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DC "Uber Amendment" would force sedans to charge 5x more than taxis (techcrunch.com)
292 points by Shenglong on July 10, 2012 | hide | past | web | favorite | 200 comments

These are the kinds of battles that break out when your business model is truly disruptive.

The price of taxis is held artificially high and really it is a loss for the consumer. We are left paying the higher prices for what should be a relatively free market.

There was an article on here a while back about how the medallion system in NYC is making both sides lose out... anyone remember it/have the link?

It wasn't so much that the medallion system is bad, as defined as limiting the total number of cabs on the road, it was the exemption that the medallion owner didn't have to drive. This leads to cartels of medallion owners that make huge profits off the backs of other drivers.

> The price of taxis is held artificially high and really it is a loss for the consumer.

When does price fixing ever help the consumer? Honestly.

Labour is fixed at a minimum price (the minimum wage), this reduced the amount of consumers who aer working for very little.

This doesn't help the consumers but the laborers.

I think it's interesting that minimum wage has to be raised like clock-work. It's like inflation is out-pacing wages -- which seems like another failed implementation of price control (interest rates).

An argument could be made for rent controlled apartments being a net positive. Not just for the people renting them but also for the businesses hiring those people and by extension their customers.

> An argument could be made for rent controlled apartments being a net positive.

Only if you overvalue the benefits and ignore lots of costs.

Rent-control discourages turnover and maintenance. It also discourages building new capacity. The various tweaks to try to get around these things have other problems.

> the businesses hiring those people and by extension their customers.

How many biz want fewer potential customers and employees?

Whenever you hear a politician say "I remembered {group}", he's telling you that other people were "forgotten". (Actually, they weren't forgotten, they're paying the bills, and then some.)

Are you referring to "rent control" or "rent stabilization" or both?

It's not clear to me how/why rent stabilization (which merely limits how much rents can increase each year) would lead to less "building new capacity" -- an argument could be made that it forces new capacity to be created, because landlords can't make much more money off their existing units.

It reduces the lifetime rental income from building a new unit. If I have to pay $600/ft2 to build a new unit, and can only price it at $2/ft2/mo it makes a big difference whether my annual income goes up by 6% vs. 2%, especially given other fixed costs.

Rents are supposed to be set at fair market for new construction, but if you finish the unit in a downturn, or if there is oversupply, and you ever rent for less than you'd like, you'll never get out of the hole (without a tenant moving out) under rent stabilization.

There's also the risk of additional regulation -- part of why I won't buy in EPA is that it has rent control now (the only place on the peninsula), which is sort of tolerable as it exists now but which could easily get worse. Unincorporated San Mateo County is effectively never going to have rent control, so even for 5% more (on top of the "not being in the ghetto" premium), it's a better deal.

> an argument could be made that it forces new capacity to be created, because landlords can't make much more money off their existing units.

If they're not making "enough" off of a unit, why would they build more units?

Demand isn't the whole story. Demand that can be satisfied profitably will be satisfied. Demand that can't be satisfied profitably won't be satisfied.

For example, there's a huge demand for $1000 "supercars". Yet, the only supercars made cost far more.

That's interesting, because the very first economics study material I read specifically used rent control of an example where government interference leads to a less efficient market.

I'd love to hear the argument for rent control, though.

Here's an argument for rent control: Mixed income neighborhoods are more vibrant and thriving compared to more homogenous neighborhoods. Living in the Mission, I definitely feel like the comfortable mixing of multiple cultures and socio-economic classes is what makes it such an exciting neighborhood compared with SOMA where it's either all yuppie apartments or run down slums with nothing in between.

The Mission is a shithole. I don't think it serves your point.

As someone who knows neither SoMa nor Mission, could you elaborate please?

San Francisco hoods. SOMA is "South of Market" and is kind of industrial; It's being revamped with live/work lofts and lots of SMB / Shared office spaces.

Mission is another neighborhood which is pretty much a shit-hole, but IS a cool place. There are lots of great places to eat and drink and there are festivals, parties and parades most every night.

Usually when you hear about someone being shot, it's either in Oakland or the Mission.

"shit hole" is extraordinarily relative, apparently, and reflects more on the person using the term than the place being described.

Unfortunately, "exciting", "yuppie", and "vibrant" aren't economic terms.

It sounds like you're justifying rent control on the basis of aesthetics.

Aesthetics are what drives immigration to a degree. Would you rather move to Cleveland or San Francisco if everything else was equal? I thought so.

So, SF should cost more, since it's more desirable, and push people to poor ignored Cleveland to balance out the pressure.

The place with all the beautiful trees costs more, so lets build more housing there, cutting down the trees while doing so.

Same idea: You will lose the character without some sort of effort to not.

You read a study that said that artificially reducing prices leads to an inefficient market? What was the next paper written by that economist, that the sun coming out decreases the amount of clothes per inch people use to cover their bodies?

I didn't say it made the market efficient, I said an argument could be made that it was a net positive. That's not the same thing.

Example: efficient markets sometimes produce monopolies, who then abuse their monopoly power. That's a net negative - but it isn't an example of an inefficient market.

There aren't any historical examples of free market monopolies. There are only examples of government enforced monopolies.

I really wish people would clarify what they mean by "free market" -- whether they mean unregulated (a politician's free market) or competitive (an economist's free market). If you are saying that there are no examples of monopolies in competitive markets, that's because it would be a contradiction in terms. If you're saying that all monopolies are created and enforced by governments, then that's just flat-out false. Pepsi and Coke dominate the industry of selling pop due to branding; the only "government enforcement" of their domination is that you can't brand your own pop so that it would be easily confused with Coke. Same with Microsoft -- the US government never threatened to jail you if you don't run Windows, but Windows had a monopoly on the desktop market for a while and it's only recently begun to show cracks.

I would go so far as to say: governments themselves are "free-market monopolies" in this sense. That is, there is no binding unilateral authority which solves intergovernmental disputes, and each government instead has to negotiate with other governments in an open and unregulated forum where even backstabbing and flagrant contract violations are permitted. If governments are monopolies on power, then the market of power is surely not a well-regulated one.

A monopoly is a market with only one supplier.

Pepsi and Coke are not a monopoly - as you explicitly acknowledge, there are at least two suppliers in this market.

Microsoft was never a monopoly, there were always other suppliers (Sun, Be, IBM, Apple, Linux, at different points in time).

That's why I was putting more emphasis on the word "domination" than on "monopoly". I agree that WalterBright may have been making a very dense and mostly irrelevant point, to which the proper response may have been "so what?". I simply disagree that this is how we should interpret it. Rather I would give the benefit of the doubt and take him as making a real, germane, substatial-but-misguided libertarian talking point. That is, there are legitimately people in the libertarian camp (I was one of them!) who falsely conflate deregulated markets and competitive ones.

This is false. There are so called 'natural monopolies' where one large firm really is more efficient than multiple smaller ones. A popular example is google search. Of course, if that monopoly starts engaging in serious rent seeking behaviour, competition could become profitable again.

Give me a solid alternative and I'll stop using Google search. Until then, don't care if Google is a 'natural monopoly' - it does absolutely everything I want it to do and I occasionally click on advertisements from which they profit. It's a mutually beneficial relationship and I see no reason to switch. Net positive.

This is a problem with monopolies, though. Their competitors can't gain marketshare by being better but not better enough. Take Microsoft's monopoly in the 90's. There were competitors and it could be argued they were better, but they weren't better enough to justify switching to them. Even being of the same quality, the monopoly will continue to gain marketshare not because of being better but because of being bigger.

Microsoft is a natural monopoly because of the network effects between number of consumers of an OS and number of developers for an OS. What makes Google a natural monopoly?

I wasn't responding to Google being (or not being) a natural monopoly, I was responding to "Google is what I use, and it's what I use because it's Google".

On your point, it could be argued that Google's overall platform dominance might not be attributed to barriers to entry, but rather barriers to exit. While Google offers some of your data back to you in a portable format it's still quite difficult to leave their services, and even when you do they will still be tracking you for advertising. To form their potential natural monopoly in your mind, you can imagine how difficult and inefficient it would be to have multiple different firms tracking you to the same extent that Google does (search, Google+, Gmail, calendar, Google Docs).

I am not an amateur economist.

That's because there are no historical examples of free markets, and for good reason.

There is no abstract measure of an 'efficient market'. The efficiency of markets can only be regarded in the context of the utility they create for their participants (direct and as externalities).

It is true that there's a difference between an efficient market and a socially optimal market (if efficiencies are only measured in monetary terms, and exclude any accounting for non-monetary benefits and externalities). However rent control is quite a bad example. There is abundant evidence that rent controls produce serious under-supplies of housing, which is a socially negative outcome by any measure.

> an argument could be made that it was a net positive

Net positive? Sounds like some kind of value theory. Which "net positive" are you talking about? Can't argue something you don't understand..

I made $500 playing craps. I spent $200 on my hotel and another $200 on food and drinks. The trip to Vegas was a net positive. I made $100.

In this instance it would mean that the sum total of the economic benefits to NYC that come from rent-controlled apartments outweigh the sum total of the negatives.

Correct me if I'm wrong but binding price ceilings and floors always lead to surpluses and shortages respectively and cause a deadweight loss.

There's a word for profitability already. You're arguing price-control can be a profitable endeavor, but to who? Consumers? The cartels?


Price control is profitable to society? Is there a formula you could show me (I'll buy it from you)? Maybe some underlying principles? Or you just have that 'gut feeling'..

This is why we can't have nice things.

That may have been more of an argument prior to the internet -- e.g. now someone can find an alternative place to stay in fifteen minutes on craigslist at a cheaper rate.

That is unless all of the landlords get together and price-fix, though I suspect that would correct itself rather quickly.

The biggest concern is maintaining a consistent and high quality service.

For example, if the market was to become saturated with drivers undercutting the market, it is plausible that some drivers would be forced out of the market as they are unable to make enough to sustain themselves. If this happens to enough 'regular' drivers the service may become irregular and the goal of providing accessible, consistent public transport (or whatever the goal is) suffers.

I guess what I am saying is that a completely free market _might_ actually harm the market in the end. We expect free markets to self-correct, but are we willing to accept sub-par services whilst waiting for that correction?

I have seen this concern in the taxi market in Canberra Australia. Taxis there are tightly regulated, and the numbers are kept low to make sure it is profitable. Their numbers have recently been increased to try an accommodate the increased Monday morning and Friday evening rushes as more people are flying in and out every week. The traffic during the rest of the week has remained fairly constant. This means that profits are lower and so some taxi drivers are getting out of the business. In a free market it's possible that this inflation of service providers could happen unchecked for a time, before it is realised that there is not enough consistent work to support the new drivers. The possibility for extreme fluctuation in service provision is high, and this could have terrible consequences for anyone who happens to need a taxi home on a Wednesday evening after too many drinks at the pub.

It is hard to say for sure if a free market would deal with the irregular nature of taxi business in that city better than a regulated market, but I think it is clear that the purpose of a taxi system could be at odds with the outcomes of a free market. A free market could fluctuate between too many and too few providers, removing the reliability that is essential in an effective taxi service, even though the regulated service might provision a greater than optimal service cost.

> We expect free markets to self-correct, but are we willing to accept sub-par services whilst waiting for that correction?

Yes. When the service goes to shit, a competitor comes in, steps up their game, and if demand for a superior service is high enough, they succeed.

Uber is a premium service that is more expensive than the typical overpriced cab. If service is undercut, something like uber can pop up to provide reliable and quick service. I've gotten an uber cab in 3 minutes at 1 am during pride weekend and 5 minutes in north beach during a sunday morning. Uber is near instant in SF.

But Uber's prices (at least, last I checked: $4.80/mi in SF, iirc) are higher than cabs' prices.

If you get UBERx its $3.25/mi now but still higher than cab pricing.

Have you ever taken a taxicab in DC? DC cabs are dumps. Getting one with air conditioning is a crapshoot. Another city that has really crap cab service is Detroit. Both cities have thriving private car services because for a little bit more money, you get a much better experience.

Combine that better experience with app convenience and for most people the extra money doesn't matter.

Totally agree. Getting a cab in sweltering mid-summer DC weather is freaking awful. I almost always shell out the few extra bucks for a town car on my way back to the airport. It cozy, air conditioned, and even smells nice.

I also get really, really tired of the credit card dance that every cab driver does. Before I hop in a cab, "You take credit cards, right?" "Oh, sure! Of course!" Then we arrive at destination "Buddy, you don't have cash? C'mon? My machine doesn't work. There's an ATM inside, you could just run in and get some cash." "Not my problem, champ. You can take the card, or you call call your boss."

Not to be stingy, but complaining at me for paying you the way I said I was going to pay you is not the best way to get a good tip.

I'll definitely checkout the Uber service (If it is still around) next time I'm in DC.

They do that in Atlanta too. Also fuck with the "Business to residential" fare and try to not turn on the meter and instead charge you the much higher business to business zone fare

Taxis seem over hyped. Why not just call a car service. Don't know if such things exist outside of NYC though. Basically you call them to pick you up and drop you off anywhere you want. They give you a fixed price depending on your destination rather than having a meter running. The only limitation they have is that you cannot wave them down. You have to call them. Overall I feel I get a better service from a car service than from a yellow cab. Also, as far as I'm aware there isn't a limitation on how many car service there can be (I have family members that work in such) which keeps competition high and prices low.

"The price of taxis is held artificially high and really it is a loss for the consumer."

Absolutely. In Bangkok there are more taxis on the streets than all other cars combined. You can find one anywhere, anytime and a ten minute ride costs about $1. No need to own a car, even if you can afford one.

Our minimum wage wouldn't allow for that but there is no reason it needs to cost $60 to take a 15 minute ride from San Bruno into SF. The gas cost + labor cost of that ride should be 1/10th of that. Double that to account for profit, administration and the car and you have a $10-15 ride.

Price it like that and a lot less people would own cars - and there would be a lot more taxis on the streets to account for the increased demand. And a lot of jobs.

Bad example. I've never seen a city in more need of stiffer regulation than Bangkok. The single worst part of driving in the city is dealing with agressive or incompetent taxi drivers. They break traffic laws and block lanes looking for fares.

The over-supply of taxis has the opposite effect of a more regulated public transport. It does not reduce the total number of cars on the road. It's useful from a consumer standpoint but the low cost means people are less likely to use the state of the art elevated train and subway, both of which run under capacity.

"Price it like that and a lot less people would own cars." Possibly in other cities -- though I doubt it -- but it certainly didn't help in Bangkok. People don't buy cars because they need them, they buy cars because they want them. The number of news cars sold in the country per day is astounding (though the number escapes me) and that's despite the fact that they cost 50% - 350% more than the same cars in the US.

Bangkok needs to regulate the shit out of the taxi industry and make it more expensive to drive in the city if it wants to sort out its remaining traffic issues.

Uber can probably work in US cities that have the traffic capacity, but it's a horrible idea in congested areas.

I don't understand why you make the claims that you do.

Why is it bad that people are "less likely to use the state of the art elevated train and subway"? Is it because they're "state of the art"? That hardly seems compelling. Is it because the train and subway are faster or cheaper? Sounds like they're not, otherwise more people would take them. Why is train and subway usage important if no one wants to use them?

It sounds like you're advocating forcing people to do something they don't want to do, and I don't understand why you're advocating that.

Because favoring the trains would mean fewer cars on the road, something the city needs.

The trains are faster in many cases (provided you're starting / ending close the line) but they're not cheaper. Making cabs more expensive would change this.

Take a look at what Singapore does http://en.wikipedia.org/wiki/Electronic_Road_Pricing to keep cars off the road. It might seem a bit draconian but it's effective.

Why does it "need" fewer cars on the road? It sounds like the city has as many cars on the road as the city wants to have.

If the trains aren't cheaper, why should that be the cars' problem? Why not make the trains a better alternative instead of making cars worse?

Why would you advocate something that "seems draconian" to you?

Why does it "need" fewer cars on the road?

If you'd ever been to Bangkok you'd know why it needs fewer cars. Pollution is terrible, and traffic is appalling - often a journey which should take 20 minutes takes hours, and safety standards are very low - the most popular form of taxi is a pick-up truck with bench seats in the back which is really unsafe in the event of an accident. They desperately need to encourage more public transport and get rid of some of the cars/trucks on the road to prevent rush-hour gridlock and massive pollution.

The easiest way to clear up the roads for public transport is to make driving more expensive and use some of that money for improvements in the public infrastructure. I doubt they'll ever do it, but they could do worse than follow the example of London with a congestion charge for central areas, and use the money to subsidise public transport, which is underused at present (because the train is so expensive, and the buses are so slow due to all the other traffic).

Huh? The most popular form of taxi in Bangkok is a typical sedan. The Songthaews are more like mini-busses and actually are a pretty affordable form of private small-scale mass transit. They definitely aren't safe, but without them most of the poorer folks in Thailand would be screwed.

Driving is already fairly expensive in Thailand: cars and gas are both pretty expensive. Taxis in Bangkok are much more expensive than they are where I live (tourist areas are even worse with their taxi mafias). Bangkok already has a public transportation system that is much better than other cities in the area (barring Singapore), they aren't doing that poorly.

Yes, there is a mix of taxis and probably the cars outnumber trucks (depends what you're doing, if it's long distance you wouldn't want to take a taxi because of cost, and I guess they have tuk tuks too). Neither are great because of the traffic and pollution caused by all the other road users. So Bangkok is a terrible example of a place which needs more taxis, as if you want to go any distance at rush hour they are terrible, and they cause all sorts of problems (pollution, noise, traffic) - it's one of the worst cities I've been to for traffic.

The public transport there is good (what there is of it), but the BTS and MRT are both expensive and therefore underused by anyone other than tourists and business people - most people don't use it and it's not as extensive as other cities. At least when I've been there the skytrain is remarkably quiet compared to the streets given how quick and easy it is. It's a shame they won't tax the cars more in town and use the money for improving public transport instead IMHO, and Bangkok is a terrible example of a place which needs less regulation - they need far more regulation on their taxis and traffic in general in order to manage it as at the moment it is bedlam at rush hour, partly because of all the taxis, motorbike taxis and trucks. It is a great example of the free-for-all which results from unregulated capitalism though.

Skytrain is packed during rush hour, but it's not as packed otherwise. It seems to go everywhere I need it to when I visit Bangkok, though.

Beijing cut the subway to 2 yuan during/after the olympics (it was 4 yuan before and even in 1999 it was 3 yuan). The result is that the subway is very elgalatarian and very packed; I avoid it for the taxi accordingly (spend about 80 yuan a day on taxis). But Beijing traffic is also worse than Bangkok's, and there is more regulation (no private minibuses, not many tuktuk that are useful). Whatever they do, the answer to our problems probably isn't more taxis but public transit is also a problem (for the middle class).

I like Japan the best, where the transit is affordable, convenient, and mostly comfortable (when not rush hour).

Where China is harmed by their overregulation they are helped by their practice of creating laws and then selectively enforcing them.

In Zhuhai (near Guangzhou) there are far less taxis on the street than demand would dictate, however plenty of citizens drive around offering people rides at similar rates and everybody uses them, locals and foreigners alike. It is obviously illegal but it is so widespread and common (happens right in front of you and the police on every major street all day) that it is clear the police aren't doing anything about it.

That system is very Chinese. They make laws that would seem to restrict business and then local officials tell the police to ignore them when they deem their area is better off without them. Unfortunately this also extends to things like drugs and even kidnapping in some areas. No system is ever perfect.

If traffic is so bad as you make it out to be, why do people still choose the taxi over other methods of transportation?

The pollution argument is valid and is a case of "tragedy of the commons", but the traffic argument isn't.

Because there are no other good cheap options - both issues are examples of the tragedy of the commons and without regulation/restrictions neither will go away. The trains are fast/expensive, and the buses/taxis are cheap/slow because of all the traffic.

Pretty clear case of this: http://en.wikipedia.org/wiki/Tragedy_of_the_commons

The shared resource in this case is traffic capacity.

It's proved ineffective to regulate traffic by making cars expensive in this market. That's because cars are not profit centers for people -- they give mostly intangible benefits (increased comfort, status, etc). Taxis on the other hand are cars that are used for profit and therefore will respond efficiently to regulation (if that regulation increases capital or operating costs).

In a classic tragedy of the commons, you might have a common field, on which sheep graze. Everyone takes their sheep there, the sheep deplete the grass, and after this process has been in place for a while, the total capacity of the common field to support sheep is lower than it might be otherwise. That diminished level of sheep capacity is the "tragedy".

What's your model here? That if there were fewer cars on the roads of Bangkok, it would be able to support more cars? What would there be more of, in total, if you confiscated a bunch of people's cars?

Would you advocate banning most people from a popular public beach on the grounds of overcrowding? Would you justify that as preventing a "tragedy of the commons"?

More fresh air. Less dust. Less noise. Shorter transport times for everyone.

Congested traffic makes everyone's trip longer and less convenient. Any individual gains from using a car as opposed to not using a car as long as the traffic is not congested. Too many individuals doing what personally benefits them make it worse for everyone. This is the definition of tragedy of the commons. In the sheep example, every shepherd benefits from using the field, but if too many sheep use the field, it's ruined and noone can use it. Same with congested traffic.

"What would there be more of, in total, if you confiscated a bunch of people's cars?"

Road. Fewer cars on the road would mean a more constant speed for the cars on the road.

"Would you advocate banning most people from a popular public beach on the grounds of overcrowding?"

You generally don't have to. Since the benefits of going to the beach are relatively low, people more efficiently self-regulate their usage. That is, if a beach is too crowded to put down a towel, you'll probably leave.

That's not the case with taxis. As long as buying taxies and renting them out is profitable, taxi operators will continue to do so. To make things worse, the profitability of driving a taxi is only indirectly related to the profitability of renting that taxi out. The cost of rental is relatively stable while the money made by the driver varies considerably. The drivers absorb short-term (even medium-term) fluctuations in the market.

I couldn't say for sure since I haven't studied it properly, but I think due to traffic, at some point we have a lower capacity to move people in a timely fashion. So perhaps the thing that there could be more of, in total, is "amount of people moved per unit time".

Again, I just hopped into here, and haven't much evidence to back that up, but it's the sort of thing that seems likely.

Yeah it's called a traffic jam. As the total number of cars on the road per unit of distance increases, the speed at which those cars can travel decreases. It's not linear of course but, well, I think you get the picture.

As you add cars to a road, the throughput in terms of the number of people or cars per minute first increases. This should be pretty obvious: as you add cars to a nearly empty road, more people use it, but they all go just as fast as before.

As you continue to add cars, you reach a point where cars start to slow down, but throughput continues to go up. Once you reach a certain point, people begin to drive slower due to congestion. But at low levels, this is offset by the additional number of people using the road, resulting in greater total throughput.

Past that point, you reach another point where adding more cars does not increase throughput, as the added cars are balanced by the slowing of traffic as a whole. Beyond this point, adding more cars reduces the throughput of the road. Take this to the extreme, and you have a giant parking lot with people gradually inching forward, and people/cars per minute excruciatingly low.

No sources, but I'd think this is all fairly obvious.

This is fair. I would submit that there's a strong argument that, when the total supply of sheep goes up, everyone benefits. I don't think that's true of road throughput; that just benefits the people who are still on the road after you've put up the barrier to entry. I don't see that there's any sort of failure involved in the phenomenon of traffic jams -- I've "happily" sat in stop-and-stop traffic because it's still better than my alternatives. Participate and pay the cost of annoyance due to congestion, or don't and don't. You're on thin ground saying "you need to get off the road, so that it will function better for me".

When everybody tries to crowd onto the highway, everybody slows down. Beyond a certain point, throttling usage actually makes everybody get to their destination faster. Imagine a roadway with some kind of nasty merge which gets severely jammed up if there are too many cars. If ten cars all try to go through at once, everybody could be stuck for quite a while. If you throttle them so they go through one by one, everyone gets to their destination faster. The same thing can apply to real roads on a larger scale.

More people moving.

Car is not the goal. There are other means to move people way more efficient.

Be careful. It's very, very hard to demonstrate that other methods of transportation are "more efficient" than cars, even in heavy traffic.

Pollution? Safety? Things that unregulated free market isn't all that good at handling.

> Because favoring the trains would mean fewer cars on the road, something the city needs.

Yes, so that I can drive faster.

The over-supply of taxis has the opposite effect of a more regulated public transport.

Public transport suffers because of prioritising cars in general.

It doesn't particularly matter if cars are privately owned or taxis but as long as the city infrastructure has been designed more for automobile traffic than pedestrians, cyclists, and public transit, then these other forms of transport suffer.

To make public transit relatively more efficient, the streets must be put on a diet and narrowed down. This frees more space for pedestrians and while car travel is still possible it's more cumbersome so it effectively taxes out all but truly necessary car traffic. Try driving through Central London versus taking the tube: you can do that but you don't want to.

Bangkok has many problems with taxis. Part of it is that the fares are set unreasonably low, so drivers try to drive >100h/wk and are very poorly trained. Market pricing would probably be higher for at least some taxis. (it was bad enough that whenever I didn't want to be seriously hassled, I'd use a hotel car, at a negotiated rate. I'm fine with spending $20/hr for an S320 with driver and then tipping him 100%.)

The big problem with regulation in general is that it sets a single value, static in time and across preferences, as both floor and ceiling. For some things, that might make sense ("levels of acceptable poison in baby formula"), but for other things it doesn't make sense ("housing").

For Bangkok, I think the right thing would be to encourage public transit over taxis, but to encourage taxis over private cars. Charging a per-day fee to have a vehicle inside the city (similar to London), combined with actual traffic law enforcement, open access to getting a taxi medallion once you pass minimum qualifications, and either market rates or at least fair rates for taxi rides, would probably go a long way.

If taxis substitute for several cars, increasing taxis should decrease congestion. That is the London model, but London taxi drivers are kind of the polar opposite of Bangkok taxi drivers. Other SE Asian taxi drivers are fine, though -- Hong Kong and Singapore -- and it's easy to convert taxi fleets to NGV or Electric compared to private vehicles.

While I'm pro drug legalization, testing for meth in drivers would probably be worthwhile too. I always checked the eyes of any driver I used, since so many of them were tweaked out of their minds and thus even more unsafe than usual. (I actually had one driver assault me, too, which was kind of funny afterward).

People don't buy cars because they need them, they buy cars because they want them

Or to show that they can afford them. "Oh you take the taxis? Poor you. I actually own my own vehicle, I don't have to share"

Same situation in Beijing (and most of China actually). But then I rely on taxis heavily and avoid the over-capacity subway (different from Bangkok) unless I'm despearate, so I'm kind of a hypocrite. Taxis do not really improve traffic, and only help preserving parking spaces (which we have precious little of).

Surely usefulness from a consumer standpoint is a GOOD thing?! Just what else is the economy there for?

"The single worst part of driving in the city is dealing with agressive or incompetent taxi drivers."

That method of driving is not unique to taxi drivers - and those issues exist in several other Asian countries, regardless of the number of taxis on the road. I'll leave it at that.

"people are less likely to use the state of the art elevated train and subway, both of which run under capacity."

That's not accurate. Taking the BTS from Thonglor to MBK is faster than driving or taking a taxi at nearly all times. Thats an extreme example but traffic is so bad that its faster in a lot of cases. That's why both the BTS and MRT are always packed, with people of all classes.

You make some good points otherwise, some I disagree with like whether Bangkok is an example of an unregulated market failing or thriving, but I don't want to get too off into the weeds of a political discussion :)

I'm enjoying seeing all the Bangkok locations mentioned on HN. We should have a Bangkok HN meetup sometime!

Fuel cost is generally about 1/3 the price of operating a passenger car, so your math is pretty off. But the point still stands, prices are artificially high and enrich a ton of the wrong people.

It's 13 miles according to Google Maps. At $3.80/gallon and 25 mpg (both should be realistic), that's 15.2cent/mile or just under $2 for the gas. At the 1/3 you state (does that include insurance?), that makes the ride a total of $6 in costs. At SF minimum wage ($10.25) and assuming 50% occupancy (probably a bit on the low end), add $5.13 for a total of $11.13 for the floor price for the journey.

The 2012 mileage reimbursement rate set by the IRS is 55.5c/mile, and is supposed to take fuel, maintenance, insurance, depreciation, etc costs into account.


So they are saying its $6 + labor + profit = $60 for a 15 minute ride.

The system is broken.

You also have to account for any costs incurred between fares. Labor costs during down time, mileage accumulated between dropping off one fare and finding the next one, etc.

Not saying there aren't any inefficiencies or that there isn't established-player protectionism at work, just pointing out that a lot of the cost estimates floating around in this thread are clearly hugely inaccurate.

It's an order of magnitude estimation aka back of the envelope. Any discussion of numbers without access to internals is going to be estimate, but that doesn't mean we shouldn't try to let these inform the discussion.

I don't know the area that well but it appears to be ~11 miles from SF to San Bruno. Lets call it 11 miles, or maybe 1/2 a gallon of gas. That's <$2.

In Quito, you can go just about anywhere for not too much. USD is local currency, and it's a few dollars to go anywhere except to/from the airport.

And the city doesn't have a shortage of cabs.

And talking with drivers in my uneasy Spanish, I have found many are former doctors and lawyers who turned to taking cabs because it was more lucrative.

Fares are artificially high there but nobody is under any illusions who is in control. The city and the cab companies had an argument about pricing some time back and it lead to a taxi cab strike.... which meant cabs blocking traffic and the city was shut down (streets impassible) until the city backed down....

I was in Quito during a bus driver strike and everyone was talking about it. They even called in the army to tow busses.... It was amusing to see uniformed soldiers pushing busses around.... But there were fewer busses than cabs and so the streets were still passable.

It happens also when a business model isn't so disruptive. Regulation ends up favoring the politically connected. The more politically connected, generally, are bigger or more established interests.

This benefits politicians as well, because the ability to change regulations is useful for raising donations. "You gotta mighty fine business here, it would be a shame if we lowered your tariff...."

Its called racketeering and it's illegal. Happens all the time and it perpetuates because those engaging in it are financially rewarded if successful, which in today's system simply makes success more probable the next time.

Pushing the costs of maintenance, insurance, and safety onto the drivers and passengers is not disruptive. Taxi companies were doing that decades ago.

Yes, safety regulation costs money. The reason we accept higher prices is to avoid the catastrophic costs that could result if there was no regulation forcing taxis to maintain their vehicles, carry insurance, accept all passengers, etc. Licensing forces a minimum level of insurance on taxi providers to guarantee that injured passengers are properly cared for in the event of an accident involving the taxi provider. The cost of the insurance and maintenance requirements are the primary drivers (pun intended) of taxi costs. Uber avoids these costs (i.e, the disruption of its business model) by maintaining smaller insurance policies and pushing the maintenance costs onto drivers.

The issue is not with licensing and regulation. It's that only a limited number of taxis get authorized. That is most definitely an artificial limit, and does not help safety.

And then there's proposed laws like this, where they force a higher cost _just to prevent competition_.

I obviously can't speak for every city in the world, but typically the reason taxis are expensive is severely limited supply (e.g. medallions in NYC). In most cities in the developed world even the best insurance policies money can buy would not allow me to legally run a taxi service.

The headline here is totally sensational and factually incorrect. Has anyone actually read the linked article?

The proposed amendment sets the minimum for a sedan at 5x the flag pull rate on a taxi. So, in DC this would mean that the minimum rate for a sedan is $15 bucks. While I'm against government creating arbitrary and anti-competitive laws like this, it hardly seems as bad as forcing sedans to charge 5x more than taxis.

Further, if Uber really wants widespread support on this, they should publish some data showing how many of their customers/rides would be affected under this law. How many times in the past year has a customer paid under $15 with Uber? (I'm suspecting not many, as a percentage of total fares, but that's total speculation.)

The law puts a floor on non-taxi prices at Uber's current black car price. So 0% of their current black-car fares would be affected. What this does is prevent any future competition on price (like UberX in San Francisco). The law will literally prevent anyone (other than a taxi) from charging less than $15 for a ride, and for no obvious benefit to anyone other than Taxis.

For me, the difference here is clear. When I order an Uber, I have a certain expectation of quality, and I have the option of never using their service if they totally blow it sometime (or I can give a driver a bad rating, and if he/she gets enough he gets booted from the service). If I get a lousy ride from a Taxi, I don't have many alternatives. If a law is passed that prevents anyone else from competing on price, I have even less options.

DC Uber user here. A fact that's commonly lost on people: the District itself is actually very small, just 68 square miles. Before a recent fare hike, there was a maximum intra-district cab fare of $19, so a $15 minimum Uber fare is a big deal.

Anecdote: I live on the far eastern side of downtown, near Penn Quarter, and am able to get from my apartment to damned near anywhere in town for Uber's minimum charge (the major exception being the far reaches of NW, in the Friendship Heights/Van Ness area). Looking back at my history, only 4 of my 23 fares have been more than $15—three to the airport (in Virginia) and one to Tenleytown.

You can certainly blow this argument up if you want to leave the District, but let's be real...who would want to go to Virginia? ;)

I would gladly use an UberX service at slightly higher than cab prices to supplant all of my taxi cab use. $15 cab ride can be pricey. Their town car service will likely remain untouched but why would you want anyone to legislate against an efficient service providing high quality customer service where drivers still benefit? I can't think of an argument for it that does not involve oligopoly / racketeering arguments.

Seriously, this was down-voted? Do you work for Uber?

You made the mistake of saying negative things about a "disruptive" startup YC-backed startup. By all rights, you should consider yourself lucky you haven't been hellbanned and quartered.

Uber isn't YC backed.

This great story "Why You Can't Get a Taxi" about Uber in the DC metro area got buried a while ago.

> “I want to get a license to drive a limo,” I told him.

“There’s a moratorium,” he said, and pointed to a memo posted on the wall.

I’d like to tell you exactly what the memo said, but the commission wasn’t giving out copies—“We had some, but we ran out,” said the security guard, and no wonder, given that the “temporary” moratorium has been going on for years. The gist was that there would be no new limo licenses until the commission decided to hand them out.

“Take a picture with your phone,” suggested a nice driver who was waiting for an appointment in front of the desk.

“No pictures!” said the guard.


Is it wrong that I can't wait until taxi companies are pulverized into dust? From credit/debit machines that always seem to be "out of order" to being put in a caller queue in order to tell someone "come get me at this location", interaction with the industry somehow never seems to be the highlight of my night.

Uber is amazing. It's one of my favorite pockets of the unevenly distributed future that I've come to rely on since moving to SF. Tracking the progress of my ride on my smartphone as it makes the usually less than 3 minute journey to me is still a thrill.

Uber is maybe 10% more expensive, yet 500% more reliable. I don't know if you've ever tried to hail a cab in SF, but it's a huge exercise in frustration. Calling a dispatch service is equally vexing. I'm with you, the doom of the Taxi business can't come soon enough for me.

As much as I agree with you in loving Uber, your 10% more calculation is insanely low.

I have done comparison drives twice. Once I took a cab from SOMA to Pac heights: $8.35, Uber back to the same spot: $15.95

SOMA to Dolores Park. Cab: 7.90. Uber: 15.25

Clearly not 10%. I guess the big thing for me is that I really don't care about bottles of water or the type of car the person shows up in. I just want an on demand service that gets everything done in a sensible way. If there was a cheaper version of Uber for regular cabs I would be all over it.

The bigger picture though is how much people will fight to keep crappy businesses in business. We will hear the argument about how we cant lose jobs right now when unemployment is so high, but for the love of god, this is progress people. If some cab drivers lose their jobs in the name of progress is this really worth hurting society over?

There is a cheaper version of Uber, it's called UberX[1].

1. http://allthingsd.com/20120702/a-status-symbol-moves-down-ma...

(Check out side.cr and lyft.me! I've been calling them Uber for poor people.)

I call them uber for fun people! Even if lyft cost the same as uber, I would still take a lyft. Being able to joke around with the driver is worth more to me than leather seats and a free bottle of water.

It's fun until there's an accident. Then it wouldn't be fun at all. I'll gladly trade "joking with the driver" for a driver licensed and insured to drive other people. Companies like Lyft make a point of saying they aren't affiliated with the drivers and have no liability. That means you're depending on the driver's personal (likely state minimum) insurance.

For me, choosing to ride with vetted drivers who have the proper insurance is an easy choice. I'm willing to pay much more for that. If I feel the need to joke around with someone during the ride, I just bring a friend. It certainly costs more (all other things being equal), to have a properly insured driver come pick you up. I think it's worth it.

For me, "Fun" comes far down the list of things I look for in a transportation service. Safe cars, vetted drivers, quick pickups and professional service are all much more important to me than riding with a driver who is "fun" (or who put a mustache on the front of their car with the hopes of appearing fun). I've had a couple UberX rides now, and honestly, that's the sweet spot for me (affordable ride, clean cars, professional drivers, timely service, environmentally-friendly and properly insured). It hits all the things I'm looking for in a transportation service, at a price very close to a Taxi.

or InstantCab, which works directly with cab drivers - who are motivated to provide good customer service, instead of cab companies which are generally glorified car rental companies that only provide customer service for legacy reasons and don't care about it.

Last time I tried InstantCab some kid (who was clearly not a cab driver) in an old Toyota (which was clearly not a cab) showed up to pick me up.

Could have been me, I drive an old(ish) Toyota, but I would have asked you about 280 North. So it must have been someone else.

We are still in beta and so we usually have a backup driver, often one of us, who'll go and pickup customers if there is no taxi nearby. It's been quite interesting meeting people this way. I think I have had 5 "office hours" with Justin Kan this way :)

I asked the driver if they worked at InstantCab and it sounded like a part time thing for him. It might not have been a Toyota.

Anyway, I wouldn't have minded if I had expected it. My girlfriend was skeptical, and I wouldn't expect her to get in some random car if I wasn't with her.

I'd suggest asking riders if they're ok with a backup driver picking them up first (assuming this is even legal...)

I'll give it another try. I hope you guys succeed. TaxiMagic and Cabulous never work for me precisely because drivers will cancel your pickup at the drop of a hat if they find a closer pickup, and there's no feedback mechanism to discourage this.


The average cab driver skips a couple of hails to pick up someone a few blocks away. So, in addition to the feedback mechanism (which is coming), the driver needs an assurance that the customer will be there when they show up. By asking you for a credit card when you register, we do this a little bit better. With some competitors, even when the customer registers with a credit card, the money first goes to the taxi company, not to the driver. The company deducts a processing fee (often over 10%, 5% in SF), and may hold the money for several days (3 days in SF for some companies, two weeks in other places!).

We fix this mess for the driver, and they are incentivized to provide better service because of this. These are interesting times in the ground transportation space, with all the activity from Uber, taxis, and ridesharing folks and there is much debate about regulation. Ultimately, I hope this results in a better, sustainable solution for everyone involved.

And Cabulous app basically provides you the same level of service as a regular cab, but you get one quickly and can track it on your phone as it arrives.

I rarely have a good experience with Cabulous or TaxiMagic in SF. Drivers will drop your pickup in an instant if they see someone hailing a cab on their way to you. I usually go through 3 drivers or so before one actually picks me up.

I love your phrase about "pockets of the unevenly distributed future" and will be stealing it.

Original may be this ... "The future is already here — it's just not very evenly distributed." http://en.wikiquote.org/wiki/William_Gibson

First of all, I love Uber, Sidecar and Lyft. I really think that they are the future of transportation.

That being said, it's not that easy to just blame the public officials for all the chaos. It is a reasonable danger to these services, there are so many unknowns. The reason why the cab business is regulated in the first place was for public safety, so that cab drivers wouldn't just ask for exorbitant prices, take your luggage hostage etc. Remember, you are still just jumping into a stranger's car. Regulation was introduced to remedy these concerns (I'm not saying they are effective)

Airbnb shows how regulation is a reasonable concern. Once you go beyond the early adopters, there are so many things you have to deal with like insurance, liability, cleanliness etc. We can't just expect the world to change in an instant and naively believe everyone in the world does good.

As a DC resident who loves Uber and HATES HATES HATES the local taxicabs, you are wrong on this. This is not about regulation. This is about an established industry in a city with a one party government that has deep pockets for funding (or defunding) politicians whose election is decided in a primary, not a general election. The taxicab industry in DC is, like in many cities, corrupt down to a point where it hurts the drivers. The corruption starts at the dispatching offices, where the person taking the phone calls for pickups almost never sends a cab based on closest proximity to the pickup. Instead, they base it on who pays them the most kick backs, or perhaps a family member. In this scenario, the consumer and the driver lose due to a corrupt middleman. Talk to any cab driver who picks you up, and ask them about corrupt dispatchers. If they are honest they might tell you about their own dispatchers. Uber is good for the drivers and the consumers. It's bad for the middle men and the politicians. Sedans are already regulated, and Uber handles the "taxi" side of the equation by using GPS to determine distance/time for a fair rate.

I think you can both be correct. It's the lifecycle of regulation: it usually comes about to protect people from real edge cases and bad behavior, but then as the market and norms mature becomes a tool for incumbents to resist disruption. It's very hard to remove regulation once it's in place, even when it's so clearly not needed given new circumstances. It's even harder when the rhetoric in support of it was so heavily moralistic, "protecting the little guy".

e.g., Ask any payments startup about how they feel about payments regulation.

DC is a cesspool. I can't imagine why anyone would want to live there.

There's a difference though. If you hail a cab, you're getting a random person. You have no idea in advance about the quality of the car/ride/service. It's necessary to regulate that.

Companies like Uber, Sidecar and Lyft have to get by on their reputation, or users stop using their apps. These services don't need the same regulation, because customers can vote with their wallets. Insurance,liability and cleanliness are handled by Uber, Sidecar and Lyft sidestep those issues to bring down the price. Ultimately the customer gets to decide how much risk they want to take on, and what service to use. The answer is more choice, not price fixing to prevent honest competition.

Its a cab ride. How important is reputation? I don't think it's that important.

Quality control in the free-market is all about reputation. You don't buy a Dell laptop again after getting a crappy one.

In some industries, however, the market fails to regulate quality by itself. E.g. in the food industry, people can't see measure directly, and when people get sick from invisible contamination, they usually can't precisely trace their sickness to specific food.

E.g. in the medical industry, people are rarely repeat customers. You're unlikely to go back to the same heart surgeon because you had a good experience with them the first time.

Cabs fall in the latter bucket. Because cabbies almost never get repeat customers, and because cabs are selected based on location not reputation or quality, cabbies have no incentive to provide good, safe service. And even if customers were willing to pay more money for better service or safety, they would have very little way to express that through who they hired.

Suppose these are consistent experiences with two different companies, for you and all your friends and family.

Company A: - driver smokes - driver shows up late - driver doesn't speak English - driver drives dangerously

Company B: - driver communicates well - driver arrives right on time - driver drives quickly and safely - driver offers you a choice of different routes

In what sense could reputation not matter?

I imagine the response was in regards to cabs, where reputation doesn't matter. If you replaced Company A and Company B, with Taxi Driver A and Taxi Driver B, you'd see a system where reputation doesn't matter (especially if they can legally keep people from competing with them on price). Reputation does matter when it comes to hiring a car from a company like Uber. If they blow it, I have a real option of not using them anymore.

And the reasons for regulation go beyond consumer protection from shady drivers. Cab companies are regulated in many cities so that they, literally, are part of the public transportation infrastructure. NPR had a recent story about the taxi-towncar debate in Portland that lays out why certain regulations exist, and affords some amount of justification in this debate. Simply put; taxis can't discriminate fares/hours while towncar companies can.

Their source claims that law requires they provide a certain level of service 24 hours a day, 365 days per year regardless of demand. This includes a large portion of cabs be equipped to accommodate the disabled. Further, they are not allowed to discriminate based on the distance or size of fare.[1]

1. http://www.npr.org/2012/06/19/155305029/its-taxis-vs-limos-i...

But taxis still discriminate all the time. Call a cab to come pick you up at your house. They're legally required to come, but there's strong odds that they won't. A lot of taxi drivers will ask where you're headed before you get in. If it's to an area they don't want to go, they'll just take off and leave you there waiting and waiting.

The regulations in place are rarely (if ever) enforced. It's an issue for the free market to settle. Let consumers decide if they want 24 hour a day 365 days per year service, and they can hire the company that will meet that demand. If they want drivers to come pick them up at their house, let them choose a company that is willing to do that. Setting an artificial price floor doesn't do anything other than limit consumer's choices.

To be fair, before smart-phones were invented, the free market wouldn't have worked well for cabs. Cab drivers have zero incentive to compete on quality, because which cab/company you hire is based on who is nearby, not on your previous experience with that cab/company.

Now that you can dial up a cab on your smart phone, things might be quite different.

It would be good for Uber and other companies to take some of these reasons into account and proactively meet some of those needs that led to some of the regulations. A great example that puts them in an awesome position to debate with the taxi commission is having handicap capable cars.

Doing so would put themselves in a position where they are much harder to vilify.

Yet as a wheelchair user in SF, I have huge difficulty hailing a cab, but Uber will come pick me up in 5 minutes anywhere in the city.

There is a big big difference between "regulations say the taxi company must do X" and taxi companies actually doing X.

If NPR was interested in journalism they could try calling some cab companies for a ride form the city center out to the boonies, where the drivers were unlikely to find a return fare.

I just want to clarify, I'm not commenting on the specific regulations in place, just about the general neccessity of regulations in this space.

What happens in the case of an accident? Cab drivers are insured afaik, what happens to a Sidecar driver?

From my reading, this also makes Uber, Inc. non-regulated by the taxi commission itself.

What I'd do as a special DC-specific hack is charge the 5x rates, but then have Uber rebate some percentage back to the user. So if the goal is to charge $15 for the ride, charge the $50 required under the law and then the taxi company pays Uber $35 in "Special fuck-DC licensing fee" and then Uber pays $35 to the user in "DC victim's compensation fund".

Law is not computer code and judges are not robots. Any competent judge would clearly rule that such a fund is a blatant attempt to skirt regulation and come down like a hammer on anyone dumb enough to try it.

At which point you can challenge the legality of the law itself, and will have bought time to get enough happy users in town to make it a political issue and possibly replace the regulators.

Some legal hacks work, others don't.

This would be acceptable!

However you feel about it, this is entirely expected. The government has chosen to regulate taxis; there's a whole bureaucracy around that; there are a bunch of providers operating within the system. Uber enters and claims the rules do not apply to it, and threatens to replace the regulated market entirely. The regulators are now faced with the choice between ending all taxi regulation, regulating Uber like a taxi, or simply excluding Uber from the market entirely. If they do nothing, they know that Uber will likely replace taxis, leaving an unregulated market. If they wanted an unregulated market, they wouldn't have regulated it in the first place.

When your business is based around regulatory arbitrage, you have to know that you will only enjoy that advantage for a limited window.

You're one removed from the actual decision makers. The real decision makers are the elite who own the licenses for the taxis. In my city, there are two families who have the bulk of the licenses and if I am not mistaken, 100% of the share of licenses for taxis allowed to operate at the airport. If you think this is about regulation, you are sorely mistaken. Or another way to think about it: regulation is about protecting profits, not consumers.

Regulation is what starts the ball rolling. I won't dispute that the outcome is often sub-optimal in some ways (like the one you cited) But the point is that the result is a whole apparatus which acts to preserve the status quo: the regulators themselves (who like being employed), the operators that are profiting from the system, etc.

I'm trying to stay away from the political hot potato of whether taxi regulation is a net positive thing or not! It's not really relevant to the point I'm making.

Whether it's profit or bureaucracy that are the drivers now, I think we agree: Uber must have known this was coming. I look forward to seeing what Uber has planned; perhaps operating a dispatch service over regular taxis?

I think your analysis is correct. It seems likely they will be forced to integrate and become a taxi service dispatch infrastructure provider. It seems a smarter move to accept how "sub-optimal" markets such as these have become and deal with unreality on it's terms than to resist the corruption outright on principal.

They can't integrate -- it's the whole point of the corruption, to maintain a cartel with limited supply, so as to inflate prices and profits. They don't want them to operate "within the rules" -- they want them to not operate, period.

No new taxis in D.C.:

The supply of cabs is limited by a licensing exam for drivers that's been closed since 2010.


From an article about D.C.'s plans to establish explicit supply caps (quotas), like the ones already in place in NYC, SF, etc.

TaxiMagic seems to be operating without any government interference, by integrating with the existing taxi services.

They can integrate if they can make a successful bid to join the cartels or gain significant leverage with the uber-cartels ( governmental entities ).

Do you guys even have any idea why taxis are regulated in the first place?

During the Great Depression, many taxi drivers drove unsafe cars. There were many accidents involving unlicensed drivers of unmaintained cabs. The medallion system was introduced to improve the safety of taxis by imposing minimum capital requirements, i.e., the cost of purchasing/renewing the medallion, and ongoing compliance requirements (insurance, vehicle maintainence, etc.).

Uber has not negated the underlying justification for the medallion system. All it has done is to take all of the risks that taxi companies normally accept and push it on to the drivers and passengers. Uber's disruptive edge is essentially its exploitation of its customers/service providers.

When your business is based around exploiting the financial naivete of others, you have to know that you will only enjoy that advantage for a limited window.

Safety regulations are logically distinct from fare regulations. No one would use the fact that the US government sets food health rules with the FDA as a reason for them to set food prices.

Price regulations are often linked to safety regulations. You specify minimum prices to enable the service providers to afford the safety regulations.

A ton of people in this conversation are making a ton of assumptions about the reasons for taxi medallions and the effects that they have on the ecosystem and marketplace. Given that I doubt any of us run cab companies, this seems silly: more homework is needed. ;P

It seems like there is a a whitepaper that, in three parts, went into some detail on the situation in NYC, examining the causes and pulling apart the proposed solutions, for various of the complaints people have about the system.

http://www.schallerconsult.com/taxi/taxi1.htm "Factors of Production in a Regulated Industry: New York Taxi Drivers and the Price for Better Service"

http://www.schallerconsult.com/taxi/taxi2.htm "Villain or Bogeyman? New York's Taxi Medallion System"

http://www.schallerconsult.com/taxi/taxi3.htm "Fixing New York City Taxi Service"

What they can try to solve this if it passes is to give forward credit to future rides.

e.g. if a ride costs $7 dollars, charge the user $15 and give them an $8 discount off the next ride. This gives users an incentive to use Uber again and again since they will always have credit with Uber.

If a user consistently uses less than $15, do something where they get entire rides "comped". You can't charge less than $15, but I bet this law has a loophole for "free rides" because no charging is involved.

Either way, some creative thinking with payments + loyalty benefits should help them get around this if this law eventually passes.

I lived in DC for the past year and a half and never heard of Uber. Considering my tech-minded friends i'm surprised at the lack of advertisement.

Look at this Washington Post article from 2006, before the fare system was changed from zones to meters: http://www.washingtonpost.com/wp-dyn/content/article/2006/06...

On the old zone system: ""Last night, I had to go to a dinner, and the cab that brought me back charged me twice as much as the cab that took me there," he said as he waited for another taxi outside his downtown hotel. Well, maybe not quite twice as much, he amended, but $12 vs. $19.50."

And on meters: "But opponents of the meter say it would bring unwanted changes to D.C. taxi service: Residents traveling from poorer outlying neighborhoods in Southeast or Northeast probably could not afford a meter ride, they say, because it could add up to much more than a zone fare. Another reason fares could rise is that the meter would not stop clicking when the cab is idling in one of the city's infamous traffic jams." and "If they get the meters, the only cab you'll see in this town will be at hotels, like the other major cities," Wright said. "You won't find them anyplace else. You won't find them in the neighborhoods."

The regulation on fares forces taxicabs to pass up many people who want to go outside areas with heavy foot traffic or deep pockets because they aren't going to be able to find a return fare. As such, there are "taxi deserts" all over the city where you might see one taxi every 45 minutes, and they've already got a fare, or their meter is off. Slugging through a 1.5-hour bus ride is often the most reliable form of transportation for these areas.

In order to maximize their payout, plenty of DC taxis will take zig-zagging routes, go slower than the speed limit, and ride their brakes. A 5.6-mile ride from the Atlas District up to Petworth may cost the same as an 8.5-mile ride from Columbia Heights up to Bethesda, using the meter system. Take a cab from outside the district and you'll find your trip takes significantly less time.

There's probably still a market for an Uber service, even with this brazen attack on (what seems to me as fair) competition. But don't expect the taxi lobby to roll over in a town where it took 75 years just to introduce meters.

Standard government corruption and central planning. Why do we need the government to manage taxis? Self driving cars are going to further destroy this industry.

Have you been somewhere that Taxi's are unregulated? After they refuse to give you your luggage until you pay $20 over what was agreed, rob you, leave you at the wrong destination, etc... is when you realize taxi regulation was setup to protect consumers.

edit To clarify, I'm not saying there are no problems with the current cab systems, only that public safety and consistent fares are one of the main reasons cabs are regulated by the government

I've been in places where taxis are regulated and I've been ripped off too, primarily boston and new york:

1. The taxi driver refused to turn on his meter and then just demanded a fee.

2. Taxis refusing to take you where you want to go, i.e. getting a cab to brooklyn.

3. Taxis not showing up when they've been reserved ahead of time, early morning airport runs.

4. Taxis taking long and wrong routes to drive up the fare.

5. Taxis not knowing the area, and not having a GPS, so they get lost and then just give up leaving you somewhere.

6. Being in a taxi where the license picture does match the driver.

So, I've had lots of bad experiences of "regulated" taxis. I've had lots of good experiences too. As for unregulated, I've been in a few in south and central america, not sure if they were regulated or not.

Saying that you've had bad experiences with regulated taxis is not a counter argument. For all six of those, there is a number you can call to report them. And none of them are all that bad.

Get into an unregulated taxi, and you're at their mercy.

Yes, it's a good argument. It shows how the regulation that ostensibly was set up to protect customers does not consistently do that. And what am I going to do with a phone number? Spend 20 minutes on hold before I can tell a disinterested minimum wage call center employee about how my would-have-been $50 missing taxi caused me to miss my $1500 flight so it's recorded in some log that nobody ever reads?

The fact that some people might accept the service-failures listed by the GP as not being bad just shows how low expectations to taxies has become. Luckily some people believe taxies can do better.

Finally, all but the stauchest libertarians would accept a sensible minimum of regulation that would provide a minimum of protection, including mandatory insurance and conspicuous display of photo ID inside the vehicle.

You haven't been ripped off by an unlicensed cab before, have you? The licensed cabs operate in a manner that will at least keep them from having their medallion taken away. Unlicensed cabs have nothing to fear.

No. I don't ride in unlicensed cabs. That doesn't keep me from wanting significantly less regulation.

I have been ripped off by licensed ones, though - twice, I think. Both cases involved foreign counties and drivers who conveniently and suddenly lost their command of English.

Like I said, being ripped off by licensed cabs isn't an argument for less regulation. It's an argument for something else, possibly more regulation. Show me that cabs don't need licensing and regulation using unlicensed cabs as an example, and you'll have an argument.

Uhm, I wasn't giving a counter argument. I was replying to your question. What you want to do with that is up to you.

Any demonstration in the vein you propose will rely on a measure of caveat emptor. I would guess I am willing to accept a greater degree of this (trading strict consumer protection for better competition leading to better service and lower prices) than you seem to be.

Have you ever done that? Does it work?

I’ve always been to flustered to get a medallion number when things are going south. And I always figured that it didn’t matter anyhow.

Did you complain to the authorities? Every regulated cab I've been in has a hotline you can call for these types of things.

1) If the meter isn't running, you don't pay. If he refuses to release your bags, call the police. This constitutes theft (and possibly false imprisonment if he won't let you out of the passenger area), so you may be able to call 911.

2) Report the company to the local taxi licensing commission. After a few complaints, they lose their license/medallion. One caveat: taxis at the end of a shift are allowed to pick their destination. If the taxi isn't at the end of the shift, let the local bouncer/valet know and that taxi won't be allowed back.

3) See #2.

4) See #2.

5) See #2.

6) See #2. Also, call the police because you are probably not in a licensed taxi.

You don't need taxi-specific regulations to stop people being robbed and cheated. For legal matters you have legal recourse, and for customer service problems you can call the taxi company. Even if some regulation is necessary to protect the consumer, though, it's clear that much of it also exists to protect the industry. You don't need wide-reaching oversight powers or price controls to enforce minimum service requirements.

Looking to the future, things like smartphones and Google Glass will lessen the need for consumer protection by making user-reviews always at-hand. If you look at a taxi and see "Two stars, poor service" automatically overlaid, or if you get a list of rated companies when you try to call a cab, the market will be able to weed out bad eggs. This is a far more democratic solution than legislation.

How does limiting supply and artificially raising prices "protect the consumer"?

And it sounds like your pitfalls are already illegal.

Also regulating and managing supply are too very different things, if all one has to do is register and fill out forms then I'd have less of a problem. Unfortunately it seems they'd also like to ensure demand and centrally plan the supply.

Thats not an issue of regulation. Theft is already illegal as is fraud. Telling someone they must pay more after a transaction is a violation of an implicit contract. Adding further regulation doesn't stop shit like that.

Can someone please explain why government intervention is necessary here, or how any of this proposed legislature is even legal? When new competitors are forced to set prices to 5x the incumbents, who is winning? How does that benefit the customers? I thought the government was supposed to serve the people, not dying taxi companies that refuse to innovate...

Competition between brokers and reputation systems thereof replace the need for certification/regulation by the government.

This behavior by the govt is pressure exerted by the desire for homeostasis of control. Shameful.

I'm not surprised that this has happened- vested interests are hardly something new in government lobbying. But I am amazed at how brazen it is- even calling it the "Uber Amendment". I suspect that they will get a rude awakening of the new realities of open government soon enough.

Those of us who live in and around the District have been waiting for that "rude awakening" for a very long time.

It's worth pointing out that Marion Barry (http://en.wikipedia.org/wiki/Marion_Barry) is still sitting on the DC Council.

Somewhere in my parents house, I still have a picture from the Post of Barry flicking off the photographer. They printed it large, on page B1 in 89 or so.

I can't believe he's still around.

If the amendment is passed still titled as the "Uber Amendment," would the law be considered a Bill of Attainder against Uber? ( http://en.wikipedia.org/wiki/Bill_of_attainder )

No. A bill of attainder refers to legislative bill declaring someone guilty of a crime. The Amemdment merely prohibits Uber X's planned business model. UberX would not be guilty of anything unless it went ahead with its planned business model.

What is it with the armchair lawyers on HN today?

I freely admit that I'm not a lawyer, which is why I asked a question instead of making a statement. I thank you for your insight, though, as I see you are a lawyer.

Sorry about my statement about the armchair lawyer bit. On other threads today, commenters have been making assertions of the law that have no basis in reality, so my fuse was a little short and I misinterpreted your comment.

What can we do to help? Something concrete, I'm at a loss, ideas appreciated. Bitching about it here is just preaching to the converted. Maybe someone from über can make suggestions?

I love using über. I like to be able to relax at the table finishing my coffee as I wait for the car to arrive. I hate standing on the side of the street in the rain with my hand in the air wondering when a cab will show up. I hate paying for a driver of a pre-ubercab car service to wait outside for four hours while I have a drink with friends. Uber eliminates all this crap.

I'd like to help, love to hear a constructive suggestion on what I can do.

As we speak, Chicago taxi drivers are protesting the fact that fares haven't gone up in seven years, while their expenses have.


That's right, they can't even set their own fares. Taxis are regulated to astonishing degrees. I don't know why they aren't simply brought on as full-fledged government employees in many of these cities. They'd almost certainly be getting paid better.

Elected officials should be ashamed of themselves. What are they going to do when Side.cr or Lyft arrives in D.C. ? Ban private car ownership?

Wait, wait just a minute. I thought a free market meant you were free to charge what you wanted? /sarcasm. This is ridiculous on so many levels, sounds like Uber needs to fight back and do a little lobbying of their own. The real issue here is that Uber has proven to be both cheaper, faster and more reliable than any NYC taxi service let alone any taxi service anywhere in the world. Perhaps instead of lobbying maybe these taxi super-lobbyists should be lobbying their own companies to pick up their acts. Then perhaps they wouldn't feel the need to resort to dirty tactics as opposed to doing what they should be doing like most people in business do when they feel threatened by a competitor: undercut the competitors offering.

Sounds like they've got plenty of cash to lobby that could be better spent improving NYC taxi services.

Uber is not a taxi service. It is a car service (i.e., a limousine service).

Taxi service: picks up any passenger, off the street, anywhere, without any prior arrangement to do so. The passenger may not have any opportunity to investigate the taxi provider ahead of time, or to choose their taxi (i.e.,at airports or hotels), so regulation is placed on taxi providers for the protection of passengers.

Car service: picks up a passenger by virtue of a prior arrangement. In some locations, that arrangement can be be minutes old; in others, the arrangement must be made hours in advance. The passenger has the opportunity to investigate and choose the car service provider, so regulation is significantly reduced.

Uber is a taxi service in many ways. Picking someone up to take them to a destination is very much how taxi's work. Fair enough you can't flag down a limousine from a sidewalk, but you can also call and arrange for a taxi to pick you up at an arranged time like Uber and a limousine. Lets not get confused here, the taxi lobbyists wouldn't feel the need to resort to these kind of tactics if they felt like Uber wasn't competition.

Looks like the Council tabled the matter until november.


Does anyone know if this means Uber gets to operate Uber X in the meantime?

When I lived in LA, I heard many times that the taxis there were run by the Russian mob. I wonder how Uber will fare against them. Russian gangsters arent really a group I'd want to be the one to "disrupt"

If taxi services would keep up with technology and allow the market to make and break companies, Uber would not be able to eat their lunch. Same story, different industry.

So I've scanned the article...

As a DC resident,and one who has a partner that's a social worker.

The "corruption" that is blocking your business maybe partially fueled by the taxi drivers who don't want to become unemployed. Almost all drivers fall below the poverty line and rely on social services to support them and their families.

I'm not really sure how the cab companies do with revenue and profit, but you'd probably be best off appealing to hiring the drivers to circumnavigate this issue.

DC's taxis are really the worst, so it's not surprising that they are fighting back so hard to kill a perceived threat to their monopoly. Still, I haven't used Uber much due to the high prices compared to taxis, but the new lower-priced UberX could be a real game-changer if it isn't squashed by the government.

Is this the same as New York where taxis are overpriced but the money is all flowing to the rich license holders?

We have the same kinds of problems in Paris, where it is impossible to try to increase the number of licences (hence making the price of the licenses held by current cab drivers go down) without a city-wide strike that paralizes the city.

Using law instead of tax dollars amounts to the exact same thing: State control and interference. Reminds me of the bad old days of socialism.

"First they ignore you, then they mock you, then they fight you, then you win." M. Gandhi

Don't hold your breath waiting for me to mock you.

And this is why Ron Paul is President.

Straight out of an Ayn Rand novel... :)


This only affects residents of the city of Washington D.C.

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