
Uber and Lyft offered to bail out taxi drivers; New York said no - JumpCrisscross
https://www.theverge.com/2018/8/1/17639656/uber-lyft-bailout-nyc-taxi-drivers-cap
======
eldavido
> The offer to bail out taxi drivers is an unforeseen twist in the years-long
> struggle by New York City regulators to contain the explosion of ride-
> hailing app drivers. City Council members have said they were partly
> motivated by the plight of taxi medallion owners, who have seen the value of
> their licenses plummet in recent years in direct correlation to the rise of
> ride-hailing apps. Six taxi drivers have committed suicide in the last six
> months, a grim reminder of the human costs of technological disruption.

This is such an upsetting characterization of the situation.

The city government sold a bunch of medallions to investors/"speculators"
(depending on your politics). Those medallions declined in value. Who should
bear that loss?

The entire situation was created by a government monopoly that never needed to
exist in the first place. Now that someone's figured out how to go around it,
all the investors in the manufactured, useless regulation are losing their
shirts.

It's really hard to feel bad for these guys. They were willing participants in
a system designed to line their pockets by fleecing ordinary people, choking
supply to ensure their prices were kept artificially high. They're basically
the OPEC of transportation. Do we feel bad because electric cars are
disrupting OPEC?

Lyft and Uber really aren't the bad guys here, at all.

~~~
40acres
I think you're being a bit harsh to the individual drivers here. My dad was a
yellow cab driver in NYC, lots of drivers, like my dad, were immigrants and
owning / renting out a medallion was seen as the equivalent to owning your own
home as a nest egg. I totally agree that taxi companies were colluding with
government to create regulatory capture that was deservedly busted by
innovation, but lots of families have been hurt by the drop in medallion
prices. Many drivers have committed suicide. I'm disappointed that NYC didn't
take the deal.

~~~
bogomipz
>"I totally agree that taxi companies were colluding with government to create
regulatory capture that was deservedly busted by innovation, but lots of
families have been hurt by the drop in medallion prices."

Why should investing upwards of a million dollars or more in a taxi medallion
be treated differently than any other large investment with real risks
involved? So when were profits from these medallions those were private but
now that there's risk it should be socialized?

~~~
gabrielrotbart
Because we can be better human beings by helping each other. Those private
medallion holders made a mistake by putting all their eggs in that one nest,
sure. But should the result of it be their lives ruined because "you lost the
game, screw you"?

I realize a reply to this can be that bail outs lead to increased risk taking.
I would still argue that it's better to risk the system and help those who can
not recover from this kind of loss.

~~~
bogomipz
>"Because we can be better human beings by helping each other."

There have been 3 restaurants on my block that have opened and failed inn the
last 18 months. Shouldn't we help them too by your logic? Should the city
council pass legislation?

>"But should the result of it be their lives ruined because "you lost the
game, screw you"?

Yeah that's a false equivalence. Empathy and bailouts are not the same things
at all. I can have empathy and be against a bailout and that doesn't amount to
me saying "screw you" to anyone.

~~~
bbeonx
No, of course not. Most restaurants fail. This is expected. There is a
difference between a restaurant failing and an industry going under. It really
isn't that ridiculous to help folks when their entire industry falls out from
under them.

If the restaurant industry collapsed next year I'd say the same thing for them
too. But there is a qualitative difference between ad hoc business failures
and a systematic change.

But I agree that bailouts != empathy. Still, bailouts aren't the only option,
and as a society it is in our interest to help a sector when it goes under. It
may happen to you or me next.

EDIT: I should specify that I'm speaking about owner-operated cabs.

~~~
bogomipz
>" There is a difference between a restaurant failing and an industry going
under. It really isn't that ridiculous to help folks when their entire
industry falls out from under them."

The "industry" is not failing. There are still 13,586 yellow taxis on the
streets in NYC[1] picking up and dropping off fares. And there no shortage of
New Yorkers on the street raising their right hand and intently scanning for
the "on duty" lights of yellow cars.

The "industry" is not the valuation of metal medallions bolted to the hood of
the cars. You seem to be conflating the too.

[1]
[https://en.wikipedia.org/wiki/Taxicabs_of_New_York_City](https://en.wikipedia.org/wiki/Taxicabs_of_New_York_City)

~~~
bbeonx
Semantics. What I _should_ have said is "when the valuation of a wide
percentage of peoples earnings and assets who belong to an industry suddenly
decreases from unforeseen outside forces caused by rapid technological
advances..."

Or how about "when about 18% of taxi drivers nest egg devaluates and their
retirement evaporates..."

To claim there is no difference between a restaurant failing and all
independent taxi cab drivers in NYC simultaneously taking a giant hit that
they did not see coming based on an (admittedly bad) policy of protectionism,
is intentionally missing the point and I would say is intellectually
dishonest.

Is a bailout the best way to fix this? I have no idea, seems like a relatively
low cost way to fix what the city did but these things are complicated. I'm
open to that discussion.

Are failure rates of the restaurant industry totally incomparable to this
singular situation? Most definitely, and any argument based on this is flawed
IMO.

------
andrew_
I still don't understand the fight with Taxi companies (aside from pure greed
and a desire to maintain a monopoly). The very first Uber I took was in a Taxi
in Chicago, which at the time had partnered with Uber. At the time I thought
Uber partnering with Taxi companies was brilliant. (I can't find any history
of why that came to an end - so if someone has a resource, that would be great
reading)

------
tedunangst
> The company has been calling Uber customers directly, asking them to send
> messages of support for Uber to their council members, according to
> BuzzFeed. Lyft has been emailing customers with its own appeal to “speak up
> for ridesharing.”

If some company ever called me up to rally political support, that'd be the
immediate end of any business. Ever.

~~~
jsonne
Anecdotally Lyft did this years ago in Denver. My friend was called because
she was a top 10% Lyft user and was asked to come protest because Colorado was
thinking regulating ride sharing services in a way they didn't like.

~~~
nadezhda18
Did your friend go?

~~~
jsonne
No. She felt it was weird and invasive.

------
cwmma
Taxi medallion owners not NOT drivers. Most drivers would pay a fee to the
owner and rent the medallion for the day.

~~~
bbeonx
Correction: Most taxi medallions are not owned by drivers. There are certainly
drivers who own their own medallions (18% as of 2012). This is a non-trivial
sector

------
myrandomcomment
Uber and Lyft solved the issue for rides to and from the outer boroughs, full
stop. Lets have the Taxi drivers solve that issue and then there would be no
need for Uber and Lyft.

~~~
Spivak
Or, hear me out, let's have ride sharing companies continue to solve those
problems while abiding by some, at least I think, basic regulations to make
sure drivers aren't stuck in poverty. I do think it's silly to cap the number
of drivers when a wage floor is a more direct way to achieve the gov't's goal.

This isn't an all or nothing thing.

~~~
WalterSear
If medallion renters had to do the same thing, we wouldn't be having this
discussion, because they would capitulate.

------
asah
Sigh... stupid politics... caps (or equivalent) are a mathematical necessity
in NYC: the city streets can only handle a very limited number of vehicles.
After that, congestion becomes a classic tragedy of the commons.

~~~
MR4D
Your comment made me think about the tragedy of the commons in a different
light....

Looked at another way, smaller buildings are a necessity. From that point of
view, the NYC politicians allowed people to cram too many buildings in too
small of a space.

Or, maybe there are not enough roads. NYC could go double or triple-deck
roads. It would be ugly as heck, but would ease the problem.

Not disagreeing with you, just pointing out that the root cause of the tragedy
of the commons is that each person is fine with such a small space. If we made
a minimum amount of space that people could own/rent/live in, then the problem
would never exist. (for instance, Kansas doesn’t have this issue)

~~~
brainkim
Or, maybe you could drop the expectation that urban life involves riding
around in 4000 pound climate-controlled personal vehicles, and use public
transportation/get a goddamn bike.

------
freehunter
It's a bit of a misleading headline: they weren't offering a bailout, they
were offering to exchange money for services from the city. In any other world
that would be a bribe. Lyft said "it's a bit astonishing to us" because I
guess they're used to their bribes being accepted.

If anyone thinks "bribe" is too strong of a word, they were offering $100m "to
help medallion owners" in exchange for the city dropping a proposal that would
limit the number of Lyft/Uber drivers and set a minimum wage for the drivers.
Again, in any other world this would be called a bribe in exchange for making
favorable laws. In this world I guess it would be called lobbying.

~~~
JumpCrisscross
> _they were offering $100m "to help medallion owners" in exchange for the
> city dropping a proposal that would limit the number of Lyft/Uber drivers
> and set a minimum wage for the drivers_

The purported problem is taxi drivers bought medallions. The medallions then
dropped in value. (Put aside, for a moment, that most NYC medallions are owned
by large corporations.)

Uber and Lyft are saying "instead of capping our numbers to help the taxis,
we'll help you buy back the taxis from underwater medallion owners." That is
good policy. Extending the medallion system to ride sharing freezes market
shares. That's a handout to Uber, who have recently been bleeding share to
Lyft and Juno. It's also stupid in the midst of a broken subway system and
ahead of the L train shutdown.

Of course, none of this matters. This bill's purpose is to hand out cash. Our
mayor is in the medallion owners' pockets [1]. And apparently they've also
been doling out money to this bill's sponsors on the City Council. The hope is
this passes in August while nobody is looking. From ground level, it seems
they're right.

[1] [https://nypost.com/2014/05/17/taxi-industry-gave-de-
blasio-o...](https://nypost.com/2014/05/17/taxi-industry-gave-de-blasio-
over-550000-for-campaign/)

~~~
lukeschlather
The wage issue is a bigger problem. If Uber and Lyft control the taxi industry
in NYC, and it's impossible for their drivers to earn minimum wage, that's
something the government needs to fix.

~~~
JumpCrisscross
> _The wage issue is a bigger problem_

It's a _huge_ problem. And the minimum-wage proposal is a good idea. (I'd go
further and extend it to taxi drivers.)

There is no need--apart from paying off the mayor and Speaker's cronies--for
it to be tied to the cap. (I even believe they're presented as separate bills,
though someone might have later combined them.)

~~~
pteredactyl
Why is the minimum-wage proposal a good idea?

------
qop
<parody> Horse and carriage drivers offered jobs in Ford factory, Horseback
Union said no!

Six horse carriage drivers committed suicide in the past year. </parody>

Most taxis are horrendous. They barely speak English or have some sort of
hygiene issue or try and take me on some wacky route like I don't live here,

With uber starting to do stuff like upfront fares and uber pool, it's pretty
much over with. I've seen a LOT of new yorker trends over the past two
decades, and I can safely claim that Uber has reached an indispensable point
for the average upper class new yorker.

The last linchpin imo for uber will be something like uber pool with better
dedicated routes. Like a bus, but without all the people that ride the bus.
That will be awesome.

~~~
romwell
>The last linchpin imo for uber will be something like uber pool with better
dedicated routes.

They already launched a feature called Express Pool in some areas (at least
the Bay Area) which does something like that: it's like Pool, but you might
need to walk a little bit from/to your final destination. The routes aren't
fixed, but the spirit of the idea is the same.

~~~
qop
I haven't seen express pool here yet. Maybe I wasn't selected or maybe it's
not here yet.

------
dang
Url changed from
[https://www.google.com/amp/s/www.theverge.com/platform/amp/2...](https://www.google.com/amp/s/www.theverge.com/platform/amp/2018/8/1/17639656/uber-
lyft-bailout-nyc-taxi-drivers-cap), which points to this.

Please don't post urls that redirect; it's important that HN show the real
domain.

~~~
JumpCrisscross
> _Please don 't post urls that redirect; it's important that HN show the real
> domain_

Sorry–shall do.

