at the lowest price it makes sense for them to go to work.
It destroys medallion holders (world's tiniest violin), and is probably a net benefit to consumers while reaping really big rewards to Uber.
The difference between Uber and AirBnB to me is that Uber is an end around of a regulatory system that doesn't really make sense to me. Not the existence of medallions but rather their limited number. I think the original thought was that the limit helped labor, but as we've seen - the benefits from that accrue to capital. Much less problematic is something like "the knowledge" as a barrier to entry.
AirBnB on the other hand is essentially an end run around guest taxes and health and safety regs.
posted by JPD at 5:48 AM on July 9, 2014 [3 favorites]
It destroys medallion holders (world's tiniest violin), and is probably a net benefit to consumers while reaping really big rewards to Uber.
The difference between Uber and AirBnB to me is that Uber is an end around of a regulatory system that doesn't really make sense to me. Not the existence of medallions but rather their limited number. I think the original thought was that the limit helped labor, but as we've seen - the benefits from that accrue to capital. Much less problematic is something like "the knowledge" as a barrier to entry.
AirBnB on the other hand is essentially an end run around guest taxes and health and safety regs.
posted by JPD at 5:48 AM on July 9, 2014 [3 favorites]
The solution to "hey, these regulations aren't being consistently or effectively enforced" is not "oh, well then, let's just replace them with private industry promising they'll be better". It's amazing to watch nominally liberal/lefty types go all Reagan on this topic.
One of the bigger shifts on the Left in recent years is an increased focus on results rather than methods. Or, to put it another way: There's less stressing about "Free Market" vs "Regulation" and more focus on Getting Shit Done. That's how you end up with, say, left-wing supporters for less-restrictive construction permitting regimes in cities to avoid anti-density NIMBYism or, yes, opposition to random bullshit regulation that doesn't appear to be working. I'm far from the only young lefty who doesn't have any particular fondness for "regulation" per se and is happy to use market solutions if they actually make things better.
Taxis are a very highly regulated market that absolutely sucks as a consumer. It's not unreasonable to conclude that the regulations are contributing to the problem.
posted by Tomorrowful at 5:49 AM on July 9, 2014 [18 favorites]
One of the bigger shifts on the Left in recent years is an increased focus on results rather than methods. Or, to put it another way: There's less stressing about "Free Market" vs "Regulation" and more focus on Getting Shit Done. That's how you end up with, say, left-wing supporters for less-restrictive construction permitting regimes in cities to avoid anti-density NIMBYism or, yes, opposition to random bullshit regulation that doesn't appear to be working. I'm far from the only young lefty who doesn't have any particular fondness for "regulation" per se and is happy to use market solutions if they actually make things better.
Taxis are a very highly regulated market that absolutely sucks as a consumer. It's not unreasonable to conclude that the regulations are contributing to the problem.
posted by Tomorrowful at 5:49 AM on July 9, 2014 [18 favorites]
The solution that I'd like to see is an annual or biannual auction for all medallions. That would prevent accumulation of medallions into just a few hands, lower prices so that you could have more owner-operators, and generate a recurring income stream for city governments.
It will never, ever happen.
posted by thecaddy at 5:51 AM on July 9, 2014 [2 favorites]
It will never, ever happen.
posted by thecaddy at 5:51 AM on July 9, 2014 [2 favorites]
Bad service, old vehicles, cabbies that can't find their way anywhere (and often language issues are also a real problem for recently immigrated drivers), late or no-pickups, and high prices/untrustworthy drivers expecting high tips
It's the bad service aspect that is driving this move. Taxis can reclaim all this list ground if they just offered better, safer service. That includes driving recklessly whilst talking on your mobile despite being asked to focus on the road, which had happened more times than I care to remember.
posted by arcticseal at 5:52 AM on July 9, 2014 [1 favorite]
It's the bad service aspect that is driving this move. Taxis can reclaim all this list ground if they just offered better, safer service. That includes driving recklessly whilst talking on your mobile despite being asked to focus on the road, which had happened more times than I care to remember.
posted by arcticseal at 5:52 AM on July 9, 2014 [1 favorite]
It's hard for me to feel much sympathy for the medallion owners, but it's much harder for me to trust a private corporation to enforce rules and regulations.
Those thinking that Uber/Lyft drivers don't already have codes they can put into the user field to warn their buddies that you're not white are living in a dream world. You do know that not only do you get to make comments about the driver, they get to make comments about you that other drivers can see -- and you can't?
Those thinking that they aren't redlining neighborhoods are living in the same dream world.
posted by eriko at 5:53 AM on July 9, 2014 [8 favorites]
Those thinking that Uber/Lyft drivers don't already have codes they can put into the user field to warn their buddies that you're not white are living in a dream world. You do know that not only do you get to make comments about the driver, they get to make comments about you that other drivers can see -- and you can't?
Those thinking that they aren't redlining neighborhoods are living in the same dream world.
posted by eriko at 5:53 AM on July 9, 2014 [8 favorites]
I think there will need to be regulation of Uber/Lyft etc, which I think will happen once the taxis get their heads out of their asses and provide the services that Uber provides (which they don't, not in all markets) and stop having racism problems (which is not worse with Uber, even if it isn't that much better) -- many of the consumer-protecting regulations are ignored, currently, anyways.
I think that this kind of disruption will lead back to regulations which are followed, because we'll get a glut of people offering crappy rides, and new, more sensible regulations will come back. But I might be wrong. So how do you think we're going to get to better regulations from the status quo? I can't think of how, but I am often blind to solutions.
posted by jeather at 5:54 AM on July 9, 2014 [2 favorites]
I think that this kind of disruption will lead back to regulations which are followed, because we'll get a glut of people offering crappy rides, and new, more sensible regulations will come back. But I might be wrong. So how do you think we're going to get to better regulations from the status quo? I can't think of how, but I am often blind to solutions.
posted by jeather at 5:54 AM on July 9, 2014 [2 favorites]
Sounds like a perfect rent seeking set up to me.
We could resolve the problem by making licensing open to all who want a license rather than selling medallions to rent seekers. But the rent seekers have enough money to buy politicians to keep the licensing closed.
posted by sotonohito at 5:54 AM on July 9, 2014
We could resolve the problem by making licensing open to all who want a license rather than selling medallions to rent seekers. But the rent seekers have enough money to buy politicians to keep the licensing closed.
posted by sotonohito at 5:54 AM on July 9, 2014
thereby reducing the value of their medallions.
So, basically "interference with a business model" in other words?
posted by Old'n'Busted at 6:00 AM on July 9, 2014 [1 favorite]
So, basically "interference with a business model" in other words?
posted by Old'n'Busted at 6:00 AM on July 9, 2014 [1 favorite]
BTW - there is a non-trivial argument that issuing more medallions wouldn't reduce their price up until you got to a point where taxi utilization declined such that renter-drivers would demand a lower price.
At least as long as you have price controls as well.
posted by JPD at 6:01 AM on July 9, 2014
At least as long as you have price controls as well.
posted by JPD at 6:01 AM on July 9, 2014
So, basically "interference with a business model" in other words?
Yes. And?
posted by JPD at 6:02 AM on July 9, 2014 [2 favorites]
Yes. And?
posted by JPD at 6:02 AM on July 9, 2014 [2 favorites]
Those thinking that Uber/Lyft drivers don't already have codes they can put into the user field to warn their buddies that you're not white are living in a dream world. You do know that not only do you get to make comments about the driver, they get to make comments about you that other drivers can see -- and you can't?
Those thinking that they aren't redlining neighborhoods are living in the same dream world.
If they're using the Uber app to do it, it'll be discoverable in the inevitable lawsuit, but I highly doubt they're doing that.
posted by empath at 6:05 AM on July 9, 2014 [1 favorite]
Those thinking that they aren't redlining neighborhoods are living in the same dream world.
If they're using the Uber app to do it, it'll be discoverable in the inevitable lawsuit, but I highly doubt they're doing that.
posted by empath at 6:05 AM on July 9, 2014 [1 favorite]
It's the bad service aspect that is driving this move. Taxis can reclaim all this list ground if they just offered better, safer service.
I think it's more the lack of service, which is directly driven by the medallion system keeping the taxi numbers down.
posted by smackfu at 6:10 AM on July 9, 2014 [1 favorite]
I think it's more the lack of service, which is directly driven by the medallion system keeping the taxi numbers down.
posted by smackfu at 6:10 AM on July 9, 2014 [1 favorite]
the problem with the medallion system is that municipal government in the US is, for the most part, corrupt. no system is going to work.
posted by ennui.bz at 6:11 AM on July 9, 2014
posted by ennui.bz at 6:11 AM on July 9, 2014
> In Boston, 49% of all medallions are owned by just 51 entities.
Is this bad? It seems like it would be enough to keep the market functioning. I can't see a link which explains the problem specific to this bit of info.
I'd like to see some documentation as well — if only because I suspect it's that specific kind of fiction that pretends "Boston" as a functional city is within Boston City limits.
That is, US Office of Management and Budget say the city is 4,640,802* people, but 645,966 live in the City of Boston. I'd bet a real American dollar that whoever came up with the "49% of all medallions are owned by just 51 entities" number picked a number that represents 14% of the city in total. The tendency to do this is not helped by the fact that those 4.6M people are literally in hundreds of taxi licensing jurisdictions.
Sometimes this is legitimate error, misconception, or just plain laziness, but a lot of the time it seems to be a method of crafting the data to tell the story you want to tell. I'd like to see the data in detail.
* While I concede OMB's number is more than just the truly continuous urban area, their number is a lot more realistic, and people don't tend to be in the emptier bits, so I'm going to run with it.
posted by atbash at 6:19 AM on July 9, 2014
Is this bad? It seems like it would be enough to keep the market functioning. I can't see a link which explains the problem specific to this bit of info.
I'd like to see some documentation as well — if only because I suspect it's that specific kind of fiction that pretends "Boston" as a functional city is within Boston City limits.
That is, US Office of Management and Budget say the city is 4,640,802* people, but 645,966 live in the City of Boston. I'd bet a real American dollar that whoever came up with the "49% of all medallions are owned by just 51 entities" number picked a number that represents 14% of the city in total. The tendency to do this is not helped by the fact that those 4.6M people are literally in hundreds of taxi licensing jurisdictions.
Sometimes this is legitimate error, misconception, or just plain laziness, but a lot of the time it seems to be a method of crafting the data to tell the story you want to tell. I'd like to see the data in detail.
* While I concede OMB's number is more than just the truly continuous urban area, their number is a lot more realistic, and people don't tend to be in the emptier bits, so I'm going to run with it.
posted by atbash at 6:19 AM on July 9, 2014
It's the bad service aspect that is driving this move. Taxis can reclaim all this list ground if they just offered better, safer service.
But the way that they're structured, they can't. Since they don't actually employ the drivers, the cab companies have very little control over what they do with the cabs. They send out the message that someone wants a ride but they have no way to guarantee that any of the currently active drivers will actually pick it up and they also have no way to track that.
It's been pointed out that cab companies are not in the business of providing rides, they're in the business of renting out medallions.
posted by octothorpe at 6:31 AM on July 9, 2014 [1 favorite]
But the way that they're structured, they can't. Since they don't actually employ the drivers, the cab companies have very little control over what they do with the cabs. They send out the message that someone wants a ride but they have no way to guarantee that any of the currently active drivers will actually pick it up and they also have no way to track that.
It's been pointed out that cab companies are not in the business of providing rides, they're in the business of renting out medallions.
posted by octothorpe at 6:31 AM on July 9, 2014 [1 favorite]
Y'know...this post and the entire comments thread reminded me today why I keep coming back to Mefi. There's really nowhere else like the Old Blue Lady.
posted by runningdogofcapitalism at 6:33 AM on July 9, 2014 [4 favorites]
posted by runningdogofcapitalism at 6:33 AM on July 9, 2014 [4 favorites]
It's been pointed out that cab companies are not in the business of providing rides, they're in the business of renting out medallions.
I think that's probably true, but at the same time, they decide how they're running their businesses and what lines of business they're in. In a sense, this kind of restructuring is what (some of) bankruptcy protection is designed for.
posted by atbash at 6:34 AM on July 9, 2014
I think that's probably true, but at the same time, they decide how they're running their businesses and what lines of business they're in. In a sense, this kind of restructuring is what (some of) bankruptcy protection is designed for.
posted by atbash at 6:34 AM on July 9, 2014
BTW did you know there is a public company whose entire business model is loans to medallion companies? TAXI is the ticker.
posted by JPD at 6:39 AM on July 9, 2014 [3 favorites]
posted by JPD at 6:39 AM on July 9, 2014 [3 favorites]
It's been pointed out that cab companies are not in the business of providing rides, they're in the business of renting out medallions.
Yup. And that's why there's a huge gap in the market for a company that is, in fact, in the business of providing rides.
posted by Tomorrowful at 6:56 AM on July 9, 2014 [3 favorites]
Yup. And that's why there's a huge gap in the market for a company that is, in fact, in the business of providing rides.
posted by Tomorrowful at 6:56 AM on July 9, 2014 [3 favorites]
If you want to know some of the history, Planet Money had a podcast a few years back on the origins of the medallion system. tl;dl: Way back in the 30s in New York there was no licensing for private drivers, and because of the depression there were suddenly a lot of people offering rides for very cheap. Too cheap, so the government created artificial scarcity with medallions. And it's been one long corrupt broken down ride with shitty service and ads bleating at you in the car ever since.
I hate to admit it, but the libertarian wet dream that is Uber probably is better than the local government granted monopolies we have now in the US.
posted by Nelson at 6:59 AM on July 9, 2014 [5 favorites]
I hate to admit it, but the libertarian wet dream that is Uber probably is better than the local government granted monopolies we have now in the US.
posted by Nelson at 6:59 AM on July 9, 2014 [5 favorites]
Anecdotal here but I work at a bar with my friend Doug who is a black dude. When we hail a cab to go to work he makes me do it and stands back because the cabbies won't pick him up.
The other day he was stranded somewhere in town after a bus incident and I called him an uber (he doesn't have a smart phone) to get to work. They picked him up and drove him to work no problem.
This doesn't really PROVE anything but it sure makes me more likely to call an uber than a cab, Randian owner bedamned.
posted by josher71 at 7:02 AM on July 9, 2014 [3 favorites]
The other day he was stranded somewhere in town after a bus incident and I called him an uber (he doesn't have a smart phone) to get to work. They picked him up and drove him to work no problem.
This doesn't really PROVE anything but it sure makes me more likely to call an uber than a cab, Randian owner bedamned.
posted by josher71 at 7:02 AM on July 9, 2014 [3 favorites]
I was in Chicago last weekend and took uber a few times. Some observations:
posted by heresiarch at 7:06 AM on July 9, 2014 [12 favorites]
- Of our three rides, all the drivers were women. Two were women of color. I've never been picked up by a woman in a normal taxi, and this seems like a really valuable expansion of the "who can be a driver" category.
- One of our drivers had driven for a normal taxi company in the past, but said that as a result of some obscure beef with the dispatcher, she was essentially frozen out of the business and couldn't earn back her car/medallion rental fees reliably, so she switched to uber.
- One of our drivers took a very circuitous route to get to a major tourist destination. My wife mentioned it in the feedback form, someone at Uber central looked at the GPS trace and credited us the difference. This seems like one of many ways in which Uber aligns the incentive structures for drivers and passengers in a more sensible way.
posted by heresiarch at 7:06 AM on July 9, 2014 [12 favorites]
Limiting the number of taxis never made sense to me. If capping the number of service providers is so great for society, why don't we do it for restaurants, shoe manufacturers, or software engineers?
Oh, and here is the Planet Money show about taxi medallions, audio and transcript.
posted by Triplanetary at 7:41 AM on July 9, 2014 [1 favorite]
Oh, and here is the Planet Money show about taxi medallions, audio and transcript.
posted by Triplanetary at 7:41 AM on July 9, 2014 [1 favorite]
Can I just synthesize this whole thread to say that its an opportunity waiting for disruption?
posted by infini at 8:06 AM on July 9, 2014 [1 favorite]
posted by infini at 8:06 AM on July 9, 2014 [1 favorite]
Tomorrowful: I'm far from the only young lefty who doesn't have any particular fondness for "regulation" per se and is happy to use market solutions if they actually make things better.
This reads like a straw man argument to me. A vanishingly small number of lefties, young, old, or in-between, have any kind of fondness for "regulation per se." The fact is markets of all kinds need regulation, but those regulations have to be smart and adaptable to changes in market dynamics. I think most people on the left can agree on that, at least in the abstract.
The question then becomes what do we do when both the free market and the regulatory framework have failed us, and the problem many of us have with the services that have stepped into the breach is that they create a problem for every one they solve. The status quo in many cities is indefensible, but that doesn't mean we need to shift so far toward the other extreme by letting these services come in with almost no regulation above what's required for normal drivers. If they're operating as taxis, they ought to be regulated as taxis, but not necessarily the way taxis are regulated today. It doesn't have to be one or the other.
A while back I linked to a series of blog posts on the problems associated with these services expanding here in Pittsburgh, and how their expansion undermines support for transit options that can serve people these services can't (or won't) because the market dynamics don't make serving those people profitable enough. Some of the criticisms made in those posts are still valid, while others have been at least partially addressed as the services have expanded, but I still think there needs to be a strict, sensible regulatory framework for taxi services.
posted by tonycpsu at 8:08 AM on July 9, 2014 [7 favorites]
This reads like a straw man argument to me. A vanishingly small number of lefties, young, old, or in-between, have any kind of fondness for "regulation per se." The fact is markets of all kinds need regulation, but those regulations have to be smart and adaptable to changes in market dynamics. I think most people on the left can agree on that, at least in the abstract.
The question then becomes what do we do when both the free market and the regulatory framework have failed us, and the problem many of us have with the services that have stepped into the breach is that they create a problem for every one they solve. The status quo in many cities is indefensible, but that doesn't mean we need to shift so far toward the other extreme by letting these services come in with almost no regulation above what's required for normal drivers. If they're operating as taxis, they ought to be regulated as taxis, but not necessarily the way taxis are regulated today. It doesn't have to be one or the other.
A while back I linked to a series of blog posts on the problems associated with these services expanding here in Pittsburgh, and how their expansion undermines support for transit options that can serve people these services can't (or won't) because the market dynamics don't make serving those people profitable enough. Some of the criticisms made in those posts are still valid, while others have been at least partially addressed as the services have expanded, but I still think there needs to be a strict, sensible regulatory framework for taxi services.
posted by tonycpsu at 8:08 AM on July 9, 2014 [7 favorites]
Uber needs to end "surge" pricing. Current taxis - with all their flaws - aren't allowed to profit from bad weather or whathaveyou.
posted by Pogo_Fuzzybutt at 8:08 AM on July 9, 2014 [1 favorite]
posted by Pogo_Fuzzybutt at 8:08 AM on July 9, 2014 [1 favorite]
But the way that they're structured, they can't. Since they don't actually employ the drivers, the cab companies have very little control over what they do with the cabs. They send out the message that someone wants a ride but they have no way to guarantee that any of the currently active drivers will actually pick it up and they also have no way to track that.
Can this really be true? If I want a cab from (city-regulated, traditional) taxi company Union Cab, I can order one online and then track its progress towards me. (Very likely this feature is the result of expected competition from Lyft/Uber, to be fair.) I don't believe we have a medallion system here. The current political battle here in Madison centers on city regulations for cabs. E.G. the current cab companies are required to offer service 24/7, while Lyft/Uber don't guarantee this. I'm not even sure they can, given their system. As I understand it, the idea of Uber is that it can skim the most profitable part of the taxi business and avoid the rest; especially, it can price differentially and thus concentrate on people with more to spend.
I actually just took my first Uber ride, in Chicago! Or, well, not exactly; it was a guy who sometimes drives for Uber but mostly uses them as a way to get customers he can then make deals with directly, because he (and according to him, a lot of other people) are angry at the high commission Uber charges. Innovation!
posted by escabeche at 8:09 AM on July 9, 2014
Can this really be true? If I want a cab from (city-regulated, traditional) taxi company Union Cab, I can order one online and then track its progress towards me. (Very likely this feature is the result of expected competition from Lyft/Uber, to be fair.) I don't believe we have a medallion system here. The current political battle here in Madison centers on city regulations for cabs. E.G. the current cab companies are required to offer service 24/7, while Lyft/Uber don't guarantee this. I'm not even sure they can, given their system. As I understand it, the idea of Uber is that it can skim the most profitable part of the taxi business and avoid the rest; especially, it can price differentially and thus concentrate on people with more to spend.
I actually just took my first Uber ride, in Chicago! Or, well, not exactly; it was a guy who sometimes drives for Uber but mostly uses them as a way to get customers he can then make deals with directly, because he (and according to him, a lot of other people) are angry at the high commission Uber charges. Innovation!
posted by escabeche at 8:09 AM on July 9, 2014
Can this really be true? If I want a cab from (city-regulated, traditional) taxi company Union Cab, I can order one online and then track its progress towards me. (Very likely this feature is the result of expected competition from Lyft/Uber, to be fair)
No, they've had that for... years. I want to say it predates lyft/uber but, I guess I'm not certain of that. But I know it's been a feature for a long time.
posted by Pogo_Fuzzybutt at 8:17 AM on July 9, 2014
No, they've had that for... years. I want to say it predates lyft/uber but, I guess I'm not certain of that. But I know it's been a feature for a long time.
posted by Pogo_Fuzzybutt at 8:17 AM on July 9, 2014
Uber needs to end "surge" pricing. Current taxis - with all their flaws - aren't allowed to profit from bad weather or whathaveyou.
has anyone seen data that shows a supply response to surges? That's the pro-argument.
posted by JPD at 8:20 AM on July 9, 2014
has anyone seen data that shows a supply response to surges? That's the pro-argument.
posted by JPD at 8:20 AM on July 9, 2014
I still think there needs to be a strict, sensible regulatory framework for taxi services.
So lets say we safety regs and rules surrounding who must be picked up and what areas you have to serve. Beyond that what is required to regulate taxis?
posted by JPD at 8:22 AM on July 9, 2014 [2 favorites]
So lets say we safety regs and rules surrounding who must be picked up and what areas you have to serve. Beyond that what is required to regulate taxis?
posted by JPD at 8:22 AM on July 9, 2014 [2 favorites]
Uber needs to end "surge" pricing. Current taxis - with all their flaws - aren't allowed to profit from bad weather or whathaveyou.
But the "surge" pricing is the whole point of Uber. Unlike cabs, an Uber is always available to you, if you're willing to pay the price. Higher demand means that it costs more.
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed.
posted by explosion at 8:23 AM on July 9, 2014 [2 favorites]
But the "surge" pricing is the whole point of Uber. Unlike cabs, an Uber is always available to you, if you're willing to pay the price. Higher demand means that it costs more.
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed.
posted by explosion at 8:23 AM on July 9, 2014 [2 favorites]
But the "surge" pricing is the whole point of Uber. Unlike cabs, an Uber is always available to you, if you're willing to pay the price. Higher demand means that it costs more.
Sure - but you see why this is problematic right? If "surge" pricing isn't capable of adding supply then you've got a market failure, and hence a real argument for price controls.
posted by JPD at 8:35 AM on July 9, 2014
Sure - but you see why this is problematic right? If "surge" pricing isn't capable of adding supply then you've got a market failure, and hence a real argument for price controls.
posted by JPD at 8:35 AM on July 9, 2014
If "surge" pricing isn't capable of adding supply then you've got a market failure, and hence a real argument for price controls.
I've got a job and a baby and there's still an amount of money I'd get out of bed to drive you around for. The likelihood of market failure here under ordinary conditions (say sports events) is pretty small. The real problem would be congestion: surge pricing where the supply is limited (say by weather). That's where gouging becomes realistic.
posted by anotherpanacea at 8:41 AM on July 9, 2014
I've got a job and a baby and there's still an amount of money I'd get out of bed to drive you around for. The likelihood of market failure here under ordinary conditions (say sports events) is pretty small. The real problem would be congestion: surge pricing where the supply is limited (say by weather). That's where gouging becomes realistic.
posted by anotherpanacea at 8:41 AM on July 9, 2014
JPD: So lets say we safety regs and rules surrounding who must be picked up and what areas you have to serve. Beyond that what is required to regulate taxis?
If they're safely serving the public, then I'd consider them well-regulated.
The one issue that does come into play with these services that doesn't typically with traditional taxis is the possibility of reputation-based scoring skewing away from minority drivers. A recent Wired article mentioned a study that said Airbnb customers pay black hosts less than white hosts, controlling for other variables. If these taxi services that rely on the reputation of drivers were to be exhibiting a similar dynamic, then that would be a significant problem. Maybe not an easy one to fix with regulations, but certainly something we'd want to keep an eye on.
posted by tonycpsu at 8:45 AM on July 9, 2014 [1 favorite]
If they're safely serving the public, then I'd consider them well-regulated.
The one issue that does come into play with these services that doesn't typically with traditional taxis is the possibility of reputation-based scoring skewing away from minority drivers. A recent Wired article mentioned a study that said Airbnb customers pay black hosts less than white hosts, controlling for other variables. If these taxi services that rely on the reputation of drivers were to be exhibiting a similar dynamic, then that would be a significant problem. Maybe not an easy one to fix with regulations, but certainly something we'd want to keep an eye on.
posted by tonycpsu at 8:45 AM on July 9, 2014 [1 favorite]
I'd like to see data that shows that to be the case. Do you really think there are folks who just operate as a cab during rush hours? I bet utilization rates aren't high enough to justify it.
Cab prices already take congestion into account. At least in NYC. A billing unit is either a distance or a time.
posted by JPD at 8:46 AM on July 9, 2014 [1 favorite]
Cab prices already take congestion into account. At least in NYC. A billing unit is either a distance or a time.
posted by JPD at 8:46 AM on July 9, 2014 [1 favorite]
Pogo_Fuzzybutt: "Uber needs to end "surge" pricing. Current taxis - with all their flaws - aren't allowed to profit from bad weather or whathaveyou."
They've announced yesterday that they will cap it, and I feel it will be a net loss to consumers. I mean, yes I would love to see actual data on how surge pricing affects supply, but it would be pretty amazing if it did not look like it came straight out of an intro to micoeconomics textbook.
Honestly, this is the one issue that surprises me about progressive-minded folks. Like, we're usually all fuck yeah science, except when it comes to economics. Like all the arguments against surge pricing I've seen are emotional, and completely deny evidence.
posted by danny the boy at 8:53 AM on July 9, 2014 [2 favorites]
They've announced yesterday that they will cap it, and I feel it will be a net loss to consumers. I mean, yes I would love to see actual data on how surge pricing affects supply, but it would be pretty amazing if it did not look like it came straight out of an intro to micoeconomics textbook.
Honestly, this is the one issue that surprises me about progressive-minded folks. Like, we're usually all fuck yeah science, except when it comes to economics. Like all the arguments against surge pricing I've seen are emotional, and completely deny evidence.
posted by danny the boy at 8:53 AM on July 9, 2014 [2 favorites]
Like, we're usually all fuck yeah science, except when it comes to economics.
Economics is not a hard science. It's a species of social science that arose from the philosophy of ethics. Economics is about balancing various costs and optimizing for different kinds of utility. Purely free market theoretical approaches to problems come with known costs that can be offset in various ways by public policy. Economics does not provide simple answers to problems like a calculator, it offers a variety of tools for thinking about how best to achieve certain arbitrary goals (those arbitrary goals may not be arbitrary from a sociological or cultural perspective, of course, but economics as a discipline doesn't even pretend to shed any light on what humans should value, so from the POV of pure economics, the goals are arbitrary).
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed.
So Uber can't necessarily fulfill the public utility function taxis are meant to fulfill (namely, ensuring enough affordable transportation is available to meet whatever level of demand for service there is without costing more) without Taxi systems running alongside Uber as a backstop? A lot of private business models like this can only work in the gaps but could never actually solve the problems the existing systems were meant to solve due to their for-profit nature and need to maximize (rather than stabilize) pricing. The point of many public utilities is to make services universally accessible and maximally cost-efficient for the users of the systems. For-profit enterprises by design are not concerned with maximizing the efficiency of cost to end consumers, but in fact, have the opposite incentives to a public good.
How well does Uber's model work to provide the public good of cheap, ubiquitous and accountable public transportation without exploiting gaps in an existing, broken system to make it look better by comparison? That's what I have to wonder.
posted by saulgoodman at 9:13 AM on July 9, 2014 [8 favorites]
Economics is not a hard science. It's a species of social science that arose from the philosophy of ethics. Economics is about balancing various costs and optimizing for different kinds of utility. Purely free market theoretical approaches to problems come with known costs that can be offset in various ways by public policy. Economics does not provide simple answers to problems like a calculator, it offers a variety of tools for thinking about how best to achieve certain arbitrary goals (those arbitrary goals may not be arbitrary from a sociological or cultural perspective, of course, but economics as a discipline doesn't even pretend to shed any light on what humans should value, so from the POV of pure economics, the goals are arbitrary).
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed.
So Uber can't necessarily fulfill the public utility function taxis are meant to fulfill (namely, ensuring enough affordable transportation is available to meet whatever level of demand for service there is without costing more) without Taxi systems running alongside Uber as a backstop? A lot of private business models like this can only work in the gaps but could never actually solve the problems the existing systems were meant to solve due to their for-profit nature and need to maximize (rather than stabilize) pricing. The point of many public utilities is to make services universally accessible and maximally cost-efficient for the users of the systems. For-profit enterprises by design are not concerned with maximizing the efficiency of cost to end consumers, but in fact, have the opposite incentives to a public good.
How well does Uber's model work to provide the public good of cheap, ubiquitous and accountable public transportation without exploiting gaps in an existing, broken system to make it look better by comparison? That's what I have to wonder.
posted by saulgoodman at 9:13 AM on July 9, 2014 [8 favorites]
danny the boy: Honestly, this is the one issue that surprises me about progressive-minded folks. Like, we're usually all fuck yeah science, except when it comes to economics. Like all the arguments against surge pricing I've seen are emotional, and completely deny evidence.
If you haven't yet, I suggest you read the blog posts linked in this recent FPP. They're somewhat long and detailed, so if you have enough background on the topic, feel free to skip to the fourth post, which discusses in detail the various ways in which markets, in an of themselves, don't always serve society. The tl;dr response to your (IMHO erroneous) assertion actually comes from a previous post by the same author (boldface is my emphasis):
If you haven't yet, I suggest you read the blog posts linked in this recent FPP. They're somewhat long and detailed, so if you have enough background on the topic, feel free to skip to the fourth post, which discusses in detail the various ways in which markets, in an of themselves, don't always serve society. The tl;dr response to your (IMHO erroneous) assertion actually comes from a previous post by the same author (boldface is my emphasis):
Unfortunately, in realistic contexts, surplus is not a reliable measure of welfare. An allocation that maximizes surplus can be destructive of welfare. The lesson you probably learned in an introductory economics course is based on a wholly unjustifiable slip between the two concepts.posted by tonycpsu at 9:14 AM on July 9, 2014 [3 favorites]
...
But… but… but… If we don’t “let markets clear”, if we don’t let prices ration access to supply, won’t we have day-long Soviet meat lines? If the alternative to price-rationing automobile lanes creates traffic jams and pollution and accidents, isn’t price-rationing superior because it avoids those costs, which are in excess of mere lack of access to the goods being rationed? Avoiding unnecessary costs occasioned by alternative forms of rationing is undoubtedly a good thing. But bearing those costs may be welfare-superior to bearing the costs of market allocation under severe inequality. There is a lot of not-irrataional nostalgia among the poor in post-Communist countries for lives that included long queues. And there are lots of choices besides “whatever price the market bears” and allocation by waiting in line all day. Ration coupons, for example, are issued during wartime precisely because the welfare cost of letting the rich bid up prices while the poor starve are too obvious to be ignored. Under sufficiently high levels of inequality, rationing scarce goods by lottery may be superior in welfare terms to market allocation.
but it would be pretty amazing if it did not look like it came straight out of an intro to micoeconomics textbook
there are lots of industries that in theory have free entry and exit that don't actually look like that.
It may be the case that you are correct - but ironically if that was the case you'd expect surge pricing to not be that different from regular pricing, as the short term cost function of running a cab is very flat for the entire possible pool.
posted by JPD at 9:14 AM on July 9, 2014
there are lots of industries that in theory have free entry and exit that don't actually look like that.
It may be the case that you are correct - but ironically if that was the case you'd expect surge pricing to not be that different from regular pricing, as the short term cost function of running a cab is very flat for the entire possible pool.
posted by JPD at 9:14 AM on July 9, 2014
Under sufficiently high levels of inequality, rationing scarce goods by lottery may be superior in welfare terms to market allocation.
Yeah but the Uber argument is that these goods aren't scarce and that they readily respond to price signals. And therefore the rich can't bid up the price.
posted by JPD at 9:18 AM on July 9, 2014
Yeah but the Uber argument is that these goods aren't scarce and that they readily respond to price signals. And therefore the rich can't bid up the price.
posted by JPD at 9:18 AM on July 9, 2014
JPD: Yeah but the Uber argument is that these goods aren't scarce and that they readily respond to price signals. And therefore the rich can't bid up the price.
Care to link to them making this argument, preferably with some metrics to support it?
posted by tonycpsu at 9:22 AM on July 9, 2014
Care to link to them making this argument, preferably with some metrics to support it?
posted by tonycpsu at 9:22 AM on July 9, 2014
I mean, the whole concept of "surge" pricing is that there is a surge in demand. That means the existing supply of drivers (whatever that is) is going to need to serve more riders. I don't see how they get to hand-wave away the scarcity with "well there's a lot more drivers out there who could pick up the slack." Yes, but... will they? Do they?
posted by tonycpsu at 9:26 AM on July 9, 2014
posted by tonycpsu at 9:26 AM on July 9, 2014
I mean, the whole concept of "surge" pricing is that there is a surge in demand. That means the existing supply of drivers (whatever that is) is going to need to serve more riders. I don't see how they get to hand-wave away the scarcity with "well there's a lot more drivers out there who could pick up the slack." Yes, but... will they? Do they?
I don't know the internal metrics. But if was a driver and there was surge pricing and I knew that there was a ton of demand, I'd be likely to put on my uber hat and start giving some rides.
In the six months I've used Uber in Baltimore, almost daily, I've seen surge pricing three times. I have no idea how that compares to other cities.
posted by josher71 at 9:31 AM on July 9, 2014
I don't know the internal metrics. But if was a driver and there was surge pricing and I knew that there was a ton of demand, I'd be likely to put on my uber hat and start giving some rides.
In the six months I've used Uber in Baltimore, almost daily, I've seen surge pricing three times. I have no idea how that compares to other cities.
posted by josher71 at 9:31 AM on July 9, 2014
I have only used Uber twice, but in both cases, my taxi wait time was at least 75% shorter, an my fare was 50% cheaper. This was in an NC college town, and I'm not even sure medallions exist here, but if they did, how would they be better for me as a customer, or uber drivers as taxi cab workers? That's what I don't understand. Is it really all just to keep prices up?
For what it's worth, I think a good public health argument could be made for cheaper/subsidized taxi fare -- less drunk drivers on the road!
posted by oceanjesse at 9:32 AM on July 9, 2014 [1 favorite]
For what it's worth, I think a good public health argument could be made for cheaper/subsidized taxi fare -- less drunk drivers on the road!
posted by oceanjesse at 9:32 AM on July 9, 2014 [1 favorite]
...and tonycpsu's comment above has made it clear that I have not been thinking about this like an economist at all.
posted by oceanjesse at 9:36 AM on July 9, 2014
posted by oceanjesse at 9:36 AM on July 9, 2014
Under sufficiently high levels of inequality, rationing scarce goods by lottery may be superior in welfare terms to market allocation
You'd probably come closer to welfare maximization for relevant goods by initially distributing by lottery but allowing the lottery winners to resell the good at market prices. Then people whose valuation of the good is above their ability to pay can decline offers and keep the good, but people who don't value the good as highly can just sell it to someone who does.
posted by ROU_Xenophobe at 9:38 AM on July 9, 2014
You'd probably come closer to welfare maximization for relevant goods by initially distributing by lottery but allowing the lottery winners to resell the good at market prices. Then people whose valuation of the good is above their ability to pay can decline offers and keep the good, but people who don't value the good as highly can just sell it to someone who does.
posted by ROU_Xenophobe at 9:38 AM on July 9, 2014
Perhaps, but that's certainly a derail in a thread where the good being sold isn't one that can easily be resold for a markup. I only brought the welfare economics thread in to dispatch the silly notion that liberals are somehow dismissive of economic analysis when it clashes with their first principles.
posted by tonycpsu at 9:43 AM on July 9, 2014
posted by tonycpsu at 9:43 AM on July 9, 2014
Care to link to them making this argument, preferably with some metrics to support it?
Uh did you read the rest of the thread of comments? Please do that.
posted by JPD at 9:49 AM on July 9, 2014
Uh did you read the rest of the thread of comments? Please do that.
posted by JPD at 9:49 AM on July 9, 2014
JPD: Uh did you read the rest of the thread of comments? Please do that.
Well that's an unnecessarily rude response. I've read the whole thread closely. If I missed a comment or comments that you think lay out a persuasive case that "these goods aren't scarce and that they readily respond to price signals", please cite it instead of being a jerk.
posted by tonycpsu at 9:53 AM on July 9, 2014
Well that's an unnecessarily rude response. I've read the whole thread closely. If I missed a comment or comments that you think lay out a persuasive case that "these goods aren't scarce and that they readily respond to price signals", please cite it instead of being a jerk.
posted by tonycpsu at 9:53 AM on July 9, 2014
you were the one being aggressive when you demanded data and couldn't even be bothered to figure out that I don't think surge pricing does what Uber claims it does. As I said in at least three earlier comments.
Indeed I even asked earlier in the thread if anyone had seen supply numbers from Uber.
posted by JPD at 9:58 AM on July 9, 2014
Indeed I even asked earlier in the thread if anyone had seen supply numbers from Uber.
posted by JPD at 9:58 AM on July 9, 2014
you were the one being aggressive when you demanded data and couldn't even be bothered to figure out that I don't think surge pricing does what Uber claims it does. As I said in at least three earlier comments.
Indeed I even asked earlier in the thread if anyone had seen supply numbers from Uber.
It's unclear to me why you seem so insistent on focusing solely on supply changes and ignoring demand. Aren't most surge prices not emergencies but ordinary high-demand times such as New Years Eve? Uber's claim, as I understand it, is that you can get a car when you want, period. Both supply and demand matter here. The definition you appear to be using here of "market failure" where only supply changes matter is, I think, simply not correct.
posted by dsfan at 10:05 AM on July 9, 2014
Indeed I even asked earlier in the thread if anyone had seen supply numbers from Uber.
It's unclear to me why you seem so insistent on focusing solely on supply changes and ignoring demand. Aren't most surge prices not emergencies but ordinary high-demand times such as New Years Eve? Uber's claim, as I understand it, is that you can get a car when you want, period. Both supply and demand matter here. The definition you appear to be using here of "market failure" where only supply changes matter is, I think, simply not correct.
posted by dsfan at 10:05 AM on July 9, 2014
This is great. I lived without a car for 5 years in Minneapolis, and I would have almost literally killed to have access to Uber or Lyft or car2go then. Many, many people do not have access to personal vehicles and while transit can work ok for regular trips, the occasional need to go to the suburbs or stay late at work is an absolute deal breaker for the car-free lifestyle. Anything that can make that easier is definitely welcome.
posted by miyabo at 10:08 AM on July 9, 2014 [1 favorite]
posted by miyabo at 10:08 AM on July 9, 2014 [1 favorite]
I think it's hilarious y'all are arguing about Uber's dynamic supply and demand model here in a discussion which is all about how the current fixed-supply taxi medallion system is failing, in large part because of falling demand for their monopoly service.
posted by Nelson at 10:16 AM on July 9, 2014
posted by Nelson at 10:16 AM on July 9, 2014
I think when you're talking about the superiority of the uber model to a price and volume controlled taxi model it needs to be predicated on the idea that supply responds. Which can't happen in a medallion model.
I'm guessing demand at surge times isn't very elastic.
I think it's hilarious y'all are arguing about Uber's dynamic supply and demand model here in a discussion which is all about how the current fixed-supply taxi medallion system is failing, in large part because of falling demand for their monopoly service.
huh? If its failing, its failing because of Uber. Its utterly reasonable to ask if the Uber model is really superior and as dynamic as they claim.
posted by JPD at 10:20 AM on July 9, 2014
I'm guessing demand at surge times isn't very elastic.
I think it's hilarious y'all are arguing about Uber's dynamic supply and demand model here in a discussion which is all about how the current fixed-supply taxi medallion system is failing, in large part because of falling demand for their monopoly service.
huh? If its failing, its failing because of Uber. Its utterly reasonable to ask if the Uber model is really superior and as dynamic as they claim.
posted by JPD at 10:20 AM on July 9, 2014
also IIRC Uber argues that the surge model is a net good because it incentivizes supply, not that it reduces demand. So it seems only fair to focus on the supply side.
posted by JPD at 10:27 AM on July 9, 2014
posted by JPD at 10:27 AM on July 9, 2014
also IIRC Uber argues that the surge model is a net good because it incentivizes supply, not that it reduces demand. So it seems only fair to focus on the supply side.
I think they believe it maximizes the number of trips (which is highly likely, since a person who can't get a driver isn't taking a trip). But I am almost certain that they would argue that if they can't increase supply enough, customer value is higher if people can decide whether or not they want to pay the surge price rather than simply not receive a car. And despite the noble attempt cited above to argue in favor of lotteries, this is extremely likely to be the case in the case of luxury goods (which a car service during peak demand is), as almost all economists agree.
posted by dsfan at 10:53 AM on July 9, 2014
I think they believe it maximizes the number of trips (which is highly likely, since a person who can't get a driver isn't taking a trip). But I am almost certain that they would argue that if they can't increase supply enough, customer value is higher if people can decide whether or not they want to pay the surge price rather than simply not receive a car. And despite the noble attempt cited above to argue in favor of lotteries, this is extremely likely to be the case in the case of luxury goods (which a car service during peak demand is), as almost all economists agree.
posted by dsfan at 10:53 AM on July 9, 2014
Uber needs to end "surge" pricing. Current taxis - with all their flaws - aren't allowed to profit from bad weather or whathaveyou.
Not quite true: DC implements $15 "Emergency Fees" during some storms (particularly snow). (Example)
Though yes, I'm sure Uber does it more often.
posted by inigo2 at 10:54 AM on July 9, 2014 [1 favorite]
Not quite true: DC implements $15 "Emergency Fees" during some storms (particularly snow). (Example)
Though yes, I'm sure Uber does it more often.
posted by inigo2 at 10:54 AM on July 9, 2014 [1 favorite]
I think they believe it maximizes the number of trips (which is highly likely, since a person who can't get a driver isn't taking a trip).
not if it isn't creating more drivers.
posted by JPD at 11:06 AM on July 9, 2014
not if it isn't creating more drivers.
posted by JPD at 11:06 AM on July 9, 2014
not if it isn't creating more drivers.
It's still a maximum, just not the only price that results in maximum quantity.
posted by dsfan at 11:08 AM on July 9, 2014
It's still a maximum, just not the only price that results in maximum quantity.
posted by dsfan at 11:08 AM on July 9, 2014
JPD: you were the one being aggressive when you demanded data
That's a really uncharitable reading of "Care to link to them making this argument, preferably with some metrics to support it?" You seemed to be familiar with Uber's argument, so I was hoping you'd have a link or two handy that shows them making it in greater detail.
posted by tonycpsu at 11:09 AM on July 9, 2014
That's a really uncharitable reading of "Care to link to them making this argument, preferably with some metrics to support it?" You seemed to be familiar with Uber's argument, so I was hoping you'd have a link or two handy that shows them making it in greater detail.
posted by tonycpsu at 11:09 AM on July 9, 2014
It's still a maximum, just not the only price that results in maximum quantity.
Sure but how does that same q at a higher p benefit the market? Why should we end the price cap for that?
posted by JPD at 11:18 AM on July 9, 2014
Sure but how does that same q at a higher p benefit the market? Why should we end the price cap for that?
posted by JPD at 11:18 AM on July 9, 2014
Sure but how does that same q at a higher p benefit the market?
Example: I value a car at $40, the only other customer values it at $20. If prices surge to $25, and only one car is available, I have $15 of surplus which I get from receiving the car. If prices are capped at $18, and the car is randomly assigned between the two of us, the expected consumer surplus is only $12 (0.5*(20-18)) + (0.5*(40-18)). Opportunity costs are real costs.
I mean, what about your argument doesn't apply to anything with fixed supply? There's the same number of seats at the Super Bowl if the price is $1/ticket vs. $1,000, so why not put price caps on it? This is why I was perplexed by your definition of "market failure." The question that I don't think we've answered here is to what degree surge pricing is more like the Super Bowl--fairly predictable, and a luxury (e.g. hailing a black car instantly at 12:30 am New Years Day)--and how often it's emergencies. My sense is it's significantly more the former, but that I think is the data you need.
posted by dsfan at 11:32 AM on July 9, 2014
Example: I value a car at $40, the only other customer values it at $20. If prices surge to $25, and only one car is available, I have $15 of surplus which I get from receiving the car. If prices are capped at $18, and the car is randomly assigned between the two of us, the expected consumer surplus is only $12 (0.5*(20-18)) + (0.5*(40-18)). Opportunity costs are real costs.
I mean, what about your argument doesn't apply to anything with fixed supply? There's the same number of seats at the Super Bowl if the price is $1/ticket vs. $1,000, so why not put price caps on it? This is why I was perplexed by your definition of "market failure." The question that I don't think we've answered here is to what degree surge pricing is more like the Super Bowl--fairly predictable, and a luxury (e.g. hailing a black car instantly at 12:30 am New Years Day)--and how often it's emergencies. My sense is it's significantly more the former, but that I think is the data you need.
posted by dsfan at 11:32 AM on July 9, 2014
I tend to think a market that doesn't respond to price signals is a failed market.
Letting the market act with surge pricing where the market doesn't add supply as a response to price is allocating resources more efficiently in the classical sense, but not in a way that benefits the residents of the city. The goal of regulation is to transport the most people as cheaply as possibly. If NYC fails its because we need more medallions, but if anything fares are set too high.
If regular prices were too low such that we needed surge pricing to incentivize new supply I'd be cool with it - but we don't. The value of a medallion tells you that the city could easily add capacity just by auctioning off more medallions - or some other method to find a price that clears.
posted by JPD at 11:44 AM on July 9, 2014
Letting the market act with surge pricing where the market doesn't add supply as a response to price is allocating resources more efficiently in the classical sense, but not in a way that benefits the residents of the city. The goal of regulation is to transport the most people as cheaply as possibly. If NYC fails its because we need more medallions, but if anything fares are set too high.
If regular prices were too low such that we needed surge pricing to incentivize new supply I'd be cool with it - but we don't. The value of a medallion tells you that the city could easily add capacity just by auctioning off more medallions - or some other method to find a price that clears.
posted by JPD at 11:44 AM on July 9, 2014
I was talking about the medallion system with my Uber driver yesterday. San Diego was in the first batch of US cities and to the extent Uber's impact on the market is mature, it's mature here. The cab drivers here have gotten somewhat difficult about Uber. For instance if you're waiting for an Uber pick up at the Solana Beach train station you can be sure a cab driver will approach you and give you a hard time. (Yes! That makes me totally want to hop in a car with you. You have a grasp of the subtleties of marketing Mr Cab Driver!)
My Uber driver was a cab driver for years and when Uber hit SD the price of medallions tumbled. She could have bought one for $20K. She and a group of friends considered it because that was tens of thousands lower than they'd ever sold. They looked at the market, and bought Priuses instead. Her take is that people who jumped at a $20K medallion are now deeply regretting it. Cab driving was always a hard way to make a living with a $4K a month investment just to rent a cab. Now, it's nearly impossible. (Which is heartbreaking.)
From my vantage point as a business traveler, what Uber did was take a car service model and apply it. I was never a big cab user, but had a contract with one of the national car services for the same things that I like about Uber - screened drivers, cashless and they email me a receipt for my expense report. They removed the barrier of scheduling and lowered the cost of a premium service.
This is basic 4 Ps: promote a better product, at a lower price, in an accessible place. Of course Uber will win over taxis.
posted by 26.2 at 11:49 AM on July 9, 2014 [8 favorites]
My Uber driver was a cab driver for years and when Uber hit SD the price of medallions tumbled. She could have bought one for $20K. She and a group of friends considered it because that was tens of thousands lower than they'd ever sold. They looked at the market, and bought Priuses instead. Her take is that people who jumped at a $20K medallion are now deeply regretting it. Cab driving was always a hard way to make a living with a $4K a month investment just to rent a cab. Now, it's nearly impossible. (Which is heartbreaking.)
From my vantage point as a business traveler, what Uber did was take a car service model and apply it. I was never a big cab user, but had a contract with one of the national car services for the same things that I like about Uber - screened drivers, cashless and they email me a receipt for my expense report. They removed the barrier of scheduling and lowered the cost of a premium service.
This is basic 4 Ps: promote a better product, at a lower price, in an accessible place. Of course Uber will win over taxis.
posted by 26.2 at 11:49 AM on July 9, 2014 [8 favorites]
the city could easily add capacity just by auctioning off more medallions
You have an optimistic view of the independence and right-thinkingness of city officials. Every single time I've ever heard of a US city trying to add more medallions it quickly gets shouted down. Given the general air of organized crime and corruption surrounding the taxi industry, I assume either threats or bribes are involved. (Citation needed; I'd love to see some hard data on the state of the medallion markets.)
I could argue either side of whether Uber surge pricing makes good economic sense. But it makes a terrible experience for consumers. It feels like price gouging, and very stiff gouging at that, and creates a lot of ill-will. And then mansplanations about supply/demand curves and the magical power of the free market and dammit I've already had 4 beers I just want to go home what do you mean it's gonna cost $100? It's a bad consumer experience.
I'm particularly curious Uber's chosen to expose surge pricing because it also gives customers a view of what it would mean if Uber succeeded in creating a monopoly on driver supply. An unregulated monopoly, with fees set at Uber's whims. There's a lot of competition and froth in the market right now and I think in general Uber's addition is a good thing. But if Uber charges $100 for a 15 minute ride now because it's raining, what's to stop them from charging $100 five years from now because they're the only option?
posted by Nelson at 12:01 PM on July 9, 2014 [1 favorite]
You have an optimistic view of the independence and right-thinkingness of city officials. Every single time I've ever heard of a US city trying to add more medallions it quickly gets shouted down. Given the general air of organized crime and corruption surrounding the taxi industry, I assume either threats or bribes are involved. (Citation needed; I'd love to see some hard data on the state of the medallion markets.)
I could argue either side of whether Uber surge pricing makes good economic sense. But it makes a terrible experience for consumers. It feels like price gouging, and very stiff gouging at that, and creates a lot of ill-will. And then mansplanations about supply/demand curves and the magical power of the free market and dammit I've already had 4 beers I just want to go home what do you mean it's gonna cost $100? It's a bad consumer experience.
I'm particularly curious Uber's chosen to expose surge pricing because it also gives customers a view of what it would mean if Uber succeeded in creating a monopoly on driver supply. An unregulated monopoly, with fees set at Uber's whims. There's a lot of competition and froth in the market right now and I think in general Uber's addition is a good thing. But if Uber charges $100 for a 15 minute ride now because it's raining, what's to stop them from charging $100 five years from now because they're the only option?
posted by Nelson at 12:01 PM on July 9, 2014 [1 favorite]
To paraphrase dave99, any racist with a car, some insurance and Uber can refuse you service. The medallion system prevents discourages it.
What? ignoring the fact that i've debunked the insurance thing a shitload of times, despite the accounts in this thread uber/lyft are a net improvement to me.
I used to live in a house that taxis literally would not come to. It was in the "not white" part of town, and across from a jail. Several times they showed up and just drove by and never stopped.
I've never had that experience with uber or lyft. I've completely lost track of the times i've called a cab and they NEVER showed up.
Anecdata wise, every single one of my friends has some story about a cab fucking off. I've only heard maybe one story of uber/lyft fucking up, and everyone i know has switched to those two completely exclusively. I know a lot of people, and they're mostly musicians/artists/general partiers who end up staying out late and taking hired cars often.
The general experience is almost exclusively "now i can actually rely on them to show up" when previously they would have been refused service.
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed
Yep. There are times, like for instance when i found out my house had been robbed during a hard-to-get-a-taxi time when i would have paid every spare cent in my bank account to be there right then, and eaten whatever random shit was in my kitchen and ramen until my next paycheck. Many times i would have been willing to pay $100 for a ten minute ride even if i couldn't really afford rather than be stuck wherever i was, and i had called the cab company 4+ times and they were getting annoyed with me. But an hour had gone by and no cab.
Pretty much, if you're standing in a 50 person line at an ice cream shop where they have $5 double scoops of ice cream. If someone walked up and offered you the same thing right now for $10, would you take it to not stand in line?
Why is offering that a shitty thing? the only argument i can think of is "because the $5 option isn't available", but the fact of the matter is the vast majority of people would rather just not wait in line for an hour. A service that always works is infinitely more valuable, and readily easier to count on as a sure fire thing than one which has flat prices but is randomly, and sometimes completely unpredictably fucking useless.
This is compounded by the fact that uber/lyfts "now" means now, whereas a taxi saying 5 minutes or 15 minutes means fucking nothing, and you have no way of seeing their location and verifying for yourself whether it means anything.
posted by emptythought at 12:27 PM on July 9, 2014 [5 favorites]
What? ignoring the fact that i've debunked the insurance thing a shitload of times, despite the accounts in this thread uber/lyft are a net improvement to me.
I used to live in a house that taxis literally would not come to. It was in the "not white" part of town, and across from a jail. Several times they showed up and just drove by and never stopped.
I've never had that experience with uber or lyft. I've completely lost track of the times i've called a cab and they NEVER showed up.
Anecdata wise, every single one of my friends has some story about a cab fucking off. I've only heard maybe one story of uber/lyft fucking up, and everyone i know has switched to those two completely exclusively. I know a lot of people, and they're mostly musicians/artists/general partiers who end up staying out late and taking hired cars often.
The general experience is almost exclusively "now i can actually rely on them to show up" when previously they would have been refused service.
If you need to get somewhere when the demand is highest, you either roll the dice and hope you can catch a cab, or you pay extra, and have access to an Uber, guaranteed
Yep. There are times, like for instance when i found out my house had been robbed during a hard-to-get-a-taxi time when i would have paid every spare cent in my bank account to be there right then, and eaten whatever random shit was in my kitchen and ramen until my next paycheck. Many times i would have been willing to pay $100 for a ten minute ride even if i couldn't really afford rather than be stuck wherever i was, and i had called the cab company 4+ times and they were getting annoyed with me. But an hour had gone by and no cab.
Pretty much, if you're standing in a 50 person line at an ice cream shop where they have $5 double scoops of ice cream. If someone walked up and offered you the same thing right now for $10, would you take it to not stand in line?
Why is offering that a shitty thing? the only argument i can think of is "because the $5 option isn't available", but the fact of the matter is the vast majority of people would rather just not wait in line for an hour. A service that always works is infinitely more valuable, and readily easier to count on as a sure fire thing than one which has flat prices but is randomly, and sometimes completely unpredictably fucking useless.
This is compounded by the fact that uber/lyfts "now" means now, whereas a taxi saying 5 minutes or 15 minutes means fucking nothing, and you have no way of seeing their location and verifying for yourself whether it means anything.
posted by emptythought at 12:27 PM on July 9, 2014 [5 favorites]
I use Uber frequently. Because of luck and connections, I get my rides heavily subsidized. I just used Uber this morning to get to work from a doctor's appointment. It was a fun ride in a Mini Cooper S.
I talk to the drivers all the time, and I have seen the application from both the passenger and driver points of view. Everything I am going to say I know from talking to drivers and people who have worked for Uber. I may be mistaken.
As far as I know, the drivers can only see a star rating for passengers, the same way a passenger can only see the star rating for the driver. Only Uber can see the comments.
Several of my drivers have been ex taxi drivers. Every single one of them has told me that working conditions are better under Uber, and so is the money.
The most common complaint from the drivers about Uber is that the company always sides with the passengers, a single bad review can get a driver punished. Punishments go from a few days suspension to being expelled from Uber. This can be really unfair for the drivers, they are not told how they failed the customer, and they can not appeal.
As a passenger, Uber beats any taxi company in San Francisco. I used to use Veteran's, they were the only company that would send a cab when I specifically requested a dog friendly driver to take my elderly dog to the vet. After many trips were I tipped well for all the dog hair, I got their VIP number. Veterans keeps notes on passengers and apparently I was a good customer. Veterans VIP number was pretty good, they would answer the phone quickly, give a good time estimate, and show up on time. Except if it was raining, there was a Giants game, there was a convention at the Moscone Center, or I happened to request a pickup anywhere west of Park Presidio or south of Cesar Chavez.
Regarding surge pricing, some times I work in an office that is about 15 miles from San Francisco in a horrible suburban office park. I always get the same driver, a woman who lives half a mile from the office, and who has a full time job. She logs in to Uber from 6 p.m. to 9 p.m. every week day, to get the office workers leaving late for San Francisco. She tells me that if there is surge pricing in SF after she drops me off, she will stay in the city for a few hours, otherwise she just drives back home and watches some Netflix.
When I lived in the Western Addition (good luck flagging down a taxi there), my regular driver was an Eritrean jazz singer. She would only work at night if there was surge pricing.
A few weeks ago when it was raining in the morning I got an estimated pick-up time of 15 minutes, then surge pricing kicked in and it dropped to 3 minutes. My driver was the limo driver for one of the embassies in Pacific Heights. If it is raining and surge price is active, he will drive people to work from 7 to 9 a.m. in his car, then go work the limo.
As Raymond Wolfinger said in 1969, the plural of anecdote IS data.
posted by Doroteo Arango II at 12:38 PM on July 9, 2014 [8 favorites]
I talk to the drivers all the time, and I have seen the application from both the passenger and driver points of view. Everything I am going to say I know from talking to drivers and people who have worked for Uber. I may be mistaken.
As far as I know, the drivers can only see a star rating for passengers, the same way a passenger can only see the star rating for the driver. Only Uber can see the comments.
Several of my drivers have been ex taxi drivers. Every single one of them has told me that working conditions are better under Uber, and so is the money.
The most common complaint from the drivers about Uber is that the company always sides with the passengers, a single bad review can get a driver punished. Punishments go from a few days suspension to being expelled from Uber. This can be really unfair for the drivers, they are not told how they failed the customer, and they can not appeal.
As a passenger, Uber beats any taxi company in San Francisco. I used to use Veteran's, they were the only company that would send a cab when I specifically requested a dog friendly driver to take my elderly dog to the vet. After many trips were I tipped well for all the dog hair, I got their VIP number. Veterans keeps notes on passengers and apparently I was a good customer. Veterans VIP number was pretty good, they would answer the phone quickly, give a good time estimate, and show up on time. Except if it was raining, there was a Giants game, there was a convention at the Moscone Center, or I happened to request a pickup anywhere west of Park Presidio or south of Cesar Chavez.
Regarding surge pricing, some times I work in an office that is about 15 miles from San Francisco in a horrible suburban office park. I always get the same driver, a woman who lives half a mile from the office, and who has a full time job. She logs in to Uber from 6 p.m. to 9 p.m. every week day, to get the office workers leaving late for San Francisco. She tells me that if there is surge pricing in SF after she drops me off, she will stay in the city for a few hours, otherwise she just drives back home and watches some Netflix.
When I lived in the Western Addition (good luck flagging down a taxi there), my regular driver was an Eritrean jazz singer. She would only work at night if there was surge pricing.
A few weeks ago when it was raining in the morning I got an estimated pick-up time of 15 minutes, then surge pricing kicked in and it dropped to 3 minutes. My driver was the limo driver for one of the embassies in Pacific Heights. If it is raining and surge price is active, he will drive people to work from 7 to 9 a.m. in his car, then go work the limo.
As Raymond Wolfinger said in 1969, the plural of anecdote IS data.
posted by Doroteo Arango II at 12:38 PM on July 9, 2014 [8 favorites]
This thread has taught me that taxis in the US are a COMPLETELY different beast to taxis in the UK, Hong Kong, and Denmark. You call a cab, you get a cab. You ask to get taken somewhere, you get taken there. The price is determined by the meter. I'm scratching my head trying to figure out how on earth you guys have ended up with so completely dysfunctional a system.
posted by Dysk at 12:41 PM on July 9, 2014 [4 favorites]
posted by Dysk at 12:41 PM on July 9, 2014 [4 favorites]
emptytought:
When I was learning to tend bar, I loved working for this bartender who could make us 5x the normal amount of tips on a Saturday night.
When the bar got crowded, with people lined 5 deep fighting for his attention, he would serve someone at the back. Someone at the front would usually complain very loudly. He would yell back 'That guy at the back always tips me $10, he gets served first. You tip me $10 I serve you next, you don't want to tip, he can serve you when it is your turn' and he would point at me. I saw people tip $50 to get 3 beers and a glass of water. After word spread around, the system would work very smoothly, and people seemed to find it fair.
posted by Doroteo Arango II at 12:44 PM on July 9, 2014 [5 favorites]
When I was learning to tend bar, I loved working for this bartender who could make us 5x the normal amount of tips on a Saturday night.
When the bar got crowded, with people lined 5 deep fighting for his attention, he would serve someone at the back. Someone at the front would usually complain very loudly. He would yell back 'That guy at the back always tips me $10, he gets served first. You tip me $10 I serve you next, you don't want to tip, he can serve you when it is your turn' and he would point at me. I saw people tip $50 to get 3 beers and a glass of water. After word spread around, the system would work very smoothly, and people seemed to find it fair.
posted by Doroteo Arango II at 12:44 PM on July 9, 2014 [5 favorites]
I'm scratching my head trying to figure out how on earth you guys have ended up with so completely dysfunctional a system.
It's locally regulated, so there are hundreds if not thousands of different taxi systems. They run the gamut from totally deregulated ones, to heavily regulated ones, to ones dominated by a single company.
posted by smackfu at 2:38 PM on July 9, 2014
It's locally regulated, so there are hundreds if not thousands of different taxi systems. They run the gamut from totally deregulated ones, to heavily regulated ones, to ones dominated by a single company.
posted by smackfu at 2:38 PM on July 9, 2014
Add to that, a lack of public transportation of the quality you get in the locations you mention plus a culture that emphasizes car ownership and driving.
posted by infini at 3:09 PM on July 9, 2014
posted by infini at 3:09 PM on July 9, 2014
It kind of depends on who takes the call, I think. The closer ones were slower for whatever reason.
posted by empath at 8:15 PM on July 9, 2014
posted by empath at 8:15 PM on July 9, 2014
I think Uber changed their estimation algorithm 2 or 3 months ago. Before that, it was really accurate. Now, even though there are more drivers, the ETA is always underestimates traffic.
posted by 26.2 at 8:56 PM on July 9, 2014
posted by 26.2 at 8:56 PM on July 9, 2014
You tip me $10 I serve you next, you don't want to tip, he can serve you when it is your turn' and he would point at me. I saw people tip $50 to get 3 beers and a glass of water. After word spread around, the system would work very smoothly, and people seemed to find it fair.
Just out of curiosity, did the people who didn't have $10 to tip on a $5 beer think it was fair? Were they just like, well, that makes sense, richer people should get to cut in front of me, that's what it means to be rich?
This is a real question.
posted by escabeche at 9:18 PM on July 9, 2014 [5 favorites]
Just out of curiosity, did the people who didn't have $10 to tip on a $5 beer think it was fair? Were they just like, well, that makes sense, richer people should get to cut in front of me, that's what it means to be rich?
This is a real question.
posted by escabeche at 9:18 PM on July 9, 2014 [5 favorites]
Would you grab your hat if it meant calling the fleet owner, going to the garage, getting the car (fixed cost), and then driving to where the money is (Manhattan, usually) when there's a good chance that it stops raining and the surge ends before you get there?
I don't know. I'm not sure how it works in NYC. I'm in Baltimore, so, as far as I know the Uberx drivers I'm using own their cars. There's no fleet of any sort that I'm aware of.
posted by josher71 at 9:29 PM on July 9, 2014
I don't know. I'm not sure how it works in NYC. I'm in Baltimore, so, as far as I know the Uberx drivers I'm using own their cars. There's no fleet of any sort that I'm aware of.
posted by josher71 at 9:29 PM on July 9, 2014
Uber driver starts running lights when a DC Taxi Inspector starts following him and he thinks it's the police.
posted by Buttons Bellbottom at 4:55 AM on July 10, 2014
posted by Buttons Bellbottom at 4:55 AM on July 10, 2014
Uber driver starts running lights when a DC Taxi Inspector starts following him and he thinks it's the police.
More details.
posted by josher71 at 6:14 AM on July 10, 2014
More details.
posted by josher71 at 6:14 AM on July 10, 2014
Just out of curiosity, did the people who didn't have $10 to tip on a $5 beer think it was fair? Were they just like, well, that makes sense, richer people should get to cut in front of me, that's what it means to be rich?
In truth, I think they simply understand that money makes things easier. Is it fair that people are wasting money on $5 beers when other people are hungry?
posted by 26.2 at 10:35 AM on July 10, 2014
In truth, I think they simply understand that money makes things easier. Is it fair that people are wasting money on $5 beers when other people are hungry?
posted by 26.2 at 10:35 AM on July 10, 2014
It's a very touchy subject. The trick is to charge a lot for a little more convenience. Then people literally can't afford to upgrade, so they are OK with suffering a bit.
posted by smackfu at 11:01 AM on July 10, 2014
posted by smackfu at 11:01 AM on July 10, 2014
escabeche:
This was the kind of place where there is a bouncer outside, a velvet rope, a line of people waiting and a VIP list. A very bribeable bouncer.
To be inside this place you already had to have gone through a douchebag-with-too-much-money pass filter.
I used dollars signs because I could not find the pounds sign. A pint of lager was 5 pounds, a basic cocktail 10 pounds, and it went up from there. Dudes (invariably dudes), would routinely spend 30 pounds or more on one of the signature cocktails, which came with a live orchid as garnish, in order to impress girls.
So yeah, I assume that the people who could not or did not want to tip 10 on a 5 beer would think that it is fair that people with more money get served first.
There was a pub literally next door that served pints of decent beer for 2 pounds, that is where I went to get my drinks.
Now if this had been a red cross depot dispensing potable water after a hurricane, I think some rich people would have gotten head stomped.
posted by Doroteo Arango II at 1:08 PM on July 10, 2014 [2 favorites]
This was the kind of place where there is a bouncer outside, a velvet rope, a line of people waiting and a VIP list. A very bribeable bouncer.
To be inside this place you already had to have gone through a douchebag-with-too-much-money pass filter.
I used dollars signs because I could not find the pounds sign. A pint of lager was 5 pounds, a basic cocktail 10 pounds, and it went up from there. Dudes (invariably dudes), would routinely spend 30 pounds or more on one of the signature cocktails, which came with a live orchid as garnish, in order to impress girls.
So yeah, I assume that the people who could not or did not want to tip 10 on a 5 beer would think that it is fair that people with more money get served first.
There was a pub literally next door that served pints of decent beer for 2 pounds, that is where I went to get my drinks.
Now if this had been a red cross depot dispensing potable water after a hurricane, I think some rich people would have gotten head stomped.
posted by Doroteo Arango II at 1:08 PM on July 10, 2014 [2 favorites]
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posted by vapidave at 1:50 AM on July 9, 2014 [11 favorites]