'We Were Wiped Out’: New Yorkers Preyed on Chicago Cabbies(nytimes.com)
nytimes.com
'We Were Wiped Out’: New Yorkers Preyed on Chicago Cabbies
https://www.nytimes.com/2019/10/04/nyregion/taxi-medallions-chicago.html
57 comments
What I don't understand, is why someone would be willing to buy 15 medallions at an "inflated price." My point being, you should have some basis on the PV of cashflows you can generate with each medallion. It doesn't seem like an extremely complicated financial problem in my eyes. At some point, you're cutting into any investment return you receive through cash flow and you're now expecting your returns to be generated through the appreciation of the medallion. That's probably where I would stop and think, I don't need to buy 15 of these things.
The people that borrowed to get them were greedy speculators too, and they just aren't talking about it.
They just forgot that “when your taxi driver is talking about investing, its time to sell” and they were the literal taxi drivers in the adage.
The blunt reason is because they are the bottom/edge of society’s universe of investors, so there is nobody else to sell an asset to at a higher price.
The same result would have happened eventually, the arrival of Uber & Lyft exacerbated the outcome much faster.
They just forgot that “when your taxi driver is talking about investing, its time to sell” and they were the literal taxi drivers in the adage.
The blunt reason is because they are the bottom/edge of society’s universe of investors, so there is nobody else to sell an asset to at a higher price.
The same result would have happened eventually, the arrival of Uber & Lyft exacerbated the outcome much faster.
It's like flipping homes in 2007. You come for the ARM and the 20%+ annual increase and you get carried out in a body bag. (But, all the cool kids were doing it!)
The NYT is such garbage these days. Some speculators lost money to other speculators. That's how speculation works. Nobody is being 'preyed' upon. This article is unbelievably disingenuous.
People were, essentially, sold an investment asset with the implication that it was going up, the seller not disclosing & misrepresenting the fact that they intended to glut the market and thereby drive down the price. It's technically not securities fraud, but it has a similar flavor, so I wouldn't characterize this as a market working as intended.
> People were, essentially, sold an investment asset with the implication that it was going up
Isn't that how all investment assets are sold?
> the seller not disclosing & misrepresenting the fact that they intended to glut the market and thereby drive down the price
I mean, the seller wasn't trying to crash the price. They just had a bunch of medallions to offload. It doesn't seem like it's incumbent upon a seller to inform the market that it has other medallions to sell. Certainly no other financial markets work this way.
> It's technically not securities fraud, but it has a similar flavor, so I wouldn't characterize this as a market working as intended.
It really doesn't, though. This is how all markets work. Nobody informs buyers of AAPL stock that they are trying to sell a billion dollars worth. They sell little chunks at a time to minimize their impact. That's just good order execution.
Isn't that how all investment assets are sold?
> the seller not disclosing & misrepresenting the fact that they intended to glut the market and thereby drive down the price
I mean, the seller wasn't trying to crash the price. They just had a bunch of medallions to offload. It doesn't seem like it's incumbent upon a seller to inform the market that it has other medallions to sell. Certainly no other financial markets work this way.
> It's technically not securities fraud, but it has a similar flavor, so I wouldn't characterize this as a market working as intended.
It really doesn't, though. This is how all markets work. Nobody informs buyers of AAPL stock that they are trying to sell a billion dollars worth. They sell little chunks at a time to minimize their impact. That's just good order execution.
> That's just good order execution.
The movie Margin Call makes an excellent depiction of what is just good order execution. Skilled sellers know if they're selling at the top. Should the buyers in the movie not have been upset at the sellers because that's how markets work? Yes and no. The buy/sell relationships in the movie worked because there had been years of trust built up, which the Kevin Spacey character was worried about destroying. He warned that they'd never be able to buy/sell in the market again if they offloaded their position in the manner they did, that nobody would trust them anymore. When there's a salesperson involved, people who buy investments typically trust the salesperson, or else they wouldn't buy.
You can argue that buyer beware should be the default defense. And this is not wrong, but if the salesperson is good enough, they break down that defense anyway. More importantly, taking the trust out of the transaction also takes the humanity out of the transaction. I don't think we should blame buyers if they were sold something on deeply human emotions (trust, camaraderie) and then have opposite deeply human emotions (betrayal, anger) if they find they were played. The sellers knew what they were doing from the beginning, according to the article. Hence, the buyers felt played. That's not something where I'd blame the buyer for being unsophisticated. I blame the seller because when one side has significantly asymmetrical information, that is preying.
The movie Margin Call makes an excellent depiction of what is just good order execution. Skilled sellers know if they're selling at the top. Should the buyers in the movie not have been upset at the sellers because that's how markets work? Yes and no. The buy/sell relationships in the movie worked because there had been years of trust built up, which the Kevin Spacey character was worried about destroying. He warned that they'd never be able to buy/sell in the market again if they offloaded their position in the manner they did, that nobody would trust them anymore. When there's a salesperson involved, people who buy investments typically trust the salesperson, or else they wouldn't buy.
You can argue that buyer beware should be the default defense. And this is not wrong, but if the salesperson is good enough, they break down that defense anyway. More importantly, taking the trust out of the transaction also takes the humanity out of the transaction. I don't think we should blame buyers if they were sold something on deeply human emotions (trust, camaraderie) and then have opposite deeply human emotions (betrayal, anger) if they find they were played. The sellers knew what they were doing from the beginning, according to the article. Hence, the buyers felt played. That's not something where I'd blame the buyer for being unsophisticated. I blame the seller because when one side has significantly asymmetrical information, that is preying.
I keep seeing this statement but not sure what other sources to consume. What is a good alternative?
The Wall Street Journal is generally more accurate and even handed on business and finance stories. Although they do have some bias on other topics.
Wsj opinion is irrational crazy town. The news side has managed to be impartial.
It's tough. I still read the NYT too, I just try to be critical about its biases. I also like to read blogs like
https://marginalrevolution.com
https://slatestarcodex.com
And in general, finance journalism is good too (e.g. bloomberg/wsj/economist). It has its own biases, of course, but they're often more transparent. The bias of finance journalism is in favor of money. Anything that threatens people's money, they're against. But that bias is fairly easy to understand and correct for.
https://marginalrevolution.com
https://slatestarcodex.com
And in general, finance journalism is good too (e.g. bloomberg/wsj/economist). It has its own biases, of course, but they're often more transparent. The bias of finance journalism is in favor of money. Anything that threatens people's money, they're against. But that bias is fairly easy to understand and correct for.
Modern media, especially news outlets, is sd marketing. These are ad marketing companies, and news is the byproduct of selling ads. The more slanted and accusatory an article, the more interesting, and the more ads it sells. it's easy math.
This article is baffling. It's full of very loaded language (e.g. prey, seized control, squeezed, etc). And the evidence and explanations they provide is even more baffling and contradictory.
> Some adopted an especially aggressive approach, according to documents and interviews. First, they purchased medallions at bargain rates and established big fleets of cabs. Then, they pumped up medallion prices. Finally, they sold their medallions to their drivers and to rival fleet operators just before the collapse.
Take each claim one by one:
> First, they purchased medallions at bargain rates
How did they get them at bargain rates?
> Then, they pumped up medallion prices.
Again, how? Did they somehow drive the population increase in NYC?
> Finally, they sold their medallions to their drivers and to rival fleet operators just before the collapse.
Did they sell the medallions or finance them to drivers, because earlier in the article it says:
> They inflated medallion prices, provided high-risk loans to buyers and collected interest and fees before the bubbles burst and the markets collapsed.
If they financed them, the drivers defaulted and the collateral was worth a lot less than originally valued at.
The whole article is a weird hodge-podge mess of trying to find victimizers and victims. People who bought medallions between certain years are victimizers but those that bought them after the peak are victims and New Yorkers (?) in Chicago are especially bad.
> Some adopted an especially aggressive approach, according to documents and interviews. First, they purchased medallions at bargain rates and established big fleets of cabs. Then, they pumped up medallion prices. Finally, they sold their medallions to their drivers and to rival fleet operators just before the collapse.
Take each claim one by one:
> First, they purchased medallions at bargain rates
How did they get them at bargain rates?
> Then, they pumped up medallion prices.
Again, how? Did they somehow drive the population increase in NYC?
> Finally, they sold their medallions to their drivers and to rival fleet operators just before the collapse.
Did they sell the medallions or finance them to drivers, because earlier in the article it says:
> They inflated medallion prices, provided high-risk loans to buyers and collected interest and fees before the bubbles burst and the markets collapsed.
If they financed them, the drivers defaulted and the collateral was worth a lot less than originally valued at.
The whole article is a weird hodge-podge mess of trying to find victimizers and victims. People who bought medallions between certain years are victimizers but those that bought them after the peak are victims and New Yorkers (?) in Chicago are especially bad.
The article does explain how they inflated the prices, they sold them to each other at increasingly higher prices, which kept bumping up the recorded last sale price. At the risk of violating HN rules, I have to say that you didn't read the article.
I doubt that would make sense financially. Prior to 2017, there was a 5% transfer tax on medallion sales [0]. I believe they would also have to pay either a capital gains tax or treat the gains from the sale as income. It would be a very expensive strategy to get a paper uptick in the last recorded sale price that you may or may not benefit from. And there are all sorts of other regulations that manipulate the market and distort sales. For instance prior to 2017 owners of single medallions were limited to selling to someone who doesn’t already own one [0]. The sales from one member to another could have just been a family business arrangement where one group of individuals brings in another business partner.
Instead of some bizarre conspiracy theory about unnamed group of individuals that can manipulate prices, lure just the right speculators at the very peak and move on, why can't it just be that there are some speculators that did well and others that entered too late and lost out? Why does everything have to be viewed as a victim/victimizer paradigm?
[0] https://www.cbsnews.com/news/how-much-is-a-nyc-taxi-medallio...
Instead of some bizarre conspiracy theory about unnamed group of individuals that can manipulate prices, lure just the right speculators at the very peak and move on, why can't it just be that there are some speculators that did well and others that entered too late and lost out? Why does everything have to be viewed as a victim/victimizer paradigm?
[0] https://www.cbsnews.com/news/how-much-is-a-nyc-taxi-medallio...
I found the article to be a sad tale, rather than defining it as baffling. The answers to most of your questions can be found in the article, which describes the latent demand for medallions, allowing the opportunistic speculators to swoop in. It was aided by the city, which no doubt welcomed the additional revenue, and didn't do anything substantial to prevent a bubble from forming and exacerbated the misery. The effect of the pump and dump was compounded by the victims, who share a common thread, and their stories pepper the article. This vulnerable group was targeted for it's high susceptibility to any number of cons, and were also the most likely to ignore the zeitgeist of the app-model.
Many were immigrant cabdrivers who could not speak English fluently and signed loans they could not afford, lured by the promise of easy wealth and a secure future.
Many were immigrant cabdrivers who could not speak English fluently and signed loans they could not afford, lured by the promise of easy wealth and a secure future.
> ... allowing the opportunistic speculators to swoop in ... This vulnerable group was targeted for it's high susceptibility to any number of cons, and were also the most likely to ignore the zeitgeist of the app-model.
This is where the narrative of victim and victimizer breaks down. Consider one of the sad tales from the article:
> “They used us to get rich,” said Demetrios Manolitsis, 52, a Chicago cabdriver from Greece. Mr. Manolitsis, who started driving in 1992 and owned an extra medallion as an investment, said New Yorkers in Chicago convinced him to borrow money to buy 15 more medallions at the height of the bubble, when prices were skyrocketing and the asset seemed invincible. He is now buried in debt and on the brink of losing everything.
He's both an opportunistic speculator buying 15 (!) medallions and a victim who was conned. Depending on when the market took an eventual downturn he could have been a villain. He could have been part of the ominous "they" sprinkled throughout the piece!
This is where the narrative of victim and victimizer breaks down. Consider one of the sad tales from the article:
> “They used us to get rich,” said Demetrios Manolitsis, 52, a Chicago cabdriver from Greece. Mr. Manolitsis, who started driving in 1992 and owned an extra medallion as an investment, said New Yorkers in Chicago convinced him to borrow money to buy 15 more medallions at the height of the bubble, when prices were skyrocketing and the asset seemed invincible. He is now buried in debt and on the brink of losing everything.
He's both an opportunistic speculator buying 15 (!) medallions and a victim who was conned. Depending on when the market took an eventual downturn he could have been a villain. He could have been part of the ominous "they" sprinkled throughout the piece!
>He's both an opportunistic speculator buying 15 (!) medallions and a victim who was conned. Depending on when the market took an eventual downturn he could have been a villain. He could have been part of the ominous "they" sprinkled throughout the piece!
I would describe him as a victim of greed, as he already had another medallion as an investment. For him to be regarded as a 'speculator' in this context ─ he could have averted financial ruin by conducting due diligence before acquiring toxic assets and/or hedge his bets. If one were to consider him opportunistic, he should have been savvy enough to know, when to get out and leave others holding the bag. Since, he seems to have exhibited none of the predatory behaviour associated with a conman, it is a bit presumptuous to speculate on his villainous tendencies.
I would describe him as a victim of greed, as he already had another medallion as an investment. For him to be regarded as a 'speculator' in this context ─ he could have averted financial ruin by conducting due diligence before acquiring toxic assets and/or hedge his bets. If one were to consider him opportunistic, he should have been savvy enough to know, when to get out and leave others holding the bag. Since, he seems to have exhibited none of the predatory behaviour associated with a conman, it is a bit presumptuous to speculate on his villainous tendencies.
Explain to me a framework for determining victimhood.
> For him to be regarded as a 'speculator' in this context ─ he could have averted financial ruin by conducting due diligence before acquiring toxic assets and/or hedge his bets.
Is the term speculator contingent on financial success?
> If one were to consider him opportunistic, he should have been savvy enough to know, when to get out and leave others holding the bag.
Is opportunistic contingent on someone being able to tell the future and know when prices are at their peak?
> Since, he seems to have exhibited none of the predatory behaviour associated with a conman
I imagine he wasn't using all 15 of his medallions simultaneously. Presumably he was renting out his medallions to other and profiting off their labour. Is this predatory?
> it is a bit presumptuous to speculate on his villainous tendencies.
You miss my point. I reject the entire notion of victim and victimizers in this context. The analogy doesn't fit. If you buy 15 of a valuable and high growth asset on credit, you're a speculator. And that's fine. There are no villains here, just some who were fortunate in timing and other who were less fortunate.
> For him to be regarded as a 'speculator' in this context ─ he could have averted financial ruin by conducting due diligence before acquiring toxic assets and/or hedge his bets.
Is the term speculator contingent on financial success?
> If one were to consider him opportunistic, he should have been savvy enough to know, when to get out and leave others holding the bag.
Is opportunistic contingent on someone being able to tell the future and know when prices are at their peak?
> Since, he seems to have exhibited none of the predatory behaviour associated with a conman
I imagine he wasn't using all 15 of his medallions simultaneously. Presumably he was renting out his medallions to other and profiting off their labour. Is this predatory?
> it is a bit presumptuous to speculate on his villainous tendencies.
You miss my point. I reject the entire notion of victim and victimizers in this context. The analogy doesn't fit. If you buy 15 of a valuable and high growth asset on credit, you're a speculator. And that's fine. There are no villains here, just some who were fortunate in timing and other who were less fortunate.
> New Yorkers (?) in Chicago are especially bad.
Well that goes without saying. (I jest of course. I have no dog in this fight and think they are both great cities.)
Well that goes without saying. (I jest of course. I have no dog in this fight and think they are both great cities.)
I used to follow the primary public company in this space - MFIN - fairly closely. This article seems off base and to disclose I have zero investments in the area. The issue here is that when taxi fleets were a regulatory rationed monopoly then the medallions were worth a lot. When tech disrupted hail cabs that collapsed. There really isn’t a private sector “villain” to pin blame on for this. And yes for many years the big owners of medallion fleets had excess influence over the regulators due to classic influence wielding. That blew up when residents of places like NY were vocal that they like Uber-Lyft versus the old system.
This article, as well as many others about the industry, have pointed out that the collapse was not due to so-called "ride sharing" companies. I think one analysis said that was less than 50% of what caused the crash. This article, and others, state that the crash would have happened regardless. One of the pieces of evidence is the massive runup of medallion values. It was a classic bubble that was not supported by fundamentals.
It seems like some intermingled flavors of market manipulation and cartel-like monopoly mixed with a pump-&-dump scam.
Artificially limiting the supply of taxis seems like a silly thing to do in the first place. It's not surprising that it didn't work out well.
Well, I can think of at least one good reason for a medallion system: it helps limit the number of cars on the road. (Let's ignore Uber and Lyft—they are taxis and should need medallions, but we're not enforcing the law properly.)
Of course, it would help a great deal if the medallion system were combined with limits on private vehicles...
Of course, it would help a great deal if the medallion system were combined with limits on private vehicles...
>limits the number of cars on the road"
Would it though? If the supply of taxis was more ubiquitous is would drive down relative demand and therefore prices, as well as making it much easier to find one. The net effect could be fewer people driving their own cars and an overall net reduction of cars on the road.
Though I think better, ubiquitous mass transit would do far more in that direction, though the infrastructure costs for that are enormous: The figure $1 billion per mile of rail comes to mind. Better bus transit might work much better though for cheaper.
Would it though? If the supply of taxis was more ubiquitous is would drive down relative demand and therefore prices, as well as making it much easier to find one. The net effect could be fewer people driving their own cars and an overall net reduction of cars on the road.
Though I think better, ubiquitous mass transit would do far more in that direction, though the infrastructure costs for that are enormous: The figure $1 billion per mile of rail comes to mind. Better bus transit might work much better though for cheaper.
It’s a terrible way to limit the number of cars. A variable toll would be a much better way of limiting the number of vehicles.
I hate the idea of "congestion pricing" tolls. Bridges & tunnels into NYC run $15. $300/month for daily commuters. I'm sure that's manageable for some commuters, but poorer folks are disproportionately impacted and it significantly raised bus fair as well: About $260/month for most routes that are only 10-15 miles outside of NYC. I think better mass transit options are a better option to reduce congestion, and therefore the need for congestion pricing.
Congestion taxes/fees incentivize taking public transit options. I don't think anyone arguing for congestion tax is along arguing against mass transit, the two go hand in hand.
I haven't seen either a decrease in congestion or an increase in mass transit infrastructure spending in NYC as a result of congestion pricing. And congestion pricing applies to busses as well, increasing mass transit cost. So commuting to NYC by car costs about $300 a month, but busses are still about $240 a month. Really not enough to strongly incentives mass transit.
Maybe what it boils down to for me is that congestion pricing, in theory, may be a valid option. But in its implementation it accomplishes very little except increasing bloated budgets for organizations that focus too little on their actual mission.
Maybe what it boils down to for me is that congestion pricing, in theory, may be a valid option. But in its implementation it accomplishes very little except increasing bloated budgets for organizations that focus too little on their actual mission.
> So commuting to NYC by car costs about $300 a month, but busses are still about $240 a month.
Of course, that $300 leaves out the cost of the car, maintenance on the car, insurance, etc. The cost of the bus needs to account for all of that.
Of course, that $300 leaves out the cost of the car, maintenance on the car, insurance, etc. The cost of the bus needs to account for all of that.
[deleted]
Exactly, make the car cost $3,000 and you’ll start seeing some changes.
That's probably true, but then there needs to be a rapid coinciding ramp up of public transport like doubling or tripling the fleet of busses. Which could work! And it would have the added benefit of ever so incrementally reducing emissions from vehicles.
Mass transit is not an option in the next decade. And the solution to prices impacting poor people is to give poor people money, not to remove the mechanism by which resources get allocated (transparent pricing).
Mass transit requires money to pay for it; congestion pricing brings in money. The two ideas aren't in opposition to each other; they are complementary.
Mass transit should pay for itself. A bond issue that is paid back out of the revenue generated. Money generated from congestion pricing though has (in NYC) simply been funneled to the increasing Port Authority operating budget with no impact on congestion as there are more cars than ever. If it was genuinely used for capital improvement to mass transit I wouldn't mind as much.
Congestion pricing is great and we should do that to. However, taxis generally can enter the city once and drive around all day.
Why should we ignore Uber and Lyft? They exist, they do the same job, and they don't seem to be making the roads any more clogged than they were already. So maybe they show that in practice, we don't need medallions after all.
Maybe people need medallions? If you don’t have a medallion then you have to return to the place from which you came. There would be fewer people on the roads and sidewalks. NYC sidewalks are too crowded and we should limit the number of people allowed to use them. The people-medallion system could be used in the Bay Area as well since housing is scarce. You could also require such a medallion to work and access public benefits.
It seems like we do have such a system but we’re not enforcing the law properly.
It seems like we do have such a system but we’re not enforcing the law properly.
Might make sense to invoke Chesterton’s fence a little here. The reason those rules came into effect was that there was a boom and crash tendency, so there would be way way too many taxis, nobody would make a living as a result, then they’d all go out of business and there would be too few.
Then it seems that would be a problem today, now that we also have Uber and Lyft.
But really, I don't see what's unique about the taxi market as opposed to any other market, where we don't put a limit on supply and things work out just fine.
But really, I don't see what's unique about the taxi market as opposed to any other market, where we don't put a limit on supply and things work out just fine.
Welcome to the boom half of a boom and bust cycle. It’s lasting longer because the amount of capital invested in subsidizing Uber/Lyft but it’s still going to turn eventually.
Roads are a public resources and have limits, otherwise you'll end up with a situation where the road is dominated exclusively by private business.
This is exactly what’s happening in cities across the world including suburban Mumbai, where I live.
Ride shares like Uber and Ola, a myriad delivery services, and privately owned rickshaws are choking the city. We’ve basically handed the city roads over to last mile logistics and ride share companies to the extent that one can’t safely drive in the city because everyone else on the road has a delivery/pickup deadline to meet.
It has gotten to point when I get calls from people I barely know asking me to teach them how to drive so that they can work for Ola/Uber/Last mile logistics.
Eventually, we’re all going to become shut ins because the alternative is to risk life and limb trying to share the road with people who are trying to play chicken with each other just to get somewhere a minute earlier.
Ride shares like Uber and Ola, a myriad delivery services, and privately owned rickshaws are choking the city. We’ve basically handed the city roads over to last mile logistics and ride share companies to the extent that one can’t safely drive in the city because everyone else on the road has a delivery/pickup deadline to meet.
It has gotten to point when I get calls from people I barely know asking me to teach them how to drive so that they can work for Ola/Uber/Last mile logistics.
Eventually, we’re all going to become shut ins because the alternative is to risk life and limb trying to share the road with people who are trying to play chicken with each other just to get somewhere a minute earlier.
It is a problem today.
Evidence suggests that the market clearing price for taxi services is below the subsistence level for the people doing it, and above a tolerable level of cars and congestion.
Your basic premise is also unsound. Markets produce failures and unstable situations constantly, and the government steps in to address what would otherwise be a market failure.
We license hairdressers and financial planners, we inspect airplanes and meat, and a million other things. In nearly every case it’s for the same reason we regulate taxis, which is that we tried not regulating it and were unhappy with the outcomes.
Evidence suggests that the market clearing price for taxi services is below the subsistence level for the people doing it, and above a tolerable level of cars and congestion.
Your basic premise is also unsound. Markets produce failures and unstable situations constantly, and the government steps in to address what would otherwise be a market failure.
We license hairdressers and financial planners, we inspect airplanes and meat, and a million other things. In nearly every case it’s for the same reason we regulate taxis, which is that we tried not regulating it and were unhappy with the outcomes.
> We license hairdressers
I'm broadly in favor of more regulation, as a way to protect consumers. However, this is absolutely not the example I'd choose. Hairdressing licenses (and a lot of similar laws) are overwhelmingly bad regulations which exists to protect a minority of incumbents.
https://www.npr.org/sections/money/2012/06/22/155596305/epis...
I'm broadly in favor of more regulation, as a way to protect consumers. However, this is absolutely not the example I'd choose. Hairdressing licenses (and a lot of similar laws) are overwhelmingly bad regulations which exists to protect a minority of incumbents.
https://www.npr.org/sections/money/2012/06/22/155596305/epis...
That's just people repeating Milton Friedman's blathering about things he knows nothing about.
You don't want licensing and regulation of hair dressers? Enjoy your Hepatitis.
You don't want licensing and regulation of hair dressers? Enjoy your Hepatitis.
There's a need to be properly trained for hair cutting, styling, coloring/dye jobs, perms, etc. These are skilled professions that apply potentially harmful chemicals to people heads, with hygiene issues involved. And the licensing requirement is really not onerous as it's nearly automatic upon passing the requisite curriculum. A 1-year program in the area typically costs between $8000 to $10000 with many students eligible for financial aid grants or subsidized loans. None of this is particularly onerous considering you can easily finish with a job paying ~$35000 a year to start and $50,000 with some experience, much more if you're really good at it and develop a loyal clientele or find a higher end salon to employ you or open your own business. There aren't state quotas on how many people can go through these programs, they aren't otherwise limited, and I'm not aware of any type of incumbency pressure exerted to increase requirements and raise the bar beyond these reasonable levels.
There are a few health code issues too. We too easily forget those days when it was possible to pick up disease when getting a haircut. That has never been much of a thing for cabs.
Your last two paragraphs are a beautifully succinct takedown of the radical libertarian politics that seems to be on the rise. I suspect that this movement is largely driven by people who hate "regulation" as a concept because they personally resent being regulated, even when said regulation is better for the greater good.
> In nearly every case it’s for the same reason we regulate taxis, which is that we tried not regulating it and were unhappy with the outcomes.
Ironically, here in Phoenix, they used to regulate taxis but now they don't since those rules were too much for Uber/Lyft to legally comply with.
They didn't regulate supply like the other cities but the cabs would have to get a sticker from Weights & Measures once a year that ensured they complied with things like proper insurance, the meter operated correctly, prices were clearly marked on the outside, &etc... Also had on the road spot checks by Weights & Measures and passengers had a phone number to call if there was some sketchiness going on with their rides.
Once the Weights & Measures started hunting the Uber/Lyft "illegal livery service vehicles" the laws changed so now there's no longer anyone ensuring the cabs uphold even a minimum standard -- though, honestly, 99.9% of the iffy cabs were squeezed out of the market since they simply can't compete with SV billionaires trying to put them out of business.
These days the cabs you see running around the Phoenix area are mostly just hauling people to/from doctors appointments through insurance company accounts.
Ironically, here in Phoenix, they used to regulate taxis but now they don't since those rules were too much for Uber/Lyft to legally comply with.
They didn't regulate supply like the other cities but the cabs would have to get a sticker from Weights & Measures once a year that ensured they complied with things like proper insurance, the meter operated correctly, prices were clearly marked on the outside, &etc... Also had on the road spot checks by Weights & Measures and passengers had a phone number to call if there was some sketchiness going on with their rides.
Once the Weights & Measures started hunting the Uber/Lyft "illegal livery service vehicles" the laws changed so now there's no longer anyone ensuring the cabs uphold even a minimum standard -- though, honestly, 99.9% of the iffy cabs were squeezed out of the market since they simply can't compete with SV billionaires trying to put them out of business.
These days the cabs you see running around the Phoenix area are mostly just hauling people to/from doctors appointments through insurance company accounts.
Does that actually have anything to do with the problem in the article though? It seems like a standard case of opportunists pulling a pump-and-dump scam to get rich at the cost of victims, and in this case the asset was taxi medallions.
You can do that kind of scam on all sorts of things. The guy in the article who took out a loan to buy 15 medallions is an obvious victim of a pump and dump scam: He did something really naive in the hopes of a big investment win. The fact that it happened to be cab medallions isn't particularly important, if it wasn't those it could have been crypto or foreign currency or penny stocks just as easily.
You can do that kind of scam on all sorts of things. The guy in the article who took out a loan to buy 15 medallions is an obvious victim of a pump and dump scam: He did something really naive in the hopes of a big investment win. The fact that it happened to be cab medallions isn't particularly important, if it wasn't those it could have been crypto or foreign currency or penny stocks just as easily.
Some of my friends drove cabs. The problem is the business like a lot of businesses doesn't naturally lend itself to people being able to make an honest living without regulation.