

Neelie Kroes responds to taxi protests in Europe - Eduard
http://ec.europa.eu/commission_2010-2014/kroes/en/blog/my-view-todays-taxi-protests-and-what-it-means-sharing-economy

======
ddalex
I think it is missing the point - the protests are not against digital
innovation, as much as Uber would like to point so. There are countless taxi
applications out there that will allow you to get a taxi at the press of a
button - nobody is having a beef with that.

Uber and the other apps provide the same service - you get a car to transport
you from A to B and you pay for the service proportional with the distance and
time you sit in that car.

The essential difference between Uber and the other apps is that Uber uses
unlicensed drivers, while the other apps use licensed drivers. This creates a
big handicap for the regulated taxis. Uber skirts around the law to avoid
regulation, and the difference in cost of operation enables them to "win".

The playing field is simply not fair and not equal to all players. Either we
start regulating Uber drivers as equal to other taxi service providers,
requiring expensive licences, or we eliminate regulation for all drivers.

Let's not make a technological poster child out of Uber's skirting of laws.

~~~
splintercell
> Either we start regulating Uber drivers as equal to other taxi service
> providers, requiring expensive licences, or we eliminate regulation for all
> drivers.

So why aren't the Tax drivers protesting against the regulation? Their
decision to protest tells you where they see more benefit.

You may keep on saying that this is not about their stance against digital
innovation, but the fact is that its all about economics.

Taxi cabs in most major cities run on a Medallion system, its an artificial
limit on the number of cabs that can exist in the city(sometimes done because
of lobbying by the existing cab owners, sometimes to reduce the number of cabs
in the city). This restriction causes the price of Medallion to be
artificially higher than it should be. For instance in NYC, Medallions are now
sold for upto $1 million.
[http://www.nytimes.com/2013/11/15/nyregion/1-million-
medalli...](http://www.nytimes.com/2013/11/15/nyregion/1-million-medallions-
stifling-the-dreams-of-cabdrivers.html?_r=0)

Why do people pay $1 million to own a cab? Because this is the aggregated
value they estimate to be, based on the number of years they will operate the
cab for(and the profit they will make from it). This is precisely why most cab
owners in the NYC are immigrants who can barely speak English, because only
they have the savings to own and operate a cab.

Imagine you having spent $1 million to acquire a cab medallion, would you
support any measure to increase the number of cabs in the city? Nope! That's
precisely why all measures against increasing this number is heavily resisted
by the cab owners. The value of their capital asset goes down if the number of
cabs goes up in the city. You'd think that they would be ok with bringing Uber
under the same medallion system but that position would be completely
contradictory to their economic interest. They have, in past resisted increase
in number of medallions, so that makes no sense for them to even remotely
support bringing Uber under the same licensing system.

This is also the reason why the slave owners of the south resisted abolition
of slavery. A slave stops being a 'labor' input in your profit and loss
calculation, and becomes a capital asset. Its value is derived from the total
earnings anticipated to be made in the lifetime of the slave. Consider it like
this, if you are a programmer who can make $100K a year, and has a working
life of 20 years, then a slave owner would be willing to pay you upto $100K*20
= $20M to posses you, of course he wouldn't wanna pay $20M, because then he
would make no profit, plus there is a risk potential involved, running away or
death, so like $10M. Now if a slave owner pays $10M to acquire you then there
is no way he would wanna set you free until he at least recuperates that cost.

~~~
king_jester
> Taxi cabs in most major cities run on a Medallion system, its an artificial
> limit on the number of cabs that can exist in the city(sometimes done
> because of lobbying by the existing cab owners, sometimes to reduce the
> number of cabs in the city). This restriction causes the price of Medallion
> to be artificially higher than it should be. For instance in NYC, Medallions
> are now sold for upto $1 million.
> [http://www.nytimes.com/2013/11/15/nyregion/1-million-
> medalli...](http://www.nytimes.com/2013/11/15/nyregion/1-million-medalli..).

The medallion program in NYC was recently expanded with the introduction of
green cabs that are official NYC cabs that service outer boroughs. The
Bloomberg administration fought a court battle over the medallion expansion
and won. Medallion systems are not inherently bad, but they can be used as a
way to stifle better service (just like anything).

> Why do people pay $1 million to own a cab? Because this is the aggregated
> value they estimate to be, based on the number of years they will operate
> the cab for(and the profit they will make from it). This is precisely why
> most cab owners in the NYC are immigrants who can barely speak English,
> because only they have the savings to own and operate a cab.

Prior to the medallion expansion, most medallions were actually owned by firms
and not individual cabbies. The reason why most cabbies are immigrants is not
because they are loaded and can buy a million dollars of value outright. Also,
most cabbies do speak English to some capacity.

> Imagine you having spent $1 million to acquire a cab medallion, would you
> support any measure to increase the number of cabs in the city? Nope! That's
> precisely why all measures against increasing this number is heavily
> resisted by the cab owners.

This is true, firms worried about value loss of their medallions when more
would be issued. However, it is important that cab MEDALLION HOLDERS, not
cabbies, were most opposed to the change as they had the most to lose. In NYC,
cabbies were also opposed, but mostly because they worried the terms of their
medallion access would get worse and leave them poorer.

> You'd think that they would be ok with bringing Uber under the same
> medallion system but that position would be completely contradictory to
> their economic interest. They have, in past resisted increase in number of
> medallions, so that makes no sense for them to even remotely support
> bringing Uber under the same licensing system.

In the case of NYC, Uber would most certainly want to avoid being a part of
the medallion system as that would effectively regulate their business and
drivers. Uber seeks to avoid regulation while providing private cab service,
not to be integrated into regulated cab systems.

> This is also the reason why the slave owners of the south resisted abolition
> of slavery. A slave stops being a 'labor' input in your profit and loss
> calculation, and becomes a capital asset. Its value is derived from the
> total earnings anticipated to be made in the lifetime of the slave. Consider
> it like this, if you are a programmer who can make $100K a year, and has a
> working life of 20 years, then a slave owner would be willing to pay you
> upto $100K*20 = $20M to posses you, of course he wouldn't wanna pay $20M,
> because then he would make no profit, plus there is a risk potential
> involved, running away or death, so like $10M. Now if a slave owner pays
> $10M to acquire you then there is no way he would wanna set you free until
> he at least recuperates that cost.

Please don't reduce people who were slaves to value objects, this is extremely
problematic and dehumanizing.

~~~
splintercell
> Please don't reduce people who were slaves to value objects, this is
> extremely problematic and dehumanizing.

I KNEW IT, someone was going to not understand what was written and start
objecting to how it was written.

You do understand that I am trying to describe that people are treated like
objects under slavery. How do you describe something bad by not describing it
like how it is?

~~~
king_jester
I understood what you were saying, but that slave owners consider person
objects has no merit in this discussion and doesn't provide evidence for
anything you said.

------
fidotron
This is really quite a remarkable response, and in my view entirely correct.

"More generally, the job of the law is not to lie to you and tell you that
everything will always be comfortable or that tomorrow will be the same as
today."

That's possibly the single biggest unstated divide in modern western society,
where a significant proportion of the population do think they can legislate
complete stability for themselves into existence, and that's one of the first
times I've ever seen it so bluntly shot down. A lot of people just want the
quiet easy life, and get ferociously angry when they perceive someone else as
rocking their boat.

~~~
antihero
But then, contrast this with the Uber CEO's trying to get rich by essentially
destroying the livelihoods of a huge amount of people. Ethics does play a part
in this, and obviously what he says is true, but it's only true because there
are so many greedy people out there that put their own desires over others'
needs.

Disrupting markets may be sexy, but you always have to think of the
consequences.

I was discussing the idea with a friend about buying a company in order to
grab their customer base, which he thought was a fantastic idea until I
pointed out that it utterly fucks over the employees of that company. Sure, if
his company was good enough, he'd win eventually, but you can coexist and do
things in a way that aren't utterly vicious and unethical.

There's a middle way, which is allowing evolution but in an ethical,
considerate manner.

~~~
namesbc
Or rather think about all of the new drivers enabled by Lyft, Uber, etc. These
new drivers now have a livelihood that wasn't possible under the medallion
taxi cartel.

~~~
shiven
Precisely!!! Why does no one talk about the Uber drivers who are now making
money and have gainful employment?

Everyone seems to imply as if it is _only_ Uber's CEO who is getting rich by
taking away the taxi driver's livelihood, as if the CEO drives all the Uber
vehicles himself!

------
norswap
It's nuanced, not peddling to any one camp and shows deep understanding of the
issues at hand. I wish more politicians were like Neelie Kroes.

~~~
tormeh
She's my favorite politician.

