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UberCab to disrupt the Taxi/Limo business (techcrunch.com)
116 points by yish on Aug 31, 2010 | hide | past | web | favorite | 103 comments



Sound like a nice idea, but unfortunately taxis are a regulated industry in most major cities (e.g. NYC, Boston, Chicago). The difference between a taxi and non-taxi are usually that a taxi license or medallion is required in order to legally stop for somebody hailing down a cab on a street.

If this service became at all popular, it is very likely that cities would immediately include "mobile hailing" as also requiring a license. The entrenched interests of the taxi companies are simply too big (and they have the political clout) to let this one slide under the radar.


Medallions are a conspiracy against the public, especially the poor and minorities, who both are disproportionately refused cab service and prevented from lawfully pursuing a value-creating occupation in their communities which requires only modest capital and no special training.

See also hairdressing regulations and a host of others.

I could be persuaded there exists an optimum amount of regulation for compensated car rides north of that for uncompensated car rides, but medallions have to go. With market values in the six figures though, good luck: holders have solid incentives for corruption like their lives depend on it, but the average citizen just gets minority overcharged, and the worst affected do not vote or matter in most political calculuses.


Disagree. The policies behind medallions may be stupid and unfair, but their existence provides a mechanism of accountability (you can lose them, and they're hellaciously expensive) that doesn't exist with iPhone dispatch.

It doesn't surprise you that cab drivers in Chicago basically never drive you to random destinations, or change fares midway through the ride? The goodness of cab driver hearts isn't what's preventing it.


I do more of my traveling from airport to suburbs than inside the city, so I get to use a car service. It is pretty simple: I call American Taxi (by way of Bangalore), they send me an Eastern European immigrant with a car, and he whisks me home for the published flat fee.

Their incentive to not screw me is that they value my continued custom (and chargebacks are a beast). His incentive to not screw me is that he values his cell phone continuing to buzz with new fares. They transparently operate in a low-trust environment: there are cards in the back of the back of the car for who to call for a refund in event of a dispute.

Putting this on an iPhone makes it geekier, but does not appear to change the threat model. No medallion, and pretty close to a technolibertarian paradise. I feel the need to illegalize something to wipe that smug look off their faces. :)

Sadly, they are legally prohibited from offering exactly the same service if both endpoints are within Chicago proper.


Putting it on iphone allows UberCab to collect a profile for all drivers and customers and make that profile value (ratings) publicly available for future riders and clients. Transparency is good but recorded transparency made publicaly available for future decisions becomes powerful.


This drastically idealizes UberCab profiles. That's easy to do now when UberCab is largely an abstraction, and the sole provider. It gets a lot shadier when UberCab is one of 10 companies doing this, when the market segments along lots of other attributes (high-end and low-end providers &c), and when it starts to become worth it to game profiles.


When you say "by way of Bangalore", do they have their call center in Bangalore? /just curious how many taxi dispatch services do this.


Yes.


Putting it on the iPhone scales the process up. Some things work fine at Patrick McKenzie scales, but not so fine at 40 fares per day per cab. There is immense competition for airport fares (it's one of the big problems with cab service in SF) and more incentive not to play games. The same can't be said of random fares on city streets.

The only time I've ever been screwed with by a cab driver was with an unlicensed car service.


American Taxi dispatches forty thousand fares a week. They're a wee bit bigger than me.


Come on, Patrick. American Taxi is pretty much the cab company for all of the Chicago suburbs. You think they do 40k fares to/from ORD? That's 500 fares an hour.

There's a difference between airport taxi service by chauffeur-licensed drivers dispatched by a branded cab company (with something to lose if drivers misbehave) and "I signed up with 1 of 5 different companies that dispatch cabs with iPhones".

I don't have prove that the Chicago medallion system is sensible; I'm only objecting to the notion that there is no valid concern behind them other than for-profit restraint of trade. There are absolutely valid concerns behind medallions. Go to an NYC airport or outside Penn Station and find an unlicensed cab; take 10 drives, and tell me how many of them try to screw you over. Do the same thing with medallion drivers; none of them will.


In NYC, my experience with unlicensed cabs at airports is limited, but every time they did try to take advantage.

However, I had much more experience with unlicensed cabs in Washington Heights (north end of Manhattan, where licensed cabs refuse to cruise around to get business) and I never remember anyone trying to rip me off. Much of the time this wasn't with calling any specific company, just flagging down (illegally) whichever car was passing.

I think there's just too much money to be made from unsuspecting tourists at NYC airports.


Medallions serve to limit who is allowed to provide the service. There is no need for this limitation in order to ensure honest service.

For example, cabs could earn (and risk losing) a "Good Cabdriving Seal". There's no need for the quantity of such seals to be artificially limited: they could be unlimited, but only awarded to those that prove worthy.

And while we're at it, the agency doing the certification need not be a government agency at all. Why not Good Housekeeping, or Underwriters Laboratories, or Better Business Bureau?


Only the government has authority to do something to the cab driver, though. The Better Business Bureau can't tell you to stop driving your cab.

The medaillion system is weird, but it works in new york.

The people who think that the invisible hand of the market would improve cab service are awesomely naive. The reason why cabs aren't fucked up in NYC is because of all the regulations, which can only be enforced because the cabbies have something to lose (the mediallion). If there was no government interference, cabs still wouldn't take credit cards, they wouldn't pick up non-white people, they wouldn't drive you to Brooklyn, they would form their own cabal and eventually rip out their meters and just make up whatever price they wanted to charge you, once you got there.


You're only saying that they work in NYC because you're taking for granted all of the failures. For example, how many times have you said "where's a cab when you need one?"?

because of all the regulations, which can only be enforced because the cabbies have something to lose

You think that the loss of the "Good Housekeeping Seal of Approval", or "UL Certification", or the like is nothing? Don't you think that potential customers would quickly learn to look for that emblem on a cab?

If there was no government interference, cabs still wouldn't

Nonsense. You're just making stuff up, without the slightest evidence. Do you really believe that cab customers would turn away paying customers just because they're not white? And even if they did, that would just open an opportunity for a minority-catering company to make a killing.


For example, how many times have you said "where's a cab when you need one?"?

In Manhattan? Never. (but I've never tried to get a cab in Harlem or north of that)

You think that the loss of the "Good Housekeeping Seal of Approval", or "UL Certification", or the like is nothing? Don't you think that potential customers would quickly learn to look for that emblem on a cab?

Are you serious? The only thing people look for is if the cab is yellow.

Nonsense. You're just making stuff up, without the slightest evidence.

I'm not just making stuff up, those are all things that cab drivers used to do until the city told them to stop doing those things.

Do you really believe that cab customers would turn away paying customers just because they're not white?

Yes.

And even if they did, that would just open an opportunity for a minority-catering company to make a killing.

Do you live in New York? There already are car services, livery cars and gypsy cabs.


Actually, airport fares aren't that great and they are getting worse for drivers (fee changes and cops on 101). But for the drivers who don't want to work much it's fun to hang out there. The problem with cabs in SF isn't SFO, it's simply there aren't enough cabs on Thursday to Saturday nights.


Last time I had this discussion with a cab driver in SF, he explained that there's some issue with the way cabs are dispatched in SF that pulls drivers to SFO, and that SFO is overserved at the expense of the city. I wish I could remember the details.

It wasn't "cabs are lazy".


Ugh, don't get me started on SF cabbies. They are not only licensed but regulated by price. They also pretend to not know where anything is and will drive around to find your destination, hiking cab fares up accordingly. And, because you may not know the lay of the land (and can't understand their likely intentionally-thick foreign accents), you can't exactly tell them where to go. I had one that claimed to not know the best way to Coit Tower from the Ferry Building, so _he asked me_. Seriously.

It's a big rip-off and I am thankful whenever I visit SF to have a zipcard. Now I only pay BART to get me from SFO to (near) our vacation rental. If ubercab can provide fares without that runaround, I'm all for it.


> It doesn't surprise you that cab drivers in Chicago basically never drive you to random destinations, or change fares midway through the ride? The goodness of cab driver hearts isn't what's preventing it.

A voluntary medallion scheme would prevent that; the city government could issue medallions to those who fitted whatever standards it chose to lay down.

And customers would be free to choose to use a medallioned or unmedallioned service.


Don't get me wrong; the city medallion systems are evil. I'm just saying they're a necessary evil. If we could replace them with something sane, I'm onboard!


You're quick to dismiss all prospects for a mobile-device-assisted reputation system based on v1; assume instead that it iterates a number of times and eventually chiefly helps the dispatchers identify bad actors, rather than customers.

With digital cameras and other low-cost person and location tracking technologies, it's not easy for drivers to take riders on any ride other than that which was contracted, nor for providers with bad reputations to borrow the identities of others. Branded quoted dispatching has returns to scale -- perhaps it's even a natural monopoly -- and incentives for self-policing. So bad actors can't just hop to another of multiple dispatchers and get the same amount of business.

Floating rates and open entry can restore service to areas that regulated rates sometimes cause to be unserved -- because they're comparatively hard to get to or dangerous, and there's plenty of business elsewhere.

And finally, for all the supposed protections provided by regulation, a city with strict regulations will also have a bunch of gypsy and counterfeit cabs -- and in SF, if local media reports here are to be believed, many of these are indistinguishable from the 'real' thing, even by most police/enforcers. You get in one -- and you get indistinguishable service as from other cabs, because the operators want to be cabbies, not robbers. And yet -- iPhone dispatching could give out a 1-time single-word-password more secure than any cab 'dress'. So if this were really something to be scared of, a branded iPhone dispatcher can provide more assuarance than the city medallion authority.

There is a valid concern at the heart of taxi licensing -- but it long ago grew into primarily a cartel, using that original justification to enrich incumbents, doing more damage than benefit. And, the restricted medaliion program is a solution from another era; let us try to get the same benefits with new tools, and see how it works.


Try it out in San Francisco. San Francisco cabs are horribly broken.

Unfortunately for your argument, while the medallion system does unjustly restrict competition for cab driving jobs in Chicago and NYC, it does not in fact appear to harm consumers. Cabs work in Chicago and NYC. The potential harm of deregulating and devolving controls to unproven technology far outweighs the benefit.


Totally agree SF is where this should be tried first -- it's the US city where cabs are both needed and broken, and smartphone adoption is very high. And the great thing is: that's where UberCab is in fact starting.

However, I expect that if the service becomes popular, both the cab and MUNI lobbies will attempt legislative sabotage, and the SF supervisors are so enamored of paternalistic reasoning it's a real threat to the business.


A very simple replacement system: unlimited medallions will be issued. The cost of a medallion is the cost of policing 1 driver (e.g., 1 random inspection per month, background check, car safety, etc) + 15% profit for the city. Prices will be set at market rates, but must be fully disclosed to passengers before the ride.


How is it a win for consumers to let taxi fare rates float? Taxis are very cheap (many reasonable drives inside the Chicago Loop are within 100% of what it would cost to take the CTA). Floating rates would almost certainly rise.

If a regulatory change harms consumers, what's the point of deregulating?

San Francisco might benefit from deregulation, because there are political problems and structural breakages in their system. But the Chicago and NYC cab systems work pretty well right now as far as I can tell.

Incidentally, while I agree that medallion caps are anticompetitive and an artifact of old price-fixing schemes, they have a beneficial effect of making it expensive to operate a licensed cab, which creates incentives for cab operators to avoid some negative externalities of their business (like running people down, or operating blatantly unsafe vehicles, etc).


Allowing fares to float while maintaining the current artificially restricted supply will cause prices to rise. Allowing increased competition will almost certainly lower costs.

Taxi revenues are currently $91k/year in NYC. Breakdown: $18k medallion, $50k labor, the rest is maintenance/insurance. If labor costs were reduced to $35k/year due to competition (taxi driving isn't exactly high skill labor) and medallion costs were cut in half, that's a 25% reduction in taxi cost.

http://www.nyc.gov/html/tlc/downloads/pdf/presentation.pdf

I think my proposed $9k/year would be sufficient to pay for taxi inspections to get rid of blatantly unsafe vehicles. As for running people down, current incentives not to do that seem sufficient. It's no more a problem to be run down by a taxi than by a Dominos driver, who has the same incentives as a taxi driver. In fact, Michael Q. Lateforwork has even less incentive than any taxi driver to not run people down - he won't lose his job for doing so.


Michael Q. Lateforwork is probably not economically marginal in the same way most cab drivers are, so the incentives are not the same.

Similarly, most people who deliver pizza are not career pizza delivery drivers. A pretty big chunk of them are students. Their incentive not to wreak havoc isn't the loss of their pizza job, it's in not screwing up their lives and bankrupting themselves.

That said, you have a good point. And I'm not HN's official advocate for taxi medallions. I just want to point out that while it certainly wasn't the intention of the medallion system, or even its primary effect, artificially-limited medallions do create a scarcity value to them that incentivizes drivers to play nice with the rest of the system.

There are plenty of unlicensed cars out there, and there is a clear difference in how reliable they are.

I wouldn't vote against any sensible replacement scheme, and yours sounds sensible.


So, just so I follow, your proposal is to impoverish cabbies and drive the skill level of the average driver down as low as it can go while increasing the number of vehicles on the streets in a city where it already takes an hour to go a mile?

May that you never be in charge of taxi service.


Yes, my proposal is to reduce the wages of current cabbies, increase the wages of future cabbies (the people currently making $25k/year, or perhaps who are unemployed, who would take jobs as cabbies at $35k/year) and lower the cost of taxis to consumers.

As for the number of vehicles, that's an issue not primarily caused by cabbies. A congestion charge (levied on cabbies and drivers alike) and eliminating free parking seems like a solution to that - it works pretty well in London.


Yes, my proposal is to reduce the wages of current cabbies, increase the wages of future cabbies (the people currently making $25k/year, or perhaps who are unemployed, who would take jobs as cabbies at $35k/year) and lower the cost of taxis to consumers.

Which in NYC, with its existing low cost subway and bus alternatives, basically translates to "helping rich people by eliminating the lower-middle-class jobs their fares currently support". You would expand the pool of people who choose cabs over the subway down from the top a little bit while pushing the actual service workers further out from the city.

As for the number of vehicles, that's an issue not primarily caused by cabbies.

Perhaps because the current medallion system restricts the number of operating cabs?

A congestion charge (levied on cabbies and drivers alike) and eliminating free parking seems like a solution to that

I'm all for a congestion charge (though my version actually wouldn't apply to medallioned cabs) and eliminating free parking. But you said the point was to lower costs for consumers by increasing competition. We're getting to the point where we actually have to do the math to see where everything falls, but if you don't tweak the parameters right, you could easily find yourself in a situation where consumers are right back to paying today's fares (because there aren't actually more cabs on the road) but instead of the money going to the cabbies, it's going to the city in fees.

it works pretty well in London.

London, where cab drivers are probably the best paid, most skilled, and most stringently regulated in the world?


You previously criticized me for wanting to "increas[e...] the number of vehicles". Now you are criticizing me for wanting to "eliminat[e...] lower-middle-class jobs". How can a proposed policy simultaneously increase the number of taxis and decrease the number of jobs? Will the new taxis drive themselves?

As for doing the math, scroll up. I gave you numbers, and showed that even making fairly generous assumptions, there is a LOT of rent being extracted from the current system.

Perhaps because the current medallion system restricts the number of operating cabs?...London, where cab drivers are probably the best paid, most skilled, and most stringently regulated in the world?

Fun fact: there are about 250 million cars in the US, and about 250 thousand taxis. But I'm sure all congestion problems are caused by the taxis - thank god for limited numbers of medallions.

http://en.wikipedia.org/wiki/Passenger_vehicles_in_the_Unite... http://www.schallerconsult.com/taxi/taxidriverreport.htm


I specifically said "lower-middle-class jobs", and you're pretending I just said "jobs". Of course I meant that you were replacing fewer higher paying jobs with more lower paying ones.

I see nothing in your previous numbers showing how you do or don't keep the benefit to the consumer after throwing in a congestion tax, which is what I said we needed to do the math for.

Fun fact: there are about 250 million cars in the US, and about 250 thousand taxis. But I'm sure all congestion problems are caused by the taxis - thank god for limited numbers of medallions.

How many of those 250m cars are in NYC, and how many of those 250k taxis are? And at what point did I suggest that all congestion problems were caused by taxis? I even explicitly said I would support a congestion tax for other kinds of traffic as an orthogonal solution.


There are about 13,000 yellow cabs in all of NYC. The GWB and Lincoln tunnels have traffic of 320,000 and 120,000 vehicles (respectively). I'm too lazy to look up the number of people driving from non-NJ locales.

Also, I didn't realize that the 37'th percentile of income (36'th percentile in NY [1]) did not count as lower middle class (or just plain middle class). My mistake.

If the congestion tax costs less than $24,000/year/cab, consumers still pay less for a taxi.

[1] http://www.city-data.com/income/income-New-York-New-York.htm...


There are about 13,000 yellow cabs in all of NYC.

Which is the number set by the medallion system. My original point in this line of argument was that one of the main reasons cabs don't contribute to congestion in the city is because the number of cabs allowed in is capped. You're the one who wants to make that number bigger.

Also, I didn't realize that the 37'th percentile of income (36'th percentile in NY [1]) did not count as lower middle class

The labels are flexible depending on who's drawing the boundaries, I'm sure. The point is that I wasn't contradicting myself when I said your plan would both cut a certain class of jobs and increase traffic, I was simply saying that you're replacing fewer higher-paying jobs with more lower-paying ones. Where we disagree is that I think in this case that's equivalent to giving rich people a break and forcing more of the city's service workers to live further away, and I assume you don't.

If the congestion tax costs less than $24,000/year/cab, consumers still pay less for a taxi.

You're taking the savings from the medallion and labor costs that you posited above and assuming they'd be passed directly to the consumer, but that's overly simplistic. More competition means marketing costs go up, which drives the fares back up a bit. The congestion tax is presumably convincing fewer people to drive to work, which increases the demand for cabs, which drives the fares back up a bit more.

The point was not "you are wrong about consumer prices going down", it was "you have to start modeling the problem more carefully to have a meaningful conversation about it". You're probably right, consumers would save money, but again, given who the consumers are (oversimplifying: rich people), I don't necessarily see that as a good thing when it comes at the cost of cabbie pay.


My original point in this line of argument was that one of the main reasons cabs don't contribute to congestion in the city is because the number of cabs allowed in is capped.

Even if the number of cabs increases by 5x (i.e., customers are underserved by a factor of 5x), it will still be a small number.

As for the distributional benefits, yes. I'm willing to harm the wages of a middle class cabbie if it helps a poor unemployed person. I'm kinda progressive that way.

You're taking the savings from the medallion and labor costs that you posited above and assuming they'd be passed directly to the consumer, but that's overly simplistic.

I don't think so. Consumers pay the average taxi $90,000/year. I'm proposing a change in which consumers would only pay that taxi $66,000/year.

By the way, I think we should reverse your argument. You seem to favor creating artificial shortages in low skill fields to drive up wages. Since this is presumably good policy, perhaps we should expand it. How about waiter licenses for high end restaurants (which primarily serve the rich)?

(I ask about expanding this policy to other sectors because I think status quo bias is the main reason you support the status quo.)


How about waiter licenses for high end restaurants (which primarily serve the rich)?

High-end waitservice is hardly a low-skill field. Good waiters are well compensated, and restaurants compete for them almost like technology companies compete for programmers. And restaurants themselves are completely different businesses than taxis. Each additional taxi added to the city is more or less identical to the taxis that were there before, whereas restaurants are highly differentiated from each other. You can't predict the marginal payout of an additional restaurant.

But with that said, restaurants are regulated through zoning and health ordinances. You can't just start a restaurant out of your apartment or set up a table wherever you please to start serving people.


You are ducking the question by picking holes in my specific example (which might have been poorly chosen), so I'll phrase it in the abstract.

Consider any low skill job which serves rich customers. Under what conditions should we pass a law restricting supply, making an unlucky subset of those workers unemployed but raising wages for the remainder? All commodity services (including, but not limited to landscaping, taxis and maid service)?

Should we only do it in cases where we already do it? (I.e., should we simply maintain the status quo?)


Um, sorry, but I want my taxi driving making a living wage. Why? Because [s]he has more to lose by fucking me over. If he is on the edge of poverty, making only 35k/year, he is MUCH more likely to screw me over with shady tactics because he needs to feed his family.


Even after cutting the medallion fee in half, NYC would have $9000/cab to devote to policing taxis. Assuming the 4x yearly safety inspection costs $1000/inspection (at a rate of, say, $333/hour for the mechanic), that leaves $5000/year/taxi for police work.

So for every 15 cabs, the city could spend $75,000 on a dedicated undercover taxi inspector. Lets say this undercover inspector works 250 days/year, and rides 3x/day. Thus, every taxi is subjected to an undercover inspection every single day (on average, assuing 250 working days/year). Assuming an average fare of $12 and taking revenues of $90,000/year (see my previous link), a taxi driver has 30 fares/day, one of which is an undercover inspector.

Each time he uses shady tactics, his odds of being caught are 1/30. 50% of cheating cabbies will be caught before they manage to cheat even 20 customers.

Also, if you don't feel that $35k/year (higher household earnings than 37% of the US) is a living wage, then what is?


$35k in Iowa City is equal to $58k in Queens.

So I'm thinking 50k.

http://www.bankrate.com/calculators/savings/moving-cost-of-l...


Also, if you don't feel that $35k/year (higher household earnings than 37% of the US) is a living wage, then what is?

Come on, 35k in NYC is barely a living wage and you know it.


Having read 'yummyfajitas closely for awhile now, can I take the liberty of predicting that he will acknowledge the NYC congestion problem, but suggest that we should be addressing it with a market-based solution that targets it directly, instead of as a side effect of regulations?

I agree with you not him, because I don't trust the process that will generate the market-based solution, and I think the medallion system actually pretty much works in Chicago and NYC. But that doesn't make the argument much more productive.


I suppose I don't understand how reducing congestion can be seen as a "side-effect" of the medallion system. That's one of the explicit reasons it exists: to cap the supply of cabs on the streets.


The problem isn't the number of cabs on the street; it's the number of cars on the street. So charge a congestion tax. Even if there are 10,000,000 cabs, if the congestion tax is set appropriately, they won't all be clogging the streets, since they won't be able to make a buck doing it.


You don't have to solve a problem in one fell swoop with one technique. Medallions aren't the only way to reduce congestion, and they aren't a complete solution, but they certainly do at least partly address the issue as an explicit goal, not a side-effect.

I would welcome a separate congestion tax levied on certain other kinds of traffic to complete the solution. You want cabs in the city, and you want them running all the time - they're doing the useful work of moving people around, and should certainly be preferred to traffic that congests the city during rush hour just to cram into a parking lot for eight hours.

Even if there are 10,000,000 cabs, if the congestion tax is set appropriately, they won't all be clogging the streets, since they won't be able to make a buck doing it.

I'm deeply suspicious of this kind of reasoning when it's unaccompanied by an explanation of how the tragedy of the commons would be avoided. You're a cab driver with rent and your kid's tuition to pay, are you the one staying home today?


You're a cab driver with rent and your kid's tuition to pay, are you the one staying home today?

If congestion charge + other expenses > expected revenues, yes. Actually, things should equilibrate roughly at expected revenues - congestion charge - other expenses = average low skill wage.

The real trick is to set the congestion charge somewhat higher for taxis than for regular vehicles, since taxis spend more time on the road. The proper ratio would be (taxi charge/regular charge) = (taxi time on road / regular time on road), presumably this could be estimated using sat photos.


People don't always make optimal, rational economic decisions. If driving a cab is what you've always done and is all you know, it's not as simple as plugging the numbers into the equation each morning before deciding to go to work. You know there are fares out there, and that if you don't take them, someone else will. What motivates any individual cabbie to acknowledge that they should be the one to give that fare up rather than someone else? And what job do they take in its place? You're certainly correct that the decision would get made one way or the other, but there's a human cost that cold, superficial economic reasoning has a hard time accounting for.

The real trick is to set the congestion charge somewhat higher for taxis than for regular vehicles, since taxis spend more time on the road.

Commuter vehicles deliver less value to the city, though. They spike congestion in the morning and the evening, waste time looking for parking, and take up valuable real estate just sitting around during the day. That's the traffic you want to discourage, not cabs, delivery trucks, and other actual economic contributors.


You missed the part where the taxi gets rated. Problem solved.


You missed the part where the cabbie gets together with his friends to pad his stats and/or only screws 1 in 10 fares, and the part where people aren't going to perceive the same social incentive to review a cab as, say, a trendy restaurant.


People will absolutely provide negative reviews when they get screwed by a cab; they'll be sputtering and looking for anything they can do to equalize the situation.

But that doesn't matter, because this is the eBay problem; a reputation adequate to do business in the system is too cheap to establish from scratch to make losing one a major deterrent.


I didn't say people wouldn't leave reviews, I said they wouldn't have the same social incentive to do so as with other things that get reviewed. Other incentives (revenge) of course still exist, but the result is probably a heavy bias towards negative reviews, which can still make the system pretty unusable.

And this isn't necessarily the eBay problem, if you have to provide a driver's license or some other set of credentials to set up a driver account, and you can't just switch your handle in the system. The post was kind of light on those details.


Nope:

(a) There will be more than one of these dispatching services, so you'll just hop.

(b) There's an inherent TOCTTOU problem, since they're only checking licenses when you sign up, not every time you pick up a fare. You'll just "rent" someone else's license; there are presumably tens of thousands of people who don't care what their cab dispatch reputation is.


Being able to switch services or rent someone else's credentials are different problems than being able to cheaply create a new positive profile on a given service. Switching doesn't help you much if there's one dominant dispatch service that everyone uses, and renting someone else's credentials drives up the price of scamming the system.

This is kind of a silly argument, though, because my main point was actually agreement that a taxi review system would probably be horribly broken. I just don't think it would necessarily be broken in the exact same way that eBay's is.


There are probably not tens of thousands of people with the correct license endorsement. Those who do have a commercial driver endorsement are probably not so keen to rent it out.


I don't think the average, I'm from east bumfuck, tourist will provide a negative review after being screwed by the cab. They aren't going to know! Yet they are precisely the ones protected most by the [broken] medallion system.


What prevents you from walking away without paying? (that's a genuine question, not a flippant remark)


Nothing. I did it once, in a particularly abusive situation in Boston.


I'm guessing you're male, young, a US resident, and not physically disabled. Tweak any of those variables, conduct 10 trials with an otherwise randomized population, and see how the results compare to your experience.


Physical intimidation.


Wouldn't the fact that you're charged through Ubercab prevent a lot of this kind of thing?


http://xkcd.com/325/

Alt text mainly.


I don't know about other places, but here in NYC, in the poorer neighborhoods in Brooklyn at least, there's a thriving system of taxi alternatives. You'll frequently see cars or vans packed full of people getting rides for a buck or two, and the cops don't seem to pay much attention to it.

In Manhattan or other parts of the city, I don't see how this kind of thing could compete with the yellow cabs or the car services. People have the money to pay the higher prices, and there are enough horror stories (true or not) floating around that very few would see it as worth the risk.


Jersey City has jitney buses which are an excellent means of public transit. They compete with public buses, providing more frequent (but less predictable) service at lower prices.


The limited supply of taxi medallions is a good thing otherwise city streets would be clogged with taxis even more so than now.


In the UK, 'mobile hailing' would be equivalent to pre-booking. In many parts of the UK pre-booked cabs are referred to as Private Hire vehicles. The only cabs you can hail on the street are Hackney Carriages. I believe unlicensed minicabs are illegal in the UK but London still seems to have problems with them.

For both Private Hire and Hackney Carriages, the cars/drivers are licensed and must meet regulatory requirements regarding vehicles and insurance policies. I believe the requirements for Hackney Carriages are more stringent.

Those licences exist to protect the public.

For both types of licensed drivers, UberCab would be a great extension. However, I can only imagine it working if the taxi firms themselves were willing to implement it.


a friend of a good friend of mine was brutally raped by an independent Lincoln Town Car licensed driver (in NYC). I would advise (my personal opinion) women to avoid such services and deal with the hassle of getting a cab. Getting into a stranger's car and closing the door behind you is an action that should not be taken lightly. That is why I always take a taxi or use a well-established car service (as in substantial with a fleet of cars) instead of trusting someone who is able to drive you around because he/she filled out an application and leased a fancy black car. At least there is some accountability with taxi and fleet drivers. And unless UberCab does serious due dilligence on their drivers (perhaps they do?), I would stay away from this service (again, if I were a woman).

Edit: Please note that I do not mean to imply that all car drivers are bad people. I am confident that the majority of them are good, honest people trying to make a living the best way they can.


This article has to be read very carefully. Near the beginning it says:

UberCab contracts with black car services – mostly Towncars and Escalades

That suggests that they are probably doing some due diligence.

My friends the management consultants report that they use these black-car services all the time. You think a business traveler with a big expense account hails one of those yellow cabs, like me and the rest of the plebes? ;)

The follow-up idea of dispatching cab traffic to any random idiot with a Lincoln Town Car, an iPhone, and a possible drug problem seems to be Arrington's idea. It is, as you point out, a pretty lousy idea. [1] But don't blame UberCab.

---

[1] I should know. I had this idea five years ago. Then I conducted a thirty-minute thought experiment and decided that the due diligence would be annoying and not my cup of tea.


It seems that the rating system might have prevented this... maybe others thought the driver was "creepy", etc. and might have given him/her a bad rating, which might have dissuaded your friend from choosing his/her car.


Certainly the fact that the driver is completely traceable (more so than a yellow cab driver) would dissuade most criminally inclined cabbies.


I don't think you're at all correct that they are less traceable than yellow cab drivers. The government bureaucracy makes it much more difficult to fake credentials and make yourself untraceable.

With UberCab, it looks like anyone could steal an iPhone/credit card, download the app, and sign up as a driver all in the space of an hour.


I think you wrote "less" when you mean "more". Assuming that's what you meant, I disagree. From their website, it looks as if UberCab requires drivers to be a livery company, so gov credentials are required either way.

The only way I can see the stolen iphone game working is if you steal the iphone from an UberCab driver, or convince UberCab that you are an independent livery and then rape someone before the stolen iphone gets cut off.

In contrast, a legitimate yellow cabbie just needs to put his coat on top of the taxi license and make sure the victim doesn't see his license plate # as he drives away. That same game won't work with a legitimate UberCabbie, since there is an electronic record that driver X picked up passenger Y.


True. I think it's common for the owner of a medallion to let someone else drive the car illegally.


Well, with ubercab you have a record of who the driver and passenger are before you even step into a cab. I can't tell you the last time I bothered to look at a cab number or license.


Also - learn martial arts. I took Krav Maga, there were plenty of women in the class, and the techniques translate well to self defense even if you're not as big or strong as your assailant. They teach you to attack vulnerable areas - eyes and groin in particular - and how to break chokes, deal with someone trying to pick you up off the ground, things like that. Everyone who travels or otherwise has a not 100% safe routine should take 10-20 martial arts classes. Might save your life.

Edit: Can't resist an anecdote. There was a huge Russian instructor in one of our classes, and the class that day was about half women. He said, "Ok, man tries to rape you? Rip his eyes, like this. See? Rip! He can't see now for rest of life? Tough shit! Should not have tried rape you."

(Despite the machismo of how this might look in text, it was well received in person - a good community, good people, good training, very welcoming to everyone at any level of age or fitness. Definitely recommended, almost any studio will give you a free class so just google for your area and go take one. Really, it's awesome.)


It used to be standard advice in women's self-defense classes (e.g., http://modelmugging.org/) to avoid at all costs being coerced into a vehicle. Being in a vehicle with an assailant was said to lower your odds of escaping considerably.


Driving a gypsy cab (which is what ubercab is) is a dangerous business. In the 90's, New York averaged something like 2 murdered cabbies a month. And those drivers were only being robbed for a small amount of cash.

This application could be very attractive for car jackers. A bad guy could simply place and order for an out-of-the-way alley or warehouse and know that the cabbie they hail is going to be driving a really nice car.

A would-be car jacker would need to use a stolen iPhone and credit card in order to keep from getting caught right away, but that's hardly an insurmountable barrier.


Your comment is specious.

In the 90's, New York averaged something like 2 murdered cabbies a month.

Uh... NYC was a dangerous place in the mid 90's. Do you have evidence that the gypsy cabs were targets more than yellow cabs?

It's not the gypsy cabs that were the problem, it was the customers.

A would-be car jacker would need to use a stolen iPhone and credit card in order to keep from getting caught right away, but that's hardly an insurmountable barrier.

In that case, UberCab would need a stronger way to identify users. For example, you enter the cab, and the cabbie takes a photo of you with his iPhone UberCab app and uploads first thing.


Uh... NYC was a dangerous place in the mid 90's. Do you have evidence that the gypsy cabs were targets more than yellow cabs?

Yep. http://www.taxi-library.org/marosi.htm

"Out of the 85 total cab drivers killed in 1992 and 1993, for instance, only 12 drove yellow cabs."

The difference here is that gypsy cab drivers work in more dangerous neighborhoods that are underserved by big taxi companies. I suppose ubercab drivers could just avoid those same neighborhoods...


I used cabulous to hail a cab in San Francisco this weekend. Very similar service, but uses medallion taxis with regular meter rates. You have to pay the driver normally. It was a great experience and I imagine these types of services will be commodity eventually.


Here's a great article on the biggest car service in Brooklyn-- Arecibo (their base station is around the corner from where I live). Many interesting details about the economics, technology, and politics of the livery business in NYC:

http://nymag.com/print/?/news/features/54678/

From a safety perspective, in NYC it's illegal (and not a good idea) to hail a non-yellow-medallioned taxi on the street. They likely don't have a TLC license, and may or may not be affiliated with a larger fleet.

Call the service's base station--they might not perform background checks on the drivers, but they'll be licensed and insured. The services have an incentive to weed out the bad drivers-- if they get a reputation for spotty service or creepy guys, then customers will switch to the car service down the block (there is healthy competition in this market-- they are constantly splitting off and trying to poach each others' drivers).


Just thinking about what forces might prevent the industry from being disrupted (regardless of whether/how this is good for the public):

I think the biggest innovation is the drivers rating the customers. It seems like a joke, but if you think about it, professional car service drivers aren't going to want to pick up just anybody for short rides. That's the real obstacle for scalability among that group. The obstacle for getting all cab drivers to join UberCab is probably the risk of alienating the customer base that might just want town cars, etc., without having to think about the complexity (i.e., it's a software problem, and a pretty easy software problem if done right). The other obstacle is the cost of an iphone, etc., for cab drivers. The obstacles for anybody with a car to join are medallions, licenses, etc., as mentioned. The other obstacle is, even with licenses, the fairness and effectiveness of the rating system is tough. Service history is a mixed blessing. When I step into a cab, I may not actually want to know about the driver's history. I may just want a nearly 100% guaranteed level of service (which theoretically the medallions provide). Though on the other hand it would be crazy to see like average on-time trips, average speeds, customer satisfactions, etc., in one big visual thumbprint before you step into a cab...


Is “everyone could be a cabbie” really such a lucrative prospect, from the drivers’ point of view? My understanding is that when you take into account the uncertainty of income, the fixed cost of leasing and maintaining a cab (of course, part of this is the cost of leasing the medallion), and the risk of passengers attacking you or simply not paying, cab drivers don’t net that much money... which may be one reason why, at least in Boston and NYC, cabbies tend to be immigrants.


I'd think of this as more on-demand towncar than a new type of taxi-disrupting the limo business rings far more true. For the slightly upscale customer who wants privacy and looks and can pay a bit more. And not for women, dear god no. But women don't use technology anyway, right?

I was thinking about a similar idea and also the parallel concept of "AirBnB for passenger seats", rather than unused towncar inventory, an easier way to "book" a carpool ride from someone who's already going that way. You just run into a ton of tangles around insurance, carpooling vs taxi licenses, scaling especially abroad, and the fact that one bad driver - one accident - could completely ruin your entire business.

I do think there's potential in disrupting the taxi business, though my current angle of thought is more about using technology, especially cleantech and mobile bookings, to make it a low cost planet-friendly business. Just the thought of all those exhaust fumes scares me. Go EcoTaxis!


The first time an UberCab driver gets into a wreck without insurance or licensing should be interesting. I can see this being very useful for legitimate car services, but they need to do serious due diligence to make sure their drivers are legitimate. Mike's dream of anyone becoming an UberCab driver would be a legal nightmare.


The taxi medalion is a little more than a price fix in some cities, such as London.

Buying from somebody wih a zero rep on ebay means you might lose out on your beanie baby. Putting your daughter in a random strangers car with no information other than them owning (or having stolen) an iphone is a little different.


Very good point about (potential) stolen iPhones but your argument still applies to the current system. It's still a stranger in a car, they just happen to be sent under the banner of a company.

If the taxi firm itself implemented (or used a version) of this kind of service then that could be a great win for the firm.


Everything about anyone being able to join the network and become a taxi driver (from about the sixth paragraph onwards) is pure speculation; technically, there's nothing preventing it (well, aside from modifying the app to require more than hitting a button), but they haven't done so yet, and might not. Currently, they're contracted with black car services, so professional drivers who are probably at least as safe as a taxi driver (unless I'm horribly misreading this).

However, if they are considering moving in that direction (again, no proof of that), your criticism is really important to consider, and might be a pretty big limitation. I'm sure that there are ways around it, but only if the network of drivers is heavily moderated, with lots and lots of safe-guards built in. Also, not allowing children/teens to ride unless accompanied by an adult, and adding some sort of panic button to the app.


I've tried Ubercab a bunch of times, and the two times I actualy got a cab were a good experience. It's really nice not having to fumble with cash or a card for payment. Plus you get to ride in a towncar/SUV/etc. It is a bit more expensive though.


It's a cool idea. And an evolution of black car service (they have to be called and don't normally solicit for work).

As like any other hire service, they operate under a difference set of rules. They have to be licensed, need to meet size requirements, and they have to carry much more insurance.

Some random driver with a pickup and just basic PIP coverage probably wouldn't be a good choice. Especially if you are paying for it.

Also, reading their website, they are very interested in working with limo companies and cab services not random guy with 30 minutes to spare. So no, this is not like AirBNB, at all.


It'll be really interesting to how much disintermediation takes place as a result of UberCab. I expect they'd need to expand beyond iOS to get scale but that should be possible.

In the UK there are lots of regulations surrounding Private Hire vehicles and Taxis, some of those rules are regional too. I doubt I'd see something, like this here but the firms should definitely be aware.


Various commenters are saying that cities would simply define "mobile hailing" as also requiring a license. Okay, maybe, but would it matter? How would it be enforced? And could any particular city hold UberCab liable? Enough to force them to stop?

The whole concept sounds particularly disruptive because it seems that it would be so difficult to police.


If the cabbies complain loud enough I'm sure they can set up a sting. Nothing stopping them from downloading the same app and hailing a ubercab. When you can't present a medallion or commercial drivers license you're busted.

And there is nothing stopping them from going into court and throwing water on the whole thing with an injunction.


You think the police are unwilling to hail a cab over this service?


It doesn't take very many prostitution arrests to encourage the trade to move elsewhere. I imagine that a group of officers with iPhones could arrest thirty or forty uber-cabbies in an afternoon. It could be _very_ lucrative for the city if the statute was modified to allow the police to confiscate the vehicle used in the "crime."


This may work in SFO. But does anyone know if the town car companies in NYC (Dial 7, Carmel etc etc etc) have overcapacity issues?

In the everyone is a taxi model- do you really want to get into a car without knowing how that person drives? There are people in my own family I won't drive with, let alone pay them to drive me somewhere.


The argument about not knowing how someone drives applies to any bus, taxi, etc., regardless of how it was booked so long as you haven't ridden with the driver before.


This will work in SF because taxis don't do a good job for the class of people who own iPhones. In NYC, the class of people who own iPhones are already well-served by cabs.


I worry about them getting AirBnB'ed. I'm a big fan of AirBnB and CS, and I've often thought I'd be happy to do a fare when I've got a hour or so between meetings.


I thought about building something like this.

Pay from the app: No cash required

That's a powerful feature and it could become a very sticky app for me if I lived in San Francisco.


It's illegal to drive and text message in California; their drivers more or less have to break the law to participate.


what I like about this is the rider has an iPhone so while the cabbie is transporting him the rider can see the Google Maps routing path, and compare that to the actual position and route the cabbie is taking. If they differ significantly the rider can know he's getting scammed. Technically the rider could do this without UberTaxi as long as he has an iPhone, but since UberTaxi depends on the rider having an iPhone app, it comes along for free.


this is practical innovation. we need more startups like this.




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