Chicago taxi industry sliding towards collapse(usatoday.com)
usatoday.com
Chicago taxi industry sliding towards collapse
https://www.usatoday.com/story/news/2017/06/05/chicago-cabbies-say-industry-teetering-toward-collapse/102524634/
269 comments
>Whether it's for the better or worse simply doesn't matter
Yikes- I have only a little sympathy for the taxi industry, but it is very scary that you do not believe we should be concerned with whether market forces improve society or not. I think it is extremely important to the vast majority of people that any enormous change in transportation occurs for the benefit of society - the ideology that capitalism is an end into itself is extreme and fringe, and we shouldn't be afraid to call it out as such.
Yikes- I have only a little sympathy for the taxi industry, but it is very scary that you do not believe we should be concerned with whether market forces improve society or not. I think it is extremely important to the vast majority of people that any enormous change in transportation occurs for the benefit of society - the ideology that capitalism is an end into itself is extreme and fringe, and we shouldn't be afraid to call it out as such.
I read the original post a couple of times after reading your comment, and I don't get any vibe that he doesn't think we should be concerned about the impact of market forces on social wellbeing. Unless you're implying something about the taxi industry being a social good more so than Uber or Lyft, but that seems unlikely given that you have little sympathy for the industry.
I live in Chicago, and I don't know if Lyft and Uber are a social good, but taxis were too expensive for me, and now I have another affordable option for transportation. Plus all of the drivers I've spoken to seem pretty happy with their new source of income, so it's mostly the city and medallion owners that are losing out. The city can take action to help ease medallion owners out of the industry without defaulting as the demand continues to decline, and drivers are completely qualified for the ride-share industry. As far as disruptions go, this one seems pretty agreeable (I don't have much sympathy for the bureaucrats who are stuck between raising taxes and rooting out corruption and mismanagement in order to make up the difference).
I live in Chicago, and I don't know if Lyft and Uber are a social good, but taxis were too expensive for me, and now I have another affordable option for transportation. Plus all of the drivers I've spoken to seem pretty happy with their new source of income, so it's mostly the city and medallion owners that are losing out. The city can take action to help ease medallion owners out of the industry without defaulting as the demand continues to decline, and drivers are completely qualified for the ride-share industry. As far as disruptions go, this one seems pretty agreeable (I don't have much sympathy for the bureaucrats who are stuck between raising taxes and rooting out corruption and mismanagement in order to make up the difference).
The city gets their $2/ride or whatever from Lyft/Uber, I strongly doubt they're too concerned.
The market, i.e. customers, are saying they prefer Lyft and Uber to monopoly taxis.
Market forces are naturally driven by customer demand and the realities of supply costs. Government intervention/subsidies is the only thing that interferes with that process, and almost always that intervention is being driven by self interested actors looking to reap above market profits.
You may not like what customers want, but that doesn't mean it's not better for them.
Market forces are naturally driven by customer demand and the realities of supply costs. Government intervention/subsidies is the only thing that interferes with that process, and almost always that intervention is being driven by self interested actors looking to reap above market profits.
You may not like what customers want, but that doesn't mean it's not better for them.
I don't prefer Lyft or Uber to monopoly taxis, I prefer to axe the monopoly part, which seems to have led to terrible taxi service in many places.
I don't want - Drivers that drive like maniacs. Drivers that spend the entire ride on a phone call to god knows where. Drivers who lie to me and tell me they can't accept my credit card.
However, it seems to be conflated that the alternative to that can only be people using their private cars that don't necessarily know the area they're driving in and are by no means professional drivers working in an ill-defined "non-employee"/Employer relationship with Uber.
I don't want - Drivers that drive like maniacs. Drivers that spend the entire ride on a phone call to god knows where. Drivers who lie to me and tell me they can't accept my credit card.
However, it seems to be conflated that the alternative to that can only be people using their private cars that don't necessarily know the area they're driving in and are by no means professional drivers working in an ill-defined "non-employee"/Employer relationship with Uber.
> Drivers who lie to me and tell me they can't accept my credit card.
For what it's worth, in New York, that's not your problem if they tell you at the end of the ride. By law, if a card reader is broken, they must inform you of this at the beginning. None of this "ok, I take you to ATM" business that tacks on a few more bucks onto the meter.
For what it's worth, in New York, that's not your problem if they tell you at the end of the ride. By law, if a card reader is broken, they must inform you of this at the beginning. None of this "ok, I take you to ATM" business that tacks on a few more bucks onto the meter.
We'll see what you think of the cab industry when uber raises their prices by 3 times in order to become profitable, after the cabbies all gone.
Yeah, and I bet after Borders shuts down, you'll see Amazon raise book prices sky-high!
People always claim this will happen, and it never seems to. If Uber tripled prices, a competitor would start up to cut into their market share.
People always claim this will happen, and it never seems to. If Uber tripled prices, a competitor would start up to cut into their market share.
There are plenty of examples of individual companies (or groups of companies) getting too much monopolistic (or oligopolistic) power and doing just that or similar. You could look at at the Phoebus Cartel of lightbulb manufactures [1], the Bell System monopoly [2], or in transportation the GM Streetcar conspiracy [3].
Due to Uber's network effects you could say they'd have even greater power to change prices dramatically. Let's say Uber became the dominant transportation network in a particular geography and then trebled prices. Any new competitor has to both lure riders and drivers from Uber. Riders, sure they can be lured by cheaper travel but drivers want to earn the most money. Uber could simply double how much they paid drivers. All the existing drivers (and any new drivers) would rather work for Uber and get paid more. In fact they would have a vested interest in seeing the competitor fail.
1: https://en.wikipedia.org/wiki/Phoebus_cartel
2: https://en.wikipedia.org/wiki/Bell_System#Nationwide_monopol...
3: https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...
Due to Uber's network effects you could say they'd have even greater power to change prices dramatically. Let's say Uber became the dominant transportation network in a particular geography and then trebled prices. Any new competitor has to both lure riders and drivers from Uber. Riders, sure they can be lured by cheaper travel but drivers want to earn the most money. Uber could simply double how much they paid drivers. All the existing drivers (and any new drivers) would rather work for Uber and get paid more. In fact they would have a vested interest in seeing the competitor fail.
1: https://en.wikipedia.org/wiki/Phoebus_cartel
2: https://en.wikipedia.org/wiki/Bell_System#Nationwide_monopol...
3: https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...
Phoebus couldn't last, no free market cartel can.
Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.
But in reality Uber can never become a natural monopoly, entry into their market is too easy and just gets easier over time as costs decline for systems development/operation.
What will happen if they succeed is that Uber will become a valuable brand, people will prefer it, and other competitors will be forced to compete solely on price. So far brand building is something Uber is struggling with.
Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.
But in reality Uber can never become a natural monopoly, entry into their market is too easy and just gets easier over time as costs decline for systems development/operation.
What will happen if they succeed is that Uber will become a valuable brand, people will prefer it, and other competitors will be forced to compete solely on price. So far brand building is something Uber is struggling with.
> Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.
I think it's unlikely that the current political climate will allow such problems to be solved with regulation.
I think it's unlikely that the current political climate will allow such problems to be solved with regulation.
At this exact moment? No. But if Uber was really gouging people Trump would be one of the first to try to make political capital from regulating them.
Politics is politics. I was just re-listening to Dan Carlin's podcast series on the fall of Rome. He starts with the Graccus brothers, who were populists. Rome had an elitist power structure, basically the founding families controlled the senate, with the Equestrians and Plebes below them (and slaves below that).
The Graccus brothers got themselves elected Tribunes, which were roles intended to check the power of the senate, and took those roles to push forward land and other reforms to check the power of the senate and give things to the middle class and poor (some would say to buy the mob).
To stop this, the Senate at one point recruited their own Tribune candidate, and he didn't promise to rollback the Graccus reforms, in fact he did the opposite. Instead of giving away land for cheap prices to the Plebes, he offered them free land. He offered even more bread subsidies, and instead of the state paying for a foreign colony for the plebes, he offered to pay for 12 of them. And he got elected to replace Gaius Gracchus.
All politicians are sensitive to where the wind is blowing and most try to take advantage from it.
Politics is politics. I was just re-listening to Dan Carlin's podcast series on the fall of Rome. He starts with the Graccus brothers, who were populists. Rome had an elitist power structure, basically the founding families controlled the senate, with the Equestrians and Plebes below them (and slaves below that).
The Graccus brothers got themselves elected Tribunes, which were roles intended to check the power of the senate, and took those roles to push forward land and other reforms to check the power of the senate and give things to the middle class and poor (some would say to buy the mob).
To stop this, the Senate at one point recruited their own Tribune candidate, and he didn't promise to rollback the Graccus reforms, in fact he did the opposite. Instead of giving away land for cheap prices to the Plebes, he offered them free land. He offered even more bread subsidies, and instead of the state paying for a foreign colony for the plebes, he offered to pay for 12 of them. And he got elected to replace Gaius Gracchus.
All politicians are sensitive to where the wind is blowing and most try to take advantage from it.
Don't forget cable providers.
> Yeah, and I bet after Borders shuts down, you'll see Amazon raise book prices sky-high!
There's some truth to that: whenever I bother to check I find that Amazon is no longer price-competitive with brick-and-mortar.
> If Uber tripled prices, a competitor would start up to cut into their market share.
...unless there's no actual profit at anything less than 3x the current prices. Isn't Uber running on a VC subsidy right now?
There's some truth to that: whenever I bother to check I find that Amazon is no longer price-competitive with brick-and-mortar.
> If Uber tripled prices, a competitor would start up to cut into their market share.
...unless there's no actual profit at anything less than 3x the current prices. Isn't Uber running on a VC subsidy right now?
To be fair, Uber has already been profitable in some markets.
3x the current prices would put us at roughly what taking the cab looked at before Uber cost-wise.
3x the current prices would put us at roughly what taking the cab looked at before Uber cost-wise.
VCs wont pay for rides forever.
VCs are just paying for rides until self-driving cars get to the point that drivers are no longer needed.
I'm not concerned with the price of rides increasing, I'm concerned with the unemployment our country is going to get punched in the face with. Between cab drivers and OTR (truckers), we're going to have a MUCH bigger problem on our hands than we've seen since Detroit collapsed (which was arguably less of an issue since it occurred over a longer period of time).
I'm not concerned with the price of rides increasing, I'm concerned with the unemployment our country is going to get punched in the face with. Between cab drivers and OTR (truckers), we're going to have a MUCH bigger problem on our hands than we've seen since Detroit collapsed (which was arguably less of an issue since it occurred over a longer period of time).
VCs are needed until a self-driving car can pick an elderly passenger at the airport and help them with their baggage when they get home.
Uber will run out of money long before we have self-driving cars.
Uber will run out of money long before we have self-driving cars.
There have been services to help elderly people get their bags in and out of the car at the airport for literally decades.
As for "at their home" - if you think that the cross section of elderly people who:
Can't lift their bag into a car.
Travel frequently.
Have no friends or family to help.
Have no neighbors to help.
Don't live in assisted living.
Is enough to sustain the industry, I think you're in for a rude awakening.
As for "at their home" - if you think that the cross section of elderly people who:
Can't lift their bag into a car.
Travel frequently.
Have no friends or family to help.
Have no neighbors to help.
Don't live in assisted living.
Is enough to sustain the industry, I think you're in for a rude awakening.
> VCs are needed until a self-driving car can pick an elderly passenger at the airport and help them with their baggage when they get home.
This is a very good point. Also consider that many more people need help with groceries than with luggage.
This is a very good point. Also consider that many more people need help with groceries than with luggage.
Just call the "Human Uber" service instead, which will come with a pair of hands. I doubt that's more than 5% of their market, so it justifies having a differentiated price for the extra help you get.
I can't see why they're can't be a uber human driver option or you can simply ask from a cart boy to help with groceries.
Heck, with amazon groceries and other similar services, why do they even need to go to the store?
Heck, with amazon groceries and other similar services, why do they even need to go to the store?
The people will just move back to the forests and the mountains. The rivers will be their roads, paths their sidewalks, trees their grocery stores, and grubs their food.
With Uber, Lyft, and other ride-sharing services, I would say there is more employed in the "move people from A to B" business now than ever before. The mobile apps increased the supply of drivers and captured the market demand for convenient and cheaper rides.
Self-driving would take away a big chunk of that market, but estimates vary on when that becomes a reality. With every major technology improvement, there were massive employment and social shifts. Wars and revolutions were often side effects. However, I don't think the percentage of the population engaged in the taxicab and trucking industries are enough to destabilize society. By its nature, the employees in that business are often transitory. Perhaps there will be legislation to force self-driving vehicles such as taxicabs and commercial trucks to keep a human "driver" to supervise and assist when the vehicle gets into situations outside of its programming.
Self-driving would take away a big chunk of that market, but estimates vary on when that becomes a reality. With every major technology improvement, there were massive employment and social shifts. Wars and revolutions were often side effects. However, I don't think the percentage of the population engaged in the taxicab and trucking industries are enough to destabilize society. By its nature, the employees in that business are often transitory. Perhaps there will be legislation to force self-driving vehicles such as taxicabs and commercial trucks to keep a human "driver" to supervise and assist when the vehicle gets into situations outside of its programming.
True, but in cities with medallions supply was effectively restricted which probably had an influence on prices. That probably wont happen under a rideshare system.
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I guess you have never rode Uber during "surge" times. Sometimes the pricing becomes insane.
But he isn't wrong. Uber will raise prices after subsidy stops.
I doubt Uber's US market is subsidized much, if at all. The financial analysis that's been done can't break down the cost of investment in international markets and new businesses from actual operating costs in the US ride share market.
Uber's service costs pennies per ride to provide, drivers pay them dollars per ride to participate. There is almost no chance Uber can't be profitable at current prices. The only question is whether prices need to rise to ensure a decent supply of drivers.
Uber's service costs pennies per ride to provide, drivers pay them dollars per ride to participate. There is almost no chance Uber can't be profitable at current prices. The only question is whether prices need to rise to ensure a decent supply of drivers.
Selling books and operating taxis are a very different market.
I'm pretty sure Lyft, which is just about as good as Uber for taking ordinary trips, will moderate that. Lyft isn't going anywhere; their cash reserves are large.
Also public transit, car rentals, etc.
Also public transit, car rentals, etc.
Public transit and car rentals are a poor substitute for a taxi service.
I must be weird. I travel over 100 days a year. I do a lot of walking, sometimes rent cars, take public transportation, etc. I take taxis etc. relatively rarely.
Each of those options is perfectly fine for transportation if you planned and or intended to use them, what I mean is that whenever I've used a taxi or taxi-like service, car rental and/or public transportation would not have been a valid substitute or even possible.
Car rental because you have to pick up the car and later drop it off and the costs are significantly higher than a taxi, and public transportation because it's slower, more crowded (therefore more difficult with luggage) and doesn't always go directly where you want to go.
On a city-wide scale you can't expect car rentals and public transportation to be a valid replacement for a taxi/taxi-like service.
Car rental because you have to pick up the car and later drop it off and the costs are significantly higher than a taxi, and public transportation because it's slower, more crowded (therefore more difficult with luggage) and doesn't always go directly where you want to go.
On a city-wide scale you can't expect car rentals and public transportation to be a valid replacement for a taxi/taxi-like service.
Have you been to Europe? I live in Poland and use public transportation as much as Uber - being able to afford both just as easily.
I have lived in Europe, although not Poland, but my point is not that public transportation is not useful, just that it's not always a suitable replacement for a taxi.
Taxi service and rental cars are a poor substitute for public transit.
I love that I live in one of the few cities with a train that leaves directly from the airport.
I love that I live in one of the few cities with a train that leaves directly from the airport.
Manchester, UK? Helsinki, Finland? Tokyo, Japan?
(I now wonder how many others I don't know about from personal experience!)
(I now wonder how many others I don't know about from personal experience!)
Chicago
Atlanta
and who do you think is paying for your cheap Lyft trips? Does not matter which ride sharing company you use right now. It is all VC money. Stop the whole Lyft has higher ethical moral ground BS. It is all about capitalism and supply demand.
Supposedly Lyft is on its way to profitability [1]. Twitter is still not yet profitable, but it shouldn't stop me from using the service if I find it useful.
> and who do you think is paying for your cheap Lyft trips?
Mostly my own contribution, and partially VC money.
1. http://www.cnbc.com/2017/01/12/pipsqueak-lyft-could-reach-pr...
> and who do you think is paying for your cheap Lyft trips?
Mostly my own contribution, and partially VC money.
1. http://www.cnbc.com/2017/01/12/pipsqueak-lyft-could-reach-pr...
Of course you should not stop using it if you prefer it. It was implied here that only uber rides were cheaper because of VC money. Which is not the case. Same applies for Lyft.
I live in Chicago; I rarely use Uber. Mostly Lyft. Works just as well and less embroiled in ethical faux pas.
Same applies for Lyft. The rides are cheap because of VC money. It is a good thing to have competition to keep the prices in check.
The original comment referred to price gouging due to lack of competition. VC money might subsidize the rides (or more likely find ongoing development?), but Uber and Lyft are bound to be cheaper than taxis for as long as they can remain less entangled with governments (less artificial price inflation).
The problem is that Uber loses money on every ride, so they'll have to raise their rates as soon as they stop being subsidized by VCs -- unless they have self-driving taxis by then.
How are they losing money on each ride? They are not managing fleets of cars, employees, etc. It's an app.
That is exactly the question you should be asking, thank you.
Answer is they provide great rates for passengers - see all of the anecdotal evidence here - and great pay for drivers.
It literally is "too good to be true."
It's just an app--with a $20B valuation and about as much in free cash.
Answer is they provide great rates for passengers - see all of the anecdotal evidence here - and great pay for drivers.
It literally is "too good to be true."
It's just an app--with a $20B valuation and about as much in free cash.
Or they stop investing so heavily in platform development. Without detailed knowledge of their accounts it's hard to predict what might happen when capital shrinks.
How are these guys not profitable? It is basically an app that gets paid to match riders with rides.
My guess is they are spending a lot of money expanding. Once done, they will be instantly profitable.
My guess is they are spending a lot of money expanding. Once done, they will be instantly profitable.
They subsidize their drivers to keep their prices artificially low. It helps them out-compete the folks who have to turn a profit.
At that point, I'll enter the market and only charge 2x taxi fares, and undercut Uber. I'll be a millionaire!
Then a dozen smaller companies will pop up with similar services and cheaper prices.
The genie is out of the bottle.
The genie is out of the bottle.
That's the thing - without the artificial entry barriers like medallions, if they do that then a competitor like Lyft can show up and undercut them very quickly.
As long as Lyft is around, they can't.
You're right. There are no markets in which a few dominant players capture significant profits because there are only a few dominant players who exploit barriers to entry or network effects to stay on top...
Except pharma, telecom, energy, airlines and one or two others...
Except pharma, telecom, energy, airlines and one or two others...
The barriers to entry with ride sharing are absurdly lower than anything else on that list. The network effect is pretty weak, because it doesn't cost consumers/drive more time or energy to keep multiple apps on their phone.
Other than pharma, you just mentioned 3 industries that have very low margins. They aren't making a ton of money on their monopolies.
Indeed I think he proved my point.
I am not sure who would like taxi industry to pharma?
I am not sure who would like taxi industry to pharma?
unreasonable profits should be protected by medallions. if uber does not come up with medallion system that is enforced and protected by elected officials, their rate hike will be a fart in a wind.
> I think it is extremely important to the vast majority of people that any enormous change in transportation occurs for the benefit of society
There's a lot of people who would disagree with you. They are called libertarians. What matters first and foremost is freedom - individual freedoms should not be overridden for the sake of improving society.
There's a lot of people who would disagree with you. They are called libertarians. What matters first and foremost is freedom - individual freedoms should not be overridden for the sake of improving society.
Libertarians (at least, ones that aren't the anarchist kind) don't believe in freedom. They believe in property rights, which are by definition an encumberance on freedom. (The difference between mere possession and a property right is that the latter is enforced through the government's monopoly on violence.)
This is the argument I usually get into with my more libertarian friends who think property rights and individual freedoms don't impose limits on one another. What happens when someone buys the land all around your house and prevents you from even getting to or leaving your property?
If you buy land where the only access is through another person's private property, that is your own fault. The purchaser has a responsibility to do their own due diligence.
I was thinking more the opposite; You could already own the land and then someone else buys up everything surrounding it.
Obviously, we're leaving LibertarianLand for a moment, but the law generally makes it impossible to split up a parcel of land in such a way that one of the lots will be landlocked. If that lot is going to be landlocked, they must create an easement allowing travel across the property that does have access to the road.
Similarly, easements don't go away when they change buyers. For example, if you own a landlocked property, and you have an easement with your neighbor that allows you to drive across his property on his private road to reach yours, and then the neighbor sells his property, you can still use that road - the new owner cannot say "tough luck."
Similarly, easements don't go away when they change buyers. For example, if you own a landlocked property, and you have an easement with your neighbor that allows you to drive across his property on his private road to reach yours, and then the neighbor sells his property, you can still use that road - the new owner cannot say "tough luck."
Well not just that, but also, Uber and Lyft are moving a lot of people around, cheaply, all while providing income for drivers.
All that's going on here is that cabbies made a bad investment and are losing. Sorry, but if you're tying up 90% of your wealth in a single asset, the value of which is 100% dependent on fickle regulation, and you didn't see this coming a few years ago, I don't have much sympathy. No prudent financial adviser would recommend this, and further, if you were so exposed, you should've been paying attention to what's happened in the industry over the past, I don't know, 8 years?
All that's going on here is that cabbies made a bad investment and are losing. Sorry, but if you're tying up 90% of your wealth in a single asset, the value of which is 100% dependent on fickle regulation, and you didn't see this coming a few years ago, I don't have much sympathy. No prudent financial adviser would recommend this, and further, if you were so exposed, you should've been paying attention to what's happened in the industry over the past, I don't know, 8 years?
If Uber and Lyft cause the downfall of the taxicab industry, it would probably hurt some people without access to technology or in less serviced areas. But, somehow I think taxi services would rebound if Uber or Lyft started abusing their monopolies.
How can society improve by having less freedom?
Yikes- I have only a little sympathy for the taxi industry, but it is very scary that you do not believe we should be concerned with whether market forces improve society or not.
Pretty much any actual customers of ride-sharing services such as Uber and Lyft have already answered that question adequately for themselves. No one else's opinion -- not yours, not mine, and damned sure not the taxi cartel's -- is of any importance.
That doesn't mean there aren't risks, of course, especially for those who think the cheap rides are going to last forever. If government has a legitimate role here, it will come into play when the VCs get tired of subsidizing said Uber and Lyft customers. The taxi medallion business may be dead, but it won't be buried for good until the ride-sharing industry is genuinely self-sustaining.
Pretty much any actual customers of ride-sharing services such as Uber and Lyft have already answered that question adequately for themselves. No one else's opinion -- not yours, not mine, and damned sure not the taxi cartel's -- is of any importance.
That doesn't mean there aren't risks, of course, especially for those who think the cheap rides are going to last forever. If government has a legitimate role here, it will come into play when the VCs get tired of subsidizing said Uber and Lyft customers. The taxi medallion business may be dead, but it won't be buried for good until the ride-sharing industry is genuinely self-sustaining.
I read it as a practicality. It doesn't matter in the sense that; like it or not, it happened. Factually, the change took place and the effects are real. You can make a new change through market or regulations but currently things are now different.
As much as I'd like to agree with you, calling it "fringe" might unfortunately underestimate the number of people that support.
That man took out a loan for a medallion, with the idea that he should be able to sell it once he retires. The medallion is now worthless. If Chicago cares about the cabbies, individual owners should be paid dollar for dollar the value of those medallions, even if no one else will buy them in the future.
(Does Chicago buy back the medallions, or do you have to have to sell them to someone else? Is the 300,000 the market value he paid to someone else, or is that what the city charges?)
The US government bailed out the banks in 2008, and all those people at the top got to keep their millions while so many people lost their homes (mostly due to fraud). These people watched their industry change while being locked into a sinking ship .. unable to do anything about it. These people need a bailout.
(Does Chicago buy back the medallions, or do you have to have to sell them to someone else? Is the 300,000 the market value he paid to someone else, or is that what the city charges?)
The US government bailed out the banks in 2008, and all those people at the top got to keep their millions while so many people lost their homes (mostly due to fraud). These people watched their industry change while being locked into a sinking ship .. unable to do anything about it. These people need a bailout.
> If Chicago cares about the cabbies, individual owners should be paid dollar for dollar the value of those medallions, even if no one else will buy them in the future.
These kinds of markets have some interesting dynamics - carbon credits have similar issues. Basically, the government can set the initial price (because they artificially create the entire supply) but then the market takes over. It's very difficult for the government to set the initial price correctly (i.e., close to the eventual market price)
I seriously doubt that there's an easy mechanism for cabbies to get the city to pay the pre-uber market price for their medallions. They would probably have to sue, claiming that the medallion gave them a guaranteed monopoly that the government failed to uphold. That will turn on exactly what rights the medallion is supposed to entail.
These kinds of markets have some interesting dynamics - carbon credits have similar issues. Basically, the government can set the initial price (because they artificially create the entire supply) but then the market takes over. It's very difficult for the government to set the initial price correctly (i.e., close to the eventual market price)
I seriously doubt that there's an easy mechanism for cabbies to get the city to pay the pre-uber market price for their medallions. They would probably have to sue, claiming that the medallion gave them a guaranteed monopoly that the government failed to uphold. That will turn on exactly what rights the medallion is supposed to entail.
He gambled that the cities artificial monopoly would last so he could continue to gouge consumers until retirement. In fact, he gambled the monopoly would stay strong so medallion prices would increase so he could reap a secondary monopoly profit by selling his medallions.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
> If Chicago cares about the cabbies
That's the thing though, they don't. And why would they? These cabbies made a bet that the medallion would not lose value until they sold it, and they lost that bet. How is this different from any other small-time business going bankrupt?
That's the thing though, they don't. And why would they? These cabbies made a bet that the medallion would not lose value until they sold it, and they lost that bet. How is this different from any other small-time business going bankrupt?
Sure. Next thing, the Treasury immediately stops honoring $20 bills. Hey, what chumps we were, accepting cash!
The analogy holds: A city government had a system where a good had artificial scarcity and intrinsic value from stable government policy. Then, it suddenly changed. I'm all for ride-hailing changing our public transit dynamic, but I can't fault the players of the old system too much for saying "What the hell about my retirement, my end of life?"
The analogy holds: A city government had a system where a good had artificial scarcity and intrinsic value from stable government policy. Then, it suddenly changed. I'm all for ride-hailing changing our public transit dynamic, but I can't fault the players of the old system too much for saying "What the hell about my retirement, my end of life?"
I don't think the city stopped honoring anything or changed any rules. The medallion buyers were just speculating and didn't see the future well. No different from people who buy property for retirement then there's a recession and the surrounding population declines and it becomes worthless. Investment is gambling. Everyone knows that. You're supposed to diversify. Humble wage earners don't have that problem. Drivers who rent medallions don't have that problem. Only the risk taking ones who took loans for something that might lose value do.
[deleted]
not a ton of medallian owner/taxi operators. IIRC most are owned by banks, PE firms, etc. They're definitely more of a leveraged financial product than a certificate that allows someone to operate a small business.
[deleted]
He gambled that the cities artificial monopoly would last so he could continue to gouge consumers until retirement. In fact, he gambled the monopoly would stay strong so medallion prices would increase so he could reap a secondary monopoly profit by selling his medallions.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
The fact that medallions, which originally cost far less than $300,000, shot up to that price is solely because of the money they allowed you to grift from chicagos citizens. Now you think those citizens should be punished again to pay more taxes in order to redeem the speculators medallions at their highest historical price?
My guess is that if medallions changed hands at $300K, that meant that they could be leased out to cabbies for over $30K a year. That's the monopoly profits the system created for them.
We never should have bailed out the banks without much harsher terms. But politicians were worried about financial collapse. There is no worry about that here, this is objectively good for the economy and the country.
Chicago owes a fair and equal competing market and what they've done is permit two totally different regulatory paradigms to exist at the same time: conventional taxes, and new taxies, sometimes also called ride sharing which is obviously bullshit to get around being called a taxi and regulated as a taxi.
Uber and Lyft rides are also investor subsidized, and that is likewise market distorting.
The city of Chicago, like many other cities, simply doesn't know what to do. They lacked the knowledge and/or the courage to either regulate Uber and Lyft etc just like taxis; or end the taxi monopoly and take some role with handling the total collapse of the medallion market (partial buy back perhaps).
But any of these meallion owners should investigate a hair cut negotiation with their lenders or talk to a bankruptcy attorney. There is no good reason for these people to be in debt on a useless asset. It's every bit as much their mistake to loan, as it was the lenders mistake to lend.
Uber and Lyft rides are also investor subsidized, and that is likewise market distorting.
The city of Chicago, like many other cities, simply doesn't know what to do. They lacked the knowledge and/or the courage to either regulate Uber and Lyft etc just like taxis; or end the taxi monopoly and take some role with handling the total collapse of the medallion market (partial buy back perhaps).
But any of these meallion owners should investigate a hair cut negotiation with their lenders or talk to a bankruptcy attorney. There is no good reason for these people to be in debt on a useless asset. It's every bit as much their mistake to loan, as it was the lenders mistake to lend.
Almost all cities had a category of licensing for car services that were not taxis long before uber showed up.
The only difference between uber and these other car services was the ease at finding a car.
The only difference between uber and these other car services was the ease at finding a car.
We should buy back medallions because these vultures overpaid for them and drove medallion prices into the stratosphere because of the ability to overcharge riders they gave?
Medallions owners ripped off people in Chicago long enough. They should sow what they reaped.
Medallions owners ripped off people in Chicago long enough. They should sow what they reaped.
Second thought:
The medallions give "the exclusive right to pick up passengers who hail them on the street". But that's just happening as much. But even "the elderly" are likely not going outside (in Chicago) and sticking their hand out. They're being dispatched, where you wouldn't need a medallion in the first place (right?).
The medallions give "the exclusive right to pick up passengers who hail them on the street". But that's just happening as much. But even "the elderly" are likely not going outside (in Chicago) and sticking their hand out. They're being dispatched, where you wouldn't need a medallion in the first place (right?).
> "the elderly"
They are. There are many active elderly people in Chicago.
They are. There are many active elderly people in Chicago.
[deleted]
Google [bank taxi medallion exposure] and you'll discover a few banks that are going to go under. Not a significant problem in the big picture, but it is still a problem for more than just medallion owners.
Good riddance. Taxi medallions are a market in rent-seeking, investing in it should mean you lose your shirt.
I do feel a little bit of schadenfreude at the predicament of NYCs biggest medallion speculator:
http://pix11.com/2017/06/07/nyc-taxi-king-accused-of-failing...
Now some medallion owners are trying to get gov't money to bail them out:
https://www.scribd.com/document/346690906/Letter-to-Governor...
http://pix11.com/2017/06/07/nyc-taxi-king-accused-of-failing...
Now some medallion owners are trying to get gov't money to bail them out:
https://www.scribd.com/document/346690906/Letter-to-Governor...
> I'm left wondering... so what?
Well, ~10,000 people, mostly male, are going to be left not only unemployed, but heavily indebted. That combination cannot be good for social stability. If you are a resident of Chicago, you should care. This problem won't go quietly into the night.
> The government in no way insured that medallions would be a winning business investment.
People who recently took out loans to purchase a car to work for Uber are going to be facing the exact same problem if and when they roll out their autonomous fleet. That's around 200,000 nationwide.
I care about these things because I want the society I live in to continue to be relatively peaceful. And America is certainly well equipped, there are as many guns are there are people. Situations like these are how bloody revolutions start. Everyone has fears about AI's running amok. I fear what people will do when AI's take their jobs.
Well, ~10,000 people, mostly male, are going to be left not only unemployed, but heavily indebted. That combination cannot be good for social stability. If you are a resident of Chicago, you should care. This problem won't go quietly into the night.
> The government in no way insured that medallions would be a winning business investment.
People who recently took out loans to purchase a car to work for Uber are going to be facing the exact same problem if and when they roll out their autonomous fleet. That's around 200,000 nationwide.
I care about these things because I want the society I live in to continue to be relatively peaceful. And America is certainly well equipped, there are as many guns are there are people. Situations like these are how bloody revolutions start. Everyone has fears about AI's running amok. I fear what people will do when AI's take their jobs.
This is bs. Entrepreneurs go bankrupt all the time, it's the "creative destruction" part of capitalism, risk and reward. And 10,000 people in the chicago would be a drop in the bucket.
But it's not 10,000 people. Lots of those medallions are owned by businesses, and they leased the medallions to drivers. Most drivers can switch to Uber/Lyft if they have or want to buy their own cars, or get other jobs. Driving a cab wasn't lucrative, the owners of the medallions were the ones reaping the monopoly profits.
The best part of the shattering of these monopolies was the lesson it gives others investing in government shielded businesses. Hopefully they will fear their own bankruptcies soon.
But it's not 10,000 people. Lots of those medallions are owned by businesses, and they leased the medallions to drivers. Most drivers can switch to Uber/Lyft if they have or want to buy their own cars, or get other jobs. Driving a cab wasn't lucrative, the owners of the medallions were the ones reaping the monopoly profits.
The best part of the shattering of these monopolies was the lesson it gives others investing in government shielded businesses. Hopefully they will fear their own bankruptcies soon.
Your bias is causing you to come to some faulty conclusions. I did not quote the number of medallions given out by the city (which by the way is around 7000 [0]). I specifically stated the number of people employed as taxi drivers, which as of Dec 2016, is 9500. [1]
> Most drivers can switch to Uber/Lyft if they have or want to buy their own cars, or get other jobs.
Although some of them can probably use their primary car for Uber/Lyft, many of them will have to take out a loan/increase their debt to get a car they can use for ride-hailing. Perhaps you aren't aware, but losses in sub-prime auto loans have reached their highest levels since the 2008 financial crisis. Given that taxi drivers make on avg about $35,000, it's safe to assume that many only qualify for subprime and will add to this problem. And this is happening all across the country.
To your other point, get another job: Doubtlessly some people will be able to retrain. Just as surely, a number of people will not be able to adapt. Being a driver is about as low skilled as labor gets, so there are hardly any where their previous experience can transfer. So what jobs? Retail
> Driving a cab wasn't lucrative, the owners of the medallions were the ones reaping the monopoly profits. The best part of the shattering of these monopolies was the lesson it gives others investing in government shielded businesses.
I don't really care about the superiority of dynamic startups vs government shielded monopolies and honestly I think the financialization/commodification of parts of the economy such that people make bets on things instead of contributing productive value is not a good thing. But I digress, I'm more concerned with the shattered pieces left over in the creative destruction. 9500 formerly employed people with little future job prospects. That is .2% of working adults. It's not a huge amount, but it's not a drop in the bucket, especiallly when the city is again raising taxes and these individuals are going to need government assistance.
As us in the tech industry innovate and move forward, we aren't following the patterns of the past. When software eats industries, it destroys jobs a magnitude more than it creates. Let's be clear, coal isn't coming back and neither is manufacturing (BTW, the US is still the world's 2nd largest manufacturer and the leading advanced manufacturer, a fact that goes unnoticed) I personally don't find meaning or validation in life by having a job, but many do and UBI is a stopgap at best, but we really don't have any other solution at this point. That's what scares me....and people making rhetorical, ideological rants with no regards for facts.
[0] https://en.wikipedia.org/wiki/Taxicabs_of_the_United_States#...
[1] http://www.chicagotribune.com/news/ct-chicago-taxi-driver-de...
> Most drivers can switch to Uber/Lyft if they have or want to buy their own cars, or get other jobs.
Although some of them can probably use their primary car for Uber/Lyft, many of them will have to take out a loan/increase their debt to get a car they can use for ride-hailing. Perhaps you aren't aware, but losses in sub-prime auto loans have reached their highest levels since the 2008 financial crisis. Given that taxi drivers make on avg about $35,000, it's safe to assume that many only qualify for subprime and will add to this problem. And this is happening all across the country.
To your other point, get another job: Doubtlessly some people will be able to retrain. Just as surely, a number of people will not be able to adapt. Being a driver is about as low skilled as labor gets, so there are hardly any where their previous experience can transfer. So what jobs? Retail
> Driving a cab wasn't lucrative, the owners of the medallions were the ones reaping the monopoly profits. The best part of the shattering of these monopolies was the lesson it gives others investing in government shielded businesses.
I don't really care about the superiority of dynamic startups vs government shielded monopolies and honestly I think the financialization/commodification of parts of the economy such that people make bets on things instead of contributing productive value is not a good thing. But I digress, I'm more concerned with the shattered pieces left over in the creative destruction. 9500 formerly employed people with little future job prospects. That is .2% of working adults. It's not a huge amount, but it's not a drop in the bucket, especiallly when the city is again raising taxes and these individuals are going to need government assistance.
As us in the tech industry innovate and move forward, we aren't following the patterns of the past. When software eats industries, it destroys jobs a magnitude more than it creates. Let's be clear, coal isn't coming back and neither is manufacturing (BTW, the US is still the world's 2nd largest manufacturer and the leading advanced manufacturer, a fact that goes unnoticed) I personally don't find meaning or validation in life by having a job, but many do and UBI is a stopgap at best, but we really don't have any other solution at this point. That's what scares me....and people making rhetorical, ideological rants with no regards for facts.
[0] https://en.wikipedia.org/wiki/Taxicabs_of_the_United_States#...
[1] http://www.chicagotribune.com/news/ct-chicago-taxi-driver-de...
No jobs have been destroyed. Chicago needs roughly the same number of drivers, just more are going to be driving Lyft or Uber in the future than Taxis. Taxi drivers might even do better with Lyft and Uber given they weren't getting any of the monopoly profits for driving.
Subprime is less than 20% of car loans, because it's easy to get a car loan if you have good (decent, not great) credit. Car loans are relatively safe because they are collateralized. This is why my bank is offering new and used car loans at 1.99%, and manufacturers/dealers can offer even lower rates. Even with poor credit you can get loans for less than 10%, which is fantastic by historical standards.
Even for the drivers who have terrible credit they can get still get a subprime loan and keep driving. Even at absolute worst case 20%, that's $6,000 a year, about $3/hour for a $30k car being used full time for Lift/Uber. Leasing a cab from a medallion holder for one shift a day probably cost close to $10,000 a year. In the case of the sub-prime loan you can refinance when your credit improves or pay it off over time. The Medallion lease costs were forever. And the driver likely can get higher utilization with Uber and Lyft than they ever got with their cabs, so they should be able to make more money.
Subprime is less than 20% of car loans, because it's easy to get a car loan if you have good (decent, not great) credit. Car loans are relatively safe because they are collateralized. This is why my bank is offering new and used car loans at 1.99%, and manufacturers/dealers can offer even lower rates. Even with poor credit you can get loans for less than 10%, which is fantastic by historical standards.
Even for the drivers who have terrible credit they can get still get a subprime loan and keep driving. Even at absolute worst case 20%, that's $6,000 a year, about $3/hour for a $30k car being used full time for Lift/Uber. Leasing a cab from a medallion holder for one shift a day probably cost close to $10,000 a year. In the case of the sub-prime loan you can refinance when your credit improves or pay it off over time. The Medallion lease costs were forever. And the driver likely can get higher utilization with Uber and Lyft than they ever got with their cabs, so they should be able to make more money.
But the market is already saturated with the top Uber/Lyft drivers who have maintained a rating above 4.0 stars. Do you thhink the growth in ride-hailing will be able to absorb so many people such that drivers are able to maintain the same number of fares/day? I don't have any data on this.
I take your point. However there is one case where traditional cab companies provide a benefit. When a city issues permits for the lucrative airport business to one specific cab company, it is with the understanding that there will be cars waiting for passengers around the clock, even during unprofitable times of the day.
If the cab business becomes a free-for-all, there will be no one waiting at the airport at 3:00 AM. Granted, there isn't a lot of traffic at certain times, but the public interest is best served when there are always cabs available.
If the cab business becomes a free-for-all, there will be no one waiting at the airport at 3:00 AM. Granted, there isn't a lot of traffic at certain times, but the public interest is best served when there are always cabs available.
In this example, you are asking for the cab companies to calculate an average fare which will allow them to operate at a loss during the night. The cab company is taking the risk that their assumptions about how much to charge during the day will offset their losses at night.
However, for this scenario, why does a cab company need to take on this risk? Why is the risk of not having a cab at a cheap price not borne by the person who needs it at 3AM? This seems like a problem that is sufficiently solved by the market, where cabs will charge appropriate pricing to make it worth their while, and if another company finds they can correctly price their fares so that they can offer the same pricing day and night, then customers will choose them.
However, for this scenario, why does a cab company need to take on this risk? Why is the risk of not having a cab at a cheap price not borne by the person who needs it at 3AM? This seems like a problem that is sufficiently solved by the market, where cabs will charge appropriate pricing to make it worth their while, and if another company finds they can correctly price their fares so that they can offer the same pricing day and night, then customers will choose them.
The municipal government mandates that the company who wins the bid for the airport franchise, is committed to always having a cab at the airport. The public good is served above the expediencies of corporate profit.
So the "benefit" was instead of allowing people to notify them in advance; the daytime market subsidized cars waiting mostly idle at 3am.
At least in Chicago, public transit options exist.
How did Uber get around not having to buy medallions for their drivers? What prevented someone from operating a for profit ride program even before Uber without a medallion?
Taxis are generally allowed to pick up anyone anywhere. Most cities also have a category for car services which are only allowed to pickup pre-booked rides. The licensing for these is generally a lot cheaper and not limited in anyway.
>What prevented someone from operating a for profit ride program even before Uber without a medallion?
Nothing and lots of companies do it.
>What prevented someone from operating a for profit ride program even before Uber without a medallion?
Nothing and lots of companies do it.
> What prevented someone from operating a for profit ride program even before Uber without a medallion?
Uber scaled fast while ignoring local regulations. Both parts are important. We've seen from e.g. Zenefits [1] that state regulators are powerful. Local regulators, on the other hand, are slower moving.
Previously, a disruptor might assemble a few happy customers before the regulators slammed down on them. Uber's ability and willingness to scale fast changed that. By the time the local regulators were ready to slam down, entire cities of constituents wanted and liked the service. That changed the political calculus. Uber, and consumers, won.
[1] https://venturebeat.com/2017/04/11/zenefits-fined-1-2-millio...
Uber scaled fast while ignoring local regulations. Both parts are important. We've seen from e.g. Zenefits [1] that state regulators are powerful. Local regulators, on the other hand, are slower moving.
Previously, a disruptor might assemble a few happy customers before the regulators slammed down on them. Uber's ability and willingness to scale fast changed that. By the time the local regulators were ready to slam down, entire cities of constituents wanted and liked the service. That changed the political calculus. Uber, and consumers, won.
[1] https://venturebeat.com/2017/04/11/zenefits-fined-1-2-millio...
Uber broke the taxi laws and dared regulators to stop them -- and they mostly won that dare. (Remember all that talk about disruption?)
Couldn't medallion holders then sue whomever issues them since they aren't enforcing the rules/terms under which they were originally sold?
They did and the 7th circuit ruled that the businesses were different enough that they can be regulated differently. The supreme court declined to hear the case, so that's how it was left.
It's the last two paragraphs of the article.
It's the last two paragraphs of the article.
I'd guess that they probably could.
Uber generally didn't break taxi laws since most cities only give medallion owners monopoly over unbooked pickups.
Uber generally broke car service laws by not requiring their drivers to have the local registrations.
Uber generally broke car service laws by not requiring their drivers to have the local registrations.
> Whether it's for the better or worse simply doesn't matter.
I guess it matters to those upon which the worse is imposed.
By that, I mean not only the taxi drivers. From an individual standpoint, those who get to drive for Uber are happy to get jobs, but looking at the problem at the scale of the workforce, replacing one jobless man and one well-paid man by one less paid man and a jobless man is a net loss.
I guess it matters to those upon which the worse is imposed.
By that, I mean not only the taxi drivers. From an individual standpoint, those who get to drive for Uber are happy to get jobs, but looking at the problem at the scale of the workforce, replacing one jobless man and one well-paid man by one less paid man and a jobless man is a net loss.
Anything's a net loss if you choose the scope arbitrarily. It's not just two guys losing money. It's also the customers saving money and getting better service.
If you see a taxi company as some kind of employer of last resort or an unemployment benefit without the shame, then perhaps it's a net loss, but why not just call a benefit a benefit and hand out cash to un/underemployed people. If you have to take a pound of flesh to prevent abuse, then have them break rocks or something to earn their payments.
If you see a taxi company as some kind of employer of last resort or an unemployment benefit without the shame, then perhaps it's a net loss, but why not just call a benefit a benefit and hand out cash to un/underemployed people. If you have to take a pound of flesh to prevent abuse, then have them break rocks or something to earn their payments.
Why is Veteran Chicago cabbie John Aikins not driving for Uber?
Please don't quote by indenting. It's unreadable on mobile.
I probably won't ever take a taxi again, but have some sympathy for the cab drivers who put their life savings in medallions. The city effectively promised them the exclusive right to give taxi rides, but didn't do anything about a non-medallion entity doing that same thing. They put hundreds of thousands of dollars into something meaningless.
> have some sympathy for the cab drivers who put their life savings in medallions
Nope. Nope nope nope nope nope.
They were speculators in a bubble market. It didn't matter what percentage of their life savings they used. If you feel sorry for someone who purchased a $300k taxi medallion which had an intrinsic value (the total value a medallion can be used for rental to taxi drivers over X years) which is far less, you are enabling such behavior.
You also have to remember that the more distorted the medallion market, the more the average taxi driver suffers. Taxi drivers, by and large, rent time in a taxi or own a car and rent the medallion. They haven't been able to afford their own medallions for decades, if ever.
Taxis had a "monopoly" on unplanned fares, but "black car" and limo service was competition (and, therefore a price ceiling). The more distorted that the medallion market, the more the other competing services would chip away at their business, diluting the value of the medallions. I'm glad that a product like Uber/Lyft was able to destroy the price floor of medallions.
I'm somewhat saddened that taxi drivers are losing that means of making a living, but it benefits far more people in the US to have a cheaper means of transportation. "Concentrated costs but diffuse benefits." It's similar to the way US textiles, steel, cheap manufacturing have suffered under globalization to benefit the average US consumer household, which saves for more than $2000/year after China joined the WTO.
NPR's Planet Money did at least one episode[1] on "The Taxi King", a guy who built a house of cards by leveraging the equity in some of his NYC taxi medallions to get loans for others. After Uber started to erode their monopoly, the medallion market popped and he's begging the state and federal governments for a "bail out". I could care less about this human piece of trash. Obviously, "the average" taxi medallion owner probably didn't own dozens of them, but I still can't find much sympathy for someone who invests in a bubble product created by a government-mandated monopoly that should have been disrupted decades before it was.
[1] http://www.npr.org/sections/money/2015/07/31/428157211/episo...
Nope. Nope nope nope nope nope.
They were speculators in a bubble market. It didn't matter what percentage of their life savings they used. If you feel sorry for someone who purchased a $300k taxi medallion which had an intrinsic value (the total value a medallion can be used for rental to taxi drivers over X years) which is far less, you are enabling such behavior.
You also have to remember that the more distorted the medallion market, the more the average taxi driver suffers. Taxi drivers, by and large, rent time in a taxi or own a car and rent the medallion. They haven't been able to afford their own medallions for decades, if ever.
Taxis had a "monopoly" on unplanned fares, but "black car" and limo service was competition (and, therefore a price ceiling). The more distorted that the medallion market, the more the other competing services would chip away at their business, diluting the value of the medallions. I'm glad that a product like Uber/Lyft was able to destroy the price floor of medallions.
I'm somewhat saddened that taxi drivers are losing that means of making a living, but it benefits far more people in the US to have a cheaper means of transportation. "Concentrated costs but diffuse benefits." It's similar to the way US textiles, steel, cheap manufacturing have suffered under globalization to benefit the average US consumer household, which saves for more than $2000/year after China joined the WTO.
NPR's Planet Money did at least one episode[1] on "The Taxi King", a guy who built a house of cards by leveraging the equity in some of his NYC taxi medallions to get loans for others. After Uber started to erode their monopoly, the medallion market popped and he's begging the state and federal governments for a "bail out". I could care less about this human piece of trash. Obviously, "the average" taxi medallion owner probably didn't own dozens of them, but I still can't find much sympathy for someone who invests in a bubble product created by a government-mandated monopoly that should have been disrupted decades before it was.
[1] http://www.npr.org/sections/money/2015/07/31/428157211/episo...
> If you feel sorry for someone who purchased a $300k taxi medallion which had an intrinsic value [...] which is far less, you are enabling such behavior.
Dude.
Feeling sorry for someone else makes you a human, not an enabler.
Dude.
Feeling sorry for someone else makes you a human, not an enabler.
This nearly makes me think of Al Franken's Supply Side Jesus.
Human and enabler are not mutually exclusive.
Heh, that could be said about ANY bubble. You're entirely victim blaming here. Keep in mind that many, many, many of the people who become taxi drivers are from other countries and often speak little to no english. Many do it because of a simple lack of options in their complex scenarios.
Paired with taxi companies taking advantage of people in these situations, you're completely minimizing a complex problem. You should be focusing your aggression to them, NOT the drivers.
Paired with taxi companies taking advantage of people in these situations, you're completely minimizing a complex problem. You should be focusing your aggression to them, NOT the drivers.
Few vulnerable immigrant taxi drivers are buying $300K medallions. They are renting them at high rates from rent-seekers.
Can't help but wonder, would you call startup investors "pieces of trash" in the event of a bubble popping? What if they asked the government for assistance, would they be actual pieces of trash then?
What if it was the web devs requesting assistance, due to thousands being laid off when said bubble popped - would they be actual people made of refuse then?
You don't sound the least bit saddened, quite the opposite.
What if it was the web devs requesting assistance, due to thousands being laid off when said bubble popped - would they be actual people made of refuse then?
You don't sound the least bit saddened, quite the opposite.
[deleted]
Its hard to even consider taking a taxi at this point. I was in Chicago last weekend and considered taking a taxi from the airport into the city. Taxi wanted ~$60 and Uber wanted ~$25. The same thing happened in SF a few months back. The driver wanted $90 to goto Palo Alto and I took an Uber pool for $23.
Granted I don't believe for a second that's the actual rate and I'm confident the driver was trying to take advantage of me. But with ride sharing I don't need to haggle over price and I know the algorithms are ripping me off less than the taxi driver.
Granted I don't believe for a second that's the actual rate and I'm confident the driver was trying to take advantage of me. But with ride sharing I don't need to haggle over price and I know the algorithms are ripping me off less than the taxi driver.
It's worse than just pricing.. I've had several taxis "pretend" their meter stopped working, to try to scam a cash ride.
Is that a problem for you, assuming that the price of the ride didn't change? I don't particularly want to enable crime, but if a driver wants to rip off the owner of the medallion bolted to the car he's driving, that's not particularly my problem, any more so than the Taco Bell employee slipping my cash into his pocket instead of the till.
It is a problem if you the passenger don't know if you are being ripped off and are paying a reasonable fare.
[deleted]
Flatrate rides from ORD to the loop are supposed to be $25. However, you may have to share it with someone... But you'll probably never be able to get that fare. (Look at the chart in the cab)
Unless the price spikes and one ends like that guy in Edmonton owing over $1100.
"Wanted"?
Aren't taxi fares set specifically by regulators in both places?
Aren't taxi fares set specifically by regulators in both places?
those medallions should never have been allowed to grow to such excessive values in such a highly regulated industry. if anything it exemplifies exactly why regulation can stifle innovation and competition. As with other cities deep pockets get control over the bulk of them and then lease usage which makes those leasing worse off than having the ability to compete on an even playing field in the first place.
Yes definitely agree the system was bad -- hence why I am basically a permanent Uber/Lyft customer. Doesn't mean that a fast one wasn't pulled on those who bought into it under the premise that it would be enforced.
Yes, something like this should never be sold in perpetuity. It they wanted to have a system like this they should have made them leases instead.
I agree, but that scenario rarely plays out. In reality, taxi medallions were leveraged financial products often owned by banks, hedge funds, PE firms etc. I do not feel sorry for the generally wealthy medallion investors, they made a bet and they lost.
I don't know what the percentage is but from personal experience there were a lot of South asian immigrants in chicago that drove and saved up to buy medallions.
Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it?
Had taxi company owners not used those medallions as an excuse to provide absolutely horrendous customer service, they wouldn't have ever had to worry about uber/lyft/whatever in the first place. I've never taken uber or lyft because it's cheaper, I've taken it because I get a clean, comfortable ride, with a driver who isn't a complete jerk. I've mentioned it here before, but also why I won't take uber anymore unless it's my last option - their CEO has the same attitude I saw in those taxi drivers and I'm not about to give monetary support to "that guy".
NOTHING the government did has EVER prevented cab companies from providing the same service these startups provide.
Had taxi company owners not used those medallions as an excuse to provide absolutely horrendous customer service, they wouldn't have ever had to worry about uber/lyft/whatever in the first place. I've never taken uber or lyft because it's cheaper, I've taken it because I get a clean, comfortable ride, with a driver who isn't a complete jerk. I've mentioned it here before, but also why I won't take uber anymore unless it's my last option - their CEO has the same attitude I saw in those taxi drivers and I'm not about to give monetary support to "that guy".
NOTHING the government did has EVER prevented cab companies from providing the same service these startups provide.
> Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it?
This is the wrong analogy, for trivially obvious reasons. As I'm sure you're aware, the drop in value of taxi medallions wasn't contingent on the owner being a bad driver. Put plainly, even a driver who went above and beyond to provide honest, high-quality service was affected by the drop in values. To put it yet _another_ way, the fact that many taxi drivers provided shitty service couldn't be less relevant.
Your analogy would only make sense if it was talking about an entire apt block got condemned due to multiple slumlords, including the apt owned by the guy who kept his property up to code and livable.
Neither this nor the fact that the regulatory regime was horribly flawed change the fact that many drivers got screwed through no fault of their own because gov't policy was incompetent enough to create bad policy and fail to sustain it.
Economic ownership of real estate as property is pretty bad economic policy too (cf Georgism) but that wouldn't change the fact that suddenly implementing a 100% LVT would 1) be infinitely better policy and 2) screw over an awful lot of people playing by the rules of the previous system, through no fault of their own.
This is the wrong analogy, for trivially obvious reasons. As I'm sure you're aware, the drop in value of taxi medallions wasn't contingent on the owner being a bad driver. Put plainly, even a driver who went above and beyond to provide honest, high-quality service was affected by the drop in values. To put it yet _another_ way, the fact that many taxi drivers provided shitty service couldn't be less relevant.
Your analogy would only make sense if it was talking about an entire apt block got condemned due to multiple slumlords, including the apt owned by the guy who kept his property up to code and livable.
Neither this nor the fact that the regulatory regime was horribly flawed change the fact that many drivers got screwed through no fault of their own because gov't policy was incompetent enough to create bad policy and fail to sustain it.
Economic ownership of real estate as property is pretty bad economic policy too (cf Georgism) but that wouldn't change the fact that suddenly implementing a 100% LVT would 1) be infinitely better policy and 2) screw over an awful lot of people playing by the rules of the previous system, through no fault of their own.
> Neither this nor the fact that the regulatory regime was horribly flawed change the fact that many drivers got screwed through no fault of their own because gov't policy was incompetent enough to create bad policy and fail to sustain it.
There's an important clarification here: Taxi drivers did not get screwed. It's medallion owners that got screwed. Yes, some of the drivers actually own their medallion, but many (most?) do not. Those who do not own their medallion didn't really get screwed, not more than anyone who gets laid off or has to change industries anyway. Many of them are simply driving for ridesharing companies now.
The medallion owners who got screwed do partially have themselves to blame, because they saw the outrageously inflated prices for medallions and chose to pay them anyway. It's like the mortgage crisis; at least some of the blame goes on the people who saw the absurd prices and chose to pay them anyway, and then got left holding the bag when the collapse hit.
There's an important clarification here: Taxi drivers did not get screwed. It's medallion owners that got screwed. Yes, some of the drivers actually own their medallion, but many (most?) do not. Those who do not own their medallion didn't really get screwed, not more than anyone who gets laid off or has to change industries anyway. Many of them are simply driving for ridesharing companies now.
The medallion owners who got screwed do partially have themselves to blame, because they saw the outrageously inflated prices for medallions and chose to pay them anyway. It's like the mortgage crisis; at least some of the blame goes on the people who saw the absurd prices and chose to pay them anyway, and then got left holding the bag when the collapse hit.
TL;DR: In an economy with government involvement as heavy as ours[1], it's ludicrous to claim that people should not only know the "true" value of something but know precisely when the gov't is going to decide that the market value should be allowed to revert to its "true" value.
> Taxi drivers did not get screwed. It's medallion owners that got screwed
Right, good catch, I wasn't thinking about that fact. That's not central to my point but it is a good point to clarify.
> The medallion owners who got screwed do partially have themselves to blame, because they saw the outrageously inflated prices for medallions and chose to pay them anyway.
This doesn't make a whole lot of sense to me. What is the "true" value of a taxi medallion, in a regulatory context where the government is setting the supply? If we implement [insert optimal healthcare policy] and (hypothetically), doctor salaries drop precipitously, are doctors to blame for seeing how "outrageously inflated" med school tuition was and choosing to pay it anyway? Should they have stayed out of the field entirely until healthcare policy in this country is perfectly optimal?
For the life of me, I'll never understand the lack of empathy required to see someone get screwed by unstable rules and conclude "well, it's your own damn fault: you should have been born one of the X-Men, with the ability to predict the future perfectly and realize that this particular inefficient policy regime was going to be disavowed at this exact time". Providing a stable legal framework is one of the most basic and most important jobs of a gov't, and making changes like suddenly deciding to stop enforcement of policy that the industry has been dealing with for decades is what legal scholars call "a dick move".
Here's another example which might be more directly relatable: if you buy a house in California and Prop 13 gets repealed or if you own real estate anywhere and our idiotic policy regime around real estate gets fixed: you'd suddenly lose a huge portion of your life savings, but you'd have yourself to blame because "you saw the outrageously inflated prices and chose to pay them anyway"?
Bear in mind that even if you were intellectually consistent here and agreed that those homeowners are to blame, that would be terrible advice for the literally centuries' worth of landowners/homeowners in whose lifetimes real estate policy wasn't made efficient or fair, and real estate value growth accrued to arbitrary people through rent-seeking.
[1] Not that that's a bad thing necessarily
> Taxi drivers did not get screwed. It's medallion owners that got screwed
Right, good catch, I wasn't thinking about that fact. That's not central to my point but it is a good point to clarify.
> The medallion owners who got screwed do partially have themselves to blame, because they saw the outrageously inflated prices for medallions and chose to pay them anyway.
This doesn't make a whole lot of sense to me. What is the "true" value of a taxi medallion, in a regulatory context where the government is setting the supply? If we implement [insert optimal healthcare policy] and (hypothetically), doctor salaries drop precipitously, are doctors to blame for seeing how "outrageously inflated" med school tuition was and choosing to pay it anyway? Should they have stayed out of the field entirely until healthcare policy in this country is perfectly optimal?
For the life of me, I'll never understand the lack of empathy required to see someone get screwed by unstable rules and conclude "well, it's your own damn fault: you should have been born one of the X-Men, with the ability to predict the future perfectly and realize that this particular inefficient policy regime was going to be disavowed at this exact time". Providing a stable legal framework is one of the most basic and most important jobs of a gov't, and making changes like suddenly deciding to stop enforcement of policy that the industry has been dealing with for decades is what legal scholars call "a dick move".
Here's another example which might be more directly relatable: if you buy a house in California and Prop 13 gets repealed or if you own real estate anywhere and our idiotic policy regime around real estate gets fixed: you'd suddenly lose a huge portion of your life savings, but you'd have yourself to blame because "you saw the outrageously inflated prices and chose to pay them anyway"?
Bear in mind that even if you were intellectually consistent here and agreed that those homeowners are to blame, that would be terrible advice for the literally centuries' worth of landowners/homeowners in whose lifetimes real estate policy wasn't made efficient or fair, and real estate value growth accrued to arbitrary people through rent-seeking.
[1] Not that that's a bad thing necessarily
I'll never understand the lack of empathy required to see someone get screwed by unstable rules and conclude "well, it's your own damn fault
The lack of empathy stems from the behaviour of medallion owners. They're right up there with patent trolls in their unlikeability. They purchase access to a government-granted virtual monopoly and use it to extract rent from hard-working people. They form industry associations and use their profits to lobby the issuing municipalities for rate hikes and other laws that help them squeeze the drivers for more money. They produce nothing and the capital they own has zero intrinsic value.
Frankly, I struggle to see what there is to like about them.
The lack of empathy stems from the behaviour of medallion owners. They're right up there with patent trolls in their unlikeability. They purchase access to a government-granted virtual monopoly and use it to extract rent from hard-working people. They form industry associations and use their profits to lobby the issuing municipalities for rate hikes and other laws that help them squeeze the drivers for more money. They produce nothing and the capital they own has zero intrinsic value.
Frankly, I struggle to see what there is to like about them.
I guess my code of ethics is independent of whether I "like" someone? It seems a little immature to be unable to acknowledge that someone was done wrong just because you don't like them for some reason. It's even more bizarre to assume that every investor in a taxi medallion must share the same perspective on the ethics of the industry as you do[1]. A lot of people just don't understand the details of the economic system they participate in, and deciding that that condemns them to being undeserving of sympathy is frankly more than a little disgusting. I thought my example of the role homeowners play in our economy would make this a lot clearer: I assume you wouldn't be so quick to "struggle to see what there is to like about" homeowners and decide that they deserve whatever economic injustice is wrought on them.
I can guarantee you there are plenty of things you do, from not worrying too much about the sweatshops you ultimately buy from to being complicit in the torture of millions of animals that many other people would consider unethical. Arguing that people don't deserve empathy if they aren't fully aware and fully conforming to your code of ethics isn't enlightened, it's just the same old gross "I want to be shitty to people I disagree with" under a thin veneer.
[1] FWIW, I agree with your assessment of how the industry works.
I can guarantee you there are plenty of things you do, from not worrying too much about the sweatshops you ultimately buy from to being complicit in the torture of millions of animals that many other people would consider unethical. Arguing that people don't deserve empathy if they aren't fully aware and fully conforming to your code of ethics isn't enlightened, it's just the same old gross "I want to be shitty to people I disagree with" under a thin veneer.
[1] FWIW, I agree with your assessment of how the industry works.
Nail on the head here. I'm quite a liberal/progressive person, and I have empathy for many people in rough situations, but medallion owners are so hard to empathize with. I do think of them like patent trolls.
What is the "true" value of a taxi medallion, in a regulatory context where the government is setting the supply?
You can compute the present value of the total profit you can expect to earn (average fares less expenses including the medallion) and if it's less than what the medallion costs, the medallion is overpriced.
You can compute the present value of the total profit you can expect to earn (average fares less expenses including the medallion) and if it's less than what the medallion costs, the medallion is overpriced.
> You can compute the present value of the total profit you can expect to earn
This isn't what we're talking about here. That's the equilibrium market price of the medallion, but the person I was responding to was saying that the overinflation due to supply restriction through gov't policy (i.e. medallions) was what was causing market value to diverge from "true" value. The fact that his goal is basically unreachable is sort of my point: his definition of "true" involves an ideal world in which taxis are optimally regulated.
This isn't what we're talking about here. That's the equilibrium market price of the medallion, but the person I was responding to was saying that the overinflation due to supply restriction through gov't policy (i.e. medallions) was what was causing market value to diverge from "true" value. The fact that his goal is basically unreachable is sort of my point: his definition of "true" involves an ideal world in which taxis are optimally regulated.
I don't think it was though. A medallion would make you around 50k in profit a year. Medallion's were a great investment, but the greatnest of them depended 100% on the government regulations staying relatively the same.
Really? It's that bad?
OK - prior to Uber breaking onto the scene, which cab company in Chicago: 1. Provided universally clean cabs.
2. Provided an app that allowed me to easily acquire a cab without having to jump through hoops, as well as gave me real-time info on where the cab was at.
3. Provided an easy method for me to provide feedback on my driver so that they could weed out troublesome drivers.
4. allowed me to pay them without having to go through the trouble of carrying cash.
You know, all the reasons the new services are winning. The fact medallion owners provided a shitty experience is ENTIRELY RELEVANT. There NEVER WOULD'VE BEEN A MARKET FOR UBER, if the taxi companies were holding up their end of the bargain. Beginning and end of story.
OK - prior to Uber breaking onto the scene, which cab company in Chicago: 1. Provided universally clean cabs.
2. Provided an app that allowed me to easily acquire a cab without having to jump through hoops, as well as gave me real-time info on where the cab was at.
3. Provided an easy method for me to provide feedback on my driver so that they could weed out troublesome drivers.
4. allowed me to pay them without having to go through the trouble of carrying cash.
You know, all the reasons the new services are winning. The fact medallion owners provided a shitty experience is ENTIRELY RELEVANT. There NEVER WOULD'VE BEEN A MARKET FOR UBER, if the taxi companies were holding up their end of the bargain. Beginning and end of story.
Dude, what are you talking about? I don't disagree with any of your bullet points.
I like Uber, I'm a heavy user, and I'm glad they exist. None of that changes the fact that the gov't had bad policy for twenty years and then screwed over the people who decided to operate within the policy regime. I've provided ample examples above: you can't decide that every taxi operator and medallion-holder deserves getting screwed by dishonest gov't without deciding that the same is true of every doctor and homeowner in the country. Hell, you'd be hard-pressed to find an industry _is_ run fully optimally, so you're basically throwing the entire concept of a stable regulatory environment out the window, which is just ludicrous.
I like Uber, I'm a heavy user, and I'm glad they exist. None of that changes the fact that the gov't had bad policy for twenty years and then screwed over the people who decided to operate within the policy regime. I've provided ample examples above: you can't decide that every taxi operator and medallion-holder deserves getting screwed by dishonest gov't without deciding that the same is true of every doctor and homeowner in the country. Hell, you'd be hard-pressed to find an industry _is_ run fully optimally, so you're basically throwing the entire concept of a stable regulatory environment out the window, which is just ludicrous.
True but there are good taxi drivers out there too, who bought a $300k thing that is now worth nothing. Anyway that is why I said "some sympathy", because obviously the service was lacking. But I blame that more on a government restriction on those services that (previously) didn't incentive good service, not individual taxi drivers.
Well, besides completely strip their incentive to innovate or otherwise provide more than a marginally useful service...
It's more like a bunch of people bought houses on a street and 2 really rich people bought an equal number of the rest, one maintained theirs and did their best and the 2 rich people let theirs become crack dens and devalued everything else. Additionally, the taxi industry wasn't exactly filled with educated people who knew how to build software. It's an awful system, but it is what happened, and that should be considered.
I used to live in Chicago. The city taxi service was horrible--the drivers were grumpy and sketchy. They would always try to take the expensive way around. I hated the taxi service so much that to get around the airport restrictions I would ride the train out to the first stop so I could order an Uber ride.
I lived in Chicago for most of my life until somewhat recently.
Things I observed during that time: - A driver stating, seemingly out of nowhere to my friend and I, "we should just take all of the gays out back and shoot them"
- Multiple times scheduling a morning pickup for a flight, not having it arrive, and being told by the uncaring operator the alternative was to wait so long I'd miss my flight, or gamble with trying to find a free cab during rush hour on Belmont (a losing proposition)
- Too many counts to list of the CC machine "being broken" to try to force me to pay cash, including being intimidated at one point to stop at an ATM to get cash to pay
- Having a driver show me the gun he kept under his seat for "driving through the South Side"
- The joy of not being able to ever get a cab during busy events in extreme weather of all types because there was no way to reserve the ride
- Various smells, ripped seats, miscellaneous fluids in the floor mats, leftover food/alcohol/condom, etc.
- A cab driver who picked me up at my home to go to the airport who then kicked me out part way there because I was on the phone with my mother and he refused to turn down his radio when I requested (which is in the friggin 'Passenger's Bill of Rights' posted in the back of the cab). He then loudly threatened me with physical violence once I exited the vehicle. I ended up asking the cab company to not fire him once I complained because I was so scared that he was unhinged, and the last thing I wanted was an unemployed, unhinged angry guy knowing where my wife and I lived
Good riddance. Uber has its own issues, but they have proven what the market wants. And it sure as hell isn't the current cab system Chicago has.
Things I observed during that time: - A driver stating, seemingly out of nowhere to my friend and I, "we should just take all of the gays out back and shoot them"
- Multiple times scheduling a morning pickup for a flight, not having it arrive, and being told by the uncaring operator the alternative was to wait so long I'd miss my flight, or gamble with trying to find a free cab during rush hour on Belmont (a losing proposition)
- Too many counts to list of the CC machine "being broken" to try to force me to pay cash, including being intimidated at one point to stop at an ATM to get cash to pay
- Having a driver show me the gun he kept under his seat for "driving through the South Side"
- The joy of not being able to ever get a cab during busy events in extreme weather of all types because there was no way to reserve the ride
- Various smells, ripped seats, miscellaneous fluids in the floor mats, leftover food/alcohol/condom, etc.
- A cab driver who picked me up at my home to go to the airport who then kicked me out part way there because I was on the phone with my mother and he refused to turn down his radio when I requested (which is in the friggin 'Passenger's Bill of Rights' posted in the back of the cab). He then loudly threatened me with physical violence once I exited the vehicle. I ended up asking the cab company to not fire him once I complained because I was so scared that he was unhinged, and the last thing I wanted was an unemployed, unhinged angry guy knowing where my wife and I lived
Good riddance. Uber has its own issues, but they have proven what the market wants. And it sure as hell isn't the current cab system Chicago has.
Never have I ever trusted a cab company to schedule a pickup.
I have used airport shuttle companies, and limousine/livery companies (this was before Lyft and Uber). Both were overwhelmingly cheaper than a cab, and they actually show up on time. When I lived in Chicago, I'd always use the blue line to ORD or orange line to MDW.
Whenever I actually wanted a cab in Chicago, I could never get one. I suspect that was mainly down to my looks. Not so much sketchy as unattractive, and possibly willing to counter the broken card swipe machine gambit by paying with nickels and then forgetting to leave a tip.
And of course there's just something about a vehicle that smells like it was recently dusted with finely-ground cumin that makes me want to walk.
So, no sympathy here. They can choke on those medallions.
I have used airport shuttle companies, and limousine/livery companies (this was before Lyft and Uber). Both were overwhelmingly cheaper than a cab, and they actually show up on time. When I lived in Chicago, I'd always use the blue line to ORD or orange line to MDW.
Whenever I actually wanted a cab in Chicago, I could never get one. I suspect that was mainly down to my looks. Not so much sketchy as unattractive, and possibly willing to counter the broken card swipe machine gambit by paying with nickels and then forgetting to leave a tip.
And of course there's just something about a vehicle that smells like it was recently dusted with finely-ground cumin that makes me want to walk.
So, no sympathy here. They can choke on those medallions.
> - A cab driver who picked me up at my home to go to the airport who then kicked me out part way there because I was on the phone with my mother and he refused to turn down his radio when I requested (which is in the friggin 'Passenger's Bill of Rights' posted in the back of the cab). He then loudly threatened me with physical violence once I exited the vehicle. I ended up asking the cab company to not fire him once I complained because I was so scared that he was unhinged, and the last thing I wanted was an unemployed, unhinged angry guy knowing where my wife and I lived
I wonder how that would go since CCW permits are legal now.
I wonder how that would go since CCW permits are legal now.
Are you wondering whether the cabbie would have been more polite, knowing that his passenger might be armed?
Or are you wondering whether shostack might have been shot himself?
Or are you wondering whether shostack might have been shot himself?
The Uber/Lyft systems are very robust (in the sense that I have no trouble getting drivers to take my ride requests at any time) in Chicago. That being said, I cannot imagine the drivers are making a decent living driving.
Anecdotally: as long as I don't go during rush hour (i.e. 7-9am or 4-6pm on weekdays), I can get from anywhere in the densely populated sections of Chicago (basically, anywhere within 5 miles of the loop) to another section for ~$3~5 via Uber Pool/Lyft Line. At that price point, it's competitive with taking public transit.
I'm interning in Chicago this summer and I've already taken pool/line 10 times, each for ~$3~4 and taking ~20 minutes and going about ~3 miles. Uber/Lyft's algorithms for matching riders up is actually pretty good in my experience, but even then let's assume that each driver has two riders per trip, each paying $4 and each trip taking 20 minutes. In which case, they'd have 6 riders per hour for a total revenue of $24/hour before Uber/Lyft's cut and accounting for their own expenses. I refuse to believe they can actually make a living by driving this way.
Anecdotally: as long as I don't go during rush hour (i.e. 7-9am or 4-6pm on weekdays), I can get from anywhere in the densely populated sections of Chicago (basically, anywhere within 5 miles of the loop) to another section for ~$3~5 via Uber Pool/Lyft Line. At that price point, it's competitive with taking public transit.
I'm interning in Chicago this summer and I've already taken pool/line 10 times, each for ~$3~4 and taking ~20 minutes and going about ~3 miles. Uber/Lyft's algorithms for matching riders up is actually pretty good in my experience, but even then let's assume that each driver has two riders per trip, each paying $4 and each trip taking 20 minutes. In which case, they'd have 6 riders per hour for a total revenue of $24/hour before Uber/Lyft's cut and accounting for their own expenses. I refuse to believe they can actually make a living by driving this way.
Anectodal evidence from my trip to Chicago last week. The same trip cost me twice as much when I took a taxi vs Lyft. So guess what I'm going to take the next time...
Last time I was in Chicago my hotel got me a taxi to the airport. I remember it being absurdly expensive...but on top of it that driver decided it was a good time to tell me about all of his sexual exploits and drug use in his down time.
I don't often leave negative reviews...but that ride warranted a negative review.
I don't often leave negative reviews...but that ride warranted a negative review.
At least it didn't stink of BO, the driver was aggressive in traffic, didn't stay on the phone the whole time, and/or blast the radio the whole time. It's literally he small things with cabs.
Bar time in Madison. Lyft was about $60, a cab was $20.
If you find yourself around people in their twenties all looking for rides at 3am, call a cab.
If you find yourself around people in their twenties all looking for rides at 3am, call a cab.
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This happened to me in Seattle recently. I ordered an Uber and there was a long wait, so I went to the taxi queue and got one immediately. The fare in the end was DOUBLE what the quoted Uber fare was. Before that I had assumed fares were the same and the only reason to order an Uber was the convenience of using an App. I haven't hailed a taxi since.
In a taxi your ride was insured if the driver got in an accident. Your cabbie is certified, and less likely to be crazy. Also half your lyft/uber ride is paid by a VC.
less likely to be crazy.
Having taken many cabs and many rides via Uber, Lyft, and Juno, I'm not sure why you'd claim this. The drivers for ride-sharing services are far safer, saner, and more careful than cab drivers. The reason is not hard to ascertain: at the end of almost every trip drivers and riders rate each other.
Having taken many cabs and many rides via Uber, Lyft, and Juno, I'm not sure why you'd claim this. The drivers for ride-sharing services are far safer, saner, and more careful than cab drivers. The reason is not hard to ascertain: at the end of almost every trip drivers and riders rate each other.
I think there are similar related downsides that could be said about ride-sharing too. If we are giving anecdotal experience then I will say that ride-sharing drivers in Chicago are much more likely to blow through yellow/red lights or park in a cross-walk. The reason is not hard to ascertain: I can easily call 311 on a taxi as a pedestrian with the taxi number.
Personally, I see a lot of people happy killing all of the problems with taxis (particularly in Chicago) but I fear that we are "throwing the baby out with the bathwater". Taxis in Chicago have a ton of problems, but I still have concerns about ride-sharing too.
Personally, I see a lot of people happy killing all of the problems with taxis (particularly in Chicago) but I fear that we are "throwing the baby out with the bathwater". Taxis in Chicago have a ton of problems, but I still have concerns about ride-sharing too.
Same problem in Seattle, especially with the complete disregard for lane use. Uber and Lyft drivers seem to think that "bus only" is secret code for "all TNC drivers stop here for passengers, especially at peak times."
My personal favorite is how hazard lights have morphed into "I can do whatever I want, just go around me by veering a car / this 60' bus into oncoming traffic."
One of these days I'm going to start spending one of my days off just standing at a random major intersection and emailing SDOT/SPD and posting on Twitter the license plate numbers of every Uber/Lyft driver behaving badly.
My personal favorite is how hazard lights have morphed into "I can do whatever I want, just go around me by veering a car / this 60' bus into oncoming traffic."
One of these days I'm going to start spending one of my days off just standing at a random major intersection and emailing SDOT/SPD and posting on Twitter the license plate numbers of every Uber/Lyft driver behaving badly.
This seems to match my experience.
I feel much more secure in an Uber where I can rate and report the driver versus a taxi where they can basically do whatever they want.
I keep hearing this, but I also keep hearing that Lyft and Uber drivers have to go through a background check. Why should I believe that taxi drivers are less likely to be crazy?
I think the VC money and lack of regulations is a huge issue.
What people don't realize is that once the taxi companies are dead, the ride sharing apps will be able to raise prices and lower quality. Not to mention the issues already seen with Uber and Lyft, whether at a corporate level or on a driver/passenger level.
What people don't realize is that once the taxi companies are dead, the ride sharing apps will be able to raise prices and lower quality. Not to mention the issues already seen with Uber and Lyft, whether at a corporate level or on a driver/passenger level.
> What people don't realize is that once the taxi companies are dead, the ride sharing apps will be able to raise prices and lower quality.
The rideshare companies are still in competition with each other. The market will stabilize at a price necessarily lower than taxi price, which was artificially inflated by local governments. This doesn't seem like a valid concern.
> whether at a corporate level
Sounds like you're imply that Uber's corporate problems are fundamental to rideshare. Care to elaborate on that?
> or on a driver/passenger level.
Why should I be more afraid of scary driver/passenger stuff with rideshare than with taxis? Do you have some information to suggest that rideshare is actually more dangerous? This seems like fear mongering...
The rideshare companies are still in competition with each other. The market will stabilize at a price necessarily lower than taxi price, which was artificially inflated by local governments. This doesn't seem like a valid concern.
> whether at a corporate level
Sounds like you're imply that Uber's corporate problems are fundamental to rideshare. Care to elaborate on that?
> or on a driver/passenger level.
Why should I be more afraid of scary driver/passenger stuff with rideshare than with taxis? Do you have some information to suggest that rideshare is actually more dangerous? This seems like fear mongering...
At some point the VC money will run out, so yes the subsidies will collapse. And Uber is the McDonald's or Wal-Mart of ride sharing. When you see employees complain about Wal-Mart being fundamentally unethical, you will see not a damn thing change. That's one reason to care. Not necessarily a problem fundamental to ride sharing, but the ride sharing ecosystem may be toxic, and I don't see where repercussions would be.
Having $B of investment for an idea that is only a few degrees from "yo" (exaggeration) creates a hated company like Uber. What has Travis done to deserve money like that that a college student making a location aware app with a backend and insurance/financial pool couldn't do? It looks like a black mark on the tech investment engine to me. Only difference might be he's an ahole and they've been selling some moonshot idea.
I can tell you how bad the excessive funding situation is - my bank, Chase, has sent me offers through my credit card for free rides. A gigantic financial institution is providing millions of people with free rides. That is not an advantage that either a homebrew developer or a traditional taxi company have.
In terms of fear mongering, there have obviously been complaints from drivers and passengers alike. You need to consider those as well as true stories and urban legends of cab experiences. If you haven't heard anything bad ever, then you should be skeptical.
In Chicagoland, the number one complaint I have ever heard about cab rides is the price, and that is not an equal comparison to ride sharing apps (because of incredible subsidies, no licenses, taxes, regulations or fees).
When one company or field of companies eliminates another due to fair competition that can be healthy for the market, but when eliminations happen from unfair competition, that is harmful to the market. I never said taxis were great. I just think their extinction would be bad.
qed.
Having $B of investment for an idea that is only a few degrees from "yo" (exaggeration) creates a hated company like Uber. What has Travis done to deserve money like that that a college student making a location aware app with a backend and insurance/financial pool couldn't do? It looks like a black mark on the tech investment engine to me. Only difference might be he's an ahole and they've been selling some moonshot idea.
I can tell you how bad the excessive funding situation is - my bank, Chase, has sent me offers through my credit card for free rides. A gigantic financial institution is providing millions of people with free rides. That is not an advantage that either a homebrew developer or a traditional taxi company have.
In terms of fear mongering, there have obviously been complaints from drivers and passengers alike. You need to consider those as well as true stories and urban legends of cab experiences. If you haven't heard anything bad ever, then you should be skeptical.
In Chicagoland, the number one complaint I have ever heard about cab rides is the price, and that is not an equal comparison to ride sharing apps (because of incredible subsidies, no licenses, taxes, regulations or fees).
When one company or field of companies eliminates another due to fair competition that can be healthy for the market, but when eliminations happen from unfair competition, that is harmful to the market. I never said taxis were great. I just think their extinction would be bad.
qed.
1. When the VC money runs out, timeshare will still beat taxis on price until something changes with the regulatory landscape, because a good chunk of each ride goes into meeting bad government regulations.
2. Its not meant to be an even playing field; that timeshare can outcompeted Taxis without any adverse social effect demonstrates the inefficiencies imposed on the industry by way of useless regulation.
3. I don't doubt there are bad rideshare stories. This doesn't mean ride share is somehow less safe than taxis, hence fear mongering.
5. Drivers seem to love ride share as far as I can tell, so the McDonalds/Walmart comparisons aren't apt, even if I was certain that Walmart and McDonalds are unethical companies.
3. I don't doubt there are bad rideshare stories. This doesn't mean ride share is somehow less safe than taxis, hence fear mongering.
5. Drivers seem to love ride share as far as I can tell, so the McDonalds/Walmart comparisons aren't apt, even if I was certain that Walmart and McDonalds are unethical companies.
Oh, people love Wal-Mart and McDonalds too, but they have huge negative externalities that are bad for their workers and the global food supply.
And cities are free to regulate the ride sharing operators or reduce taxi medallion and tax costs to let them come back. The government fees/licensing restrictions are the only significant barrier to entry in the industry. Fix those and Uber/Lyft have competition in days.
Funny you should say that. Austin attempted to do this but the Uber and Lyft lobbyists were able to prop up legislation at the state level. Hard to see that happening with a local taxi co.
They do regulate. Uber/Lyft flout the regulations...
Minimally in comparison to taxis - and some regulations are obeyed. A good example is the airport agreements in Chicago.
Well, Chicago is the city that works. But Uber is a bigger gang than the mob. Should that scare us?
Really, things seem less corrupt now than they did with Daley so maybe there aren't big payoffs by taxis, just laziness from them and the police.
Really, things seem less corrupt now than they did with Daley so maybe there aren't big payoffs by taxis, just laziness from them and the police.
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Not really. Fairly common for cabbies to share their cab with their twin brother who kinda looks the same, but has no insurance and no license.
The Uber/Lyft ride is ensured by the company; your driver might be screwed if they crashed on the way to pick you up, however.
You should probably read some news stories about that...
Could you hyperlink one?
The paywalled article doesn't carry any information about the circumstances of the settlement.
A point that I have yet to see in the debate: while everyone seems to like the "old cab industry" going downhill (which may very well be deserved, given shady practices like racial discrimination, detours etc.), no one seems to think about the ultimate consequence:
People without smartphones or credit cards will have no way of getting individual point-to-point transportation any more. This especially includes old people (who e.g. rely on cabs to transport them to doctors, grocery stores etc), people who do not want smartphones or cellphones in general due to privacy reasons (e.g. tracking by network operators, or not wanting everything they do on their phone fed to Google), and minors who do not have a credit card - when I was young I always had 50€ in cash with me so I could fetch a cab home when public transport failed.
Also, there are many people who do not want to use Uber, Lyft etc. for ethical or other reasons - it is unclear if the driver has proper insurance for his vehicle, it is not regulated how long the driver has been behind the wheel (it's easy to end up in a crash when driving tired, I speak from personal experience), it's not regulated how much money the drivers make (owner-operated businesses usually don't fall under minimum wage regulations) and for what it's worth it's not guaranteed that the vehicle is technically fit to be on the road (which cabs usually are, with yearly inspections by independent auditors in Germany, for example).
People without smartphones or credit cards will have no way of getting individual point-to-point transportation any more. This especially includes old people (who e.g. rely on cabs to transport them to doctors, grocery stores etc), people who do not want smartphones or cellphones in general due to privacy reasons (e.g. tracking by network operators, or not wanting everything they do on their phone fed to Google), and minors who do not have a credit card - when I was young I always had 50€ in cash with me so I could fetch a cab home when public transport failed.
Also, there are many people who do not want to use Uber, Lyft etc. for ethical or other reasons - it is unclear if the driver has proper insurance for his vehicle, it is not regulated how long the driver has been behind the wheel (it's easy to end up in a crash when driving tired, I speak from personal experience), it's not regulated how much money the drivers make (owner-operated businesses usually don't fall under minimum wage regulations) and for what it's worth it's not guaranteed that the vehicle is technically fit to be on the road (which cabs usually are, with yearly inspections by independent auditors in Germany, for example).
As much as I think the taxi system needed replaced, I'm not sure how I feel about companies breaking laws to innovate.
If we go down that path are the south american drug cartels just ahead of their time.
If we go down that path are the south american drug cartels just ahead of their time.
It really depends on the law. "You need to pay $300k for the right to get paid to drive people from point A to B" is a really terrible law.
The law was more like, "You must have a medallion to operate a cab. We only issued 10k medallions (or whatever). The medallions are transferable. We're not issuing new ones."
Combined with the supply of cab labor, that had the effect of, "if you want to operate a cab, you need to buy one from an owner at the current absurd market price".
Combined with the supply of cab labor, that had the effect of, "if you want to operate a cab, you need to buy one from an owner at the current absurd market price".
Which worked as long as the prices were going up.
Isn't it ironic that taxi drivers having gone in debt to buy a medallion are now financially destroyed by a company spending more than it takes in? Medallion asset bubble destroyed by Uber valuation bubble.
Isn't it ironic that taxi drivers having gone in debt to buy a medallion are now financially destroyed by a company spending more than it takes in? Medallion asset bubble destroyed by Uber valuation bubble.
laws that are obvious bullshit need to be broken
Requiring background checks on people driving taxis (yes, ubers are taxis. You're not ride sharing, they weren't just going that way and gave you a ride) is a bullshit law that needs to be broken?
Having predictable pricing so you don't end up paying 5x more when there is a major event on (aka price gouging) is a bullshit law that needs to be broken?
Having predictable pricing so you don't end up paying 5x more when there is a major event on (aka price gouging) is a bullshit law that needs to be broken?
if taxi protectionism led to better drivers, id agree.
but it does not. taxi drivers are mega sketchy, to the point where id be very worried if my gf or future children had to deal with them.
beyond their sketchyness, they act entitled to a point that is just not respectable.
apparently, you think their pricing is regulated, which its not. whats regulated is their pay per time. to jack prices up, they take bullshit routes, which not only wastes my money but my time on top of that.
if surge pricing guarantees that i will get a ride (at a higher price) then im all about that. sure, it incites peasant rage when other people have to not compete for rides becuase theyre priced out of it. big deal.
uber and travis may be a shitstack, but theyre a shitstack thats vastly less shitstack-y than the taxi industry.
edit: this is actually about background checks? well then, how many uber drivers have rape-murdered passenger so far? how many taxi drivers did?
the price gouging bit is entirely retarded. surge pricing happens to control the demand. when i need a ride and cant get one because the comic con happens and a million teenage weebs need a ride, i like having the option of getting one guaranteed - at a higher rate.
but it does not. taxi drivers are mega sketchy, to the point where id be very worried if my gf or future children had to deal with them.
beyond their sketchyness, they act entitled to a point that is just not respectable.
apparently, you think their pricing is regulated, which its not. whats regulated is their pay per time. to jack prices up, they take bullshit routes, which not only wastes my money but my time on top of that.
if surge pricing guarantees that i will get a ride (at a higher price) then im all about that. sure, it incites peasant rage when other people have to not compete for rides becuase theyre priced out of it. big deal.
uber and travis may be a shitstack, but theyre a shitstack thats vastly less shitstack-y than the taxi industry.
edit: this is actually about background checks? well then, how many uber drivers have rape-murdered passenger so far? how many taxi drivers did?
the price gouging bit is entirely retarded. surge pricing happens to control the demand. when i need a ride and cant get one because the comic con happens and a million teenage weebs need a ride, i like having the option of getting one guaranteed - at a higher rate.
So yet again, America tries its own specific brand of something, yet again with minimal meaningful regulation, watch it turn to shit when the "market" acts on profit goals alone, and then claim it's a terrible idea that can never work.
This brings us to: health care, banking, mobile phone networks, electoral systems, and now taxis.
Meanwhile the civilised world has regulated taxi systems that work, where you know what you'll pay, regardless of what's going on, and you don't have a company with a penchant for being shit lords knowing every trip you make, and doing shit like charging you more because your phone battery is low.
> surge pricing happens to control the demand.
Are you delusional? Increased wait times would be sufficient for that, and would make sense: yes we can take you but there is a queue. Those who don't want to wait will find alternatives, and the demand reduces.
> when i need a ride and cant get one because the comic con happens and a million teenage weebs need a ride, i like having the option of getting one guaranteed - at a higher rate.
But it isn't just "an option" it's the only option.
Edit: clarified
This brings us to: health care, banking, mobile phone networks, electoral systems, and now taxis.
Meanwhile the civilised world has regulated taxi systems that work, where you know what you'll pay, regardless of what's going on, and you don't have a company with a penchant for being shit lords knowing every trip you make, and doing shit like charging you more because your phone battery is low.
> surge pricing happens to control the demand.
Are you delusional? Increased wait times would be sufficient for that, and would make sense: yes we can take you but there is a queue. Those who don't want to wait will find alternatives, and the demand reduces.
> when i need a ride and cant get one because the comic con happens and a million teenage weebs need a ride, i like having the option of getting one guaranteed - at a higher rate.
But it isn't just "an option" it's the only option.
Edit: clarified
> Meanwhile the civilised world has regulated taxi systems that work
There isn't a one-size-fits-all solution. In London, or example, the best taxi drivers are going to be better than the best Uber or Lyft drivers. It's a difficult city to navigate. When I'm there, I'm not even going to consider using Lyft.
Most American cities are much easier to get around in and there I think the lower barriers to entry make sense. When ride hailing services came to Sarasota, Florida, the taxi companies complained and the city did something interesting. Rather than try to regulate the new companies, they dropped regulations on the old companies with the idea that if they find regulations are needed, they will bring them back. It's several years into this experiment and so far it's working well. I think more cities should try a similar experiment.
Mostly, I think the market does pretty well in the hire-a-ride business.
I was in Las Vegas all week and we used both Lyft and taxi cabs. The Lyft rides were the clear winner in every respect. The Lyft cars were newer and cleaner and the drivers were friendly and offered us water and other things. The taxis were older, more run down, and the drivers were aggressive and not very friendly.
In London, professional drivers win on their efficiency and expertise.
There isn't a one-size-fits-all solution. In London, or example, the best taxi drivers are going to be better than the best Uber or Lyft drivers. It's a difficult city to navigate. When I'm there, I'm not even going to consider using Lyft.
Most American cities are much easier to get around in and there I think the lower barriers to entry make sense. When ride hailing services came to Sarasota, Florida, the taxi companies complained and the city did something interesting. Rather than try to regulate the new companies, they dropped regulations on the old companies with the idea that if they find regulations are needed, they will bring them back. It's several years into this experiment and so far it's working well. I think more cities should try a similar experiment.
Mostly, I think the market does pretty well in the hire-a-ride business.
I was in Las Vegas all week and we used both Lyft and taxi cabs. The Lyft rides were the clear winner in every respect. The Lyft cars were newer and cleaner and the drivers were friendly and offered us water and other things. The taxis were older, more run down, and the drivers were aggressive and not very friendly.
In London, professional drivers win on their efficiency and expertise.
> Are you delusional?
you are delusional. i want a ride. when i want a ride, i want a ride. what i dont want is to sit in a queue. uber provides that service by pricing people who are less well off out of taking a ride that they can give to me, while making more money off of me that they would make off of a queue.
they prioritize the customer that spends more money with them, over the one who would spend less money with them. our business objectives are aligned.
sure, a queue would be more fair. the idiot over there pressed the button first so he gets served first. because thats fair.
FAIR. FAIRER THAN FAIR.
go read some more marx.
and dont compare taxis to healthcare. different issues.
btw, i was talking about the german taxi market. which is scary as fuck. dont want any of my loved ones ride one of those taxis.
> But it isn't just "an option" it's the only option.
Its not the only option. There are taxis. Cant afford uber, get a fucking taxi. I dont care. Get into a queue. Huddle under the taxi stand while the rain pours down on you waiting for a taxi. Meanwhile I surge price home.
Youre only pissy because peasants get priced out of a service that is scarce. go read some more marx.
you are delusional. i want a ride. when i want a ride, i want a ride. what i dont want is to sit in a queue. uber provides that service by pricing people who are less well off out of taking a ride that they can give to me, while making more money off of me that they would make off of a queue.
they prioritize the customer that spends more money with them, over the one who would spend less money with them. our business objectives are aligned.
sure, a queue would be more fair. the idiot over there pressed the button first so he gets served first. because thats fair.
FAIR. FAIRER THAN FAIR.
go read some more marx.
and dont compare taxis to healthcare. different issues.
btw, i was talking about the german taxi market. which is scary as fuck. dont want any of my loved ones ride one of those taxis.
> But it isn't just "an option" it's the only option.
Its not the only option. There are taxis. Cant afford uber, get a fucking taxi. I dont care. Get into a queue. Huddle under the taxi stand while the rain pours down on you waiting for a taxi. Meanwhile I surge price home.
Youre only pissy because peasants get priced out of a service that is scarce. go read some more marx.
Not sure why they don't offer an express option. There's alot of people that will say fuck it and shut the app down and figure out an alternative or get pissed and never rely on uber again. offering a low priced queue would keep them.
they could offer a VIP button that's 10x as much for the same service too for people like you that like to flaunt your wealth.
they could offer a VIP button that's 10x as much for the same service too for people like you that like to flaunt your wealth.
Is Lyft breaking the law? They operate in Chicago, so in theory would be a viable alternative to Uber.
They did when they launched, they would do airport pickups despite a law against that.
Good, it's about time we let some crappy things die.
Bailing out the banks and GM got me furious many years ago. Imagine if the government stepped in and saved Altavisa / Pets.com, and all the other dot-com boom companies? What good would that have done? Nothing. Let 'em burn and innovation will rise from the ashes.
Bailing out the banks and GM got me furious many years ago. Imagine if the government stepped in and saved Altavisa / Pets.com, and all the other dot-com boom companies? What good would that have done? Nothing. Let 'em burn and innovation will rise from the ashes.
I've never been furious about Taxis before I heard of the medallion system in Chicago and New York.. Sounds like something the mob would cook up together with crooked politicians as an alternative source of revenue.
> ...something the mob would cook up together with crooked politicians...
It's Chicago. The crooked politicians are their own mob. Vice crime may be contracted out to the local gangs, but the rackets are kept strictly in-house.
That way, when you want to buy a senate seat, there's no pesky middleman in the way to jack up prices. You can just go straight to the governor and hand him an envelope of cash under the table.
It's Chicago. The crooked politicians are their own mob. Vice crime may be contracted out to the local gangs, but the rackets are kept strictly in-house.
That way, when you want to buy a senate seat, there's no pesky middleman in the way to jack up prices. You can just go straight to the governor and hand him an envelope of cash under the table.
+ 10000, the taxi system in chicago was _SO_BAD_
Can remember one case where I got a 5am ride to the airport. I suspect the guy was driving a friends cab, as his face did not match the registration. He blew through all stop signs we came across. There were no working seatbelts in the cab. I was literally afraid for my life.
Oh and of course his credit card machine was broke, and he had no change, so I have to pay with 20s and get no change back.
Can remember one case where I got a 5am ride to the airport. I suspect the guy was driving a friends cab, as his face did not match the registration. He blew through all stop signs we came across. There were no working seatbelts in the cab. I was literally afraid for my life.
Oh and of course his credit card machine was broke, and he had no change, so I have to pay with 20s and get no change back.
I don't know how long ago this was, but cabs in Chicago are required to accept cards, and if they can't, you're not required to pay. I've had cab drivers claim they can't accept cards (response: "ok bye"), but never had them claim not to be able to make change.
In both NYC and Chicago, you can call the cops over this, and they're very responsive (perhaps more so in NYC).
In both NYC and Chicago, you can call the cops over this, and they're very responsive (perhaps more so in NYC).
In that situation, shouldn't you underpay but leave your name and address, suggesting he take it up with the council/police? Do local/federal laws permit that?
I know what it's like though: I arrived late in to Spain once, I got ripped off as it should have been a fixed fare (I had lived in the city!), but it was late and night and was too tired to argue in Spanish.
I know what it's like though: I arrived late in to Spain once, I got ripped off as it should have been a fixed fare (I had lived in the city!), but it was late and night and was too tired to argue in Spanish.
Yes in hindsight. But it was 5am and I was going on my honeymoon. Grandstanding to a can driver was low on my agenda...
"Let'em burn" with respect to "the banks" has been researched and cited as exacerbating the great depression[1].
I know there are folks legitimately concerned with moral hazard, and genuinely believe letting it all burn down would have been the better approach. I'm just glad they weren't in charge when everything went into a tail spin. I think it would have been a LOT worse for everyone.
The Automaker bailout, in hindsight, seems like it was the better call than letting them fail. If they had failed, the surviving ones would have acquired all the valuable scrap on a fire-sale, expanded to fill the void and you'd probably have more or less the same auto industry today. But in the interim, a lot of people would have lost their jobs. So that's a LOT worse for some, and I honestly can't tell who wins but on aggregate I assume it's a wash.
1 - https://www.federalreservehistory.org/essays/great_depressio...
I know there are folks legitimately concerned with moral hazard, and genuinely believe letting it all burn down would have been the better approach. I'm just glad they weren't in charge when everything went into a tail spin. I think it would have been a LOT worse for everyone.
The Automaker bailout, in hindsight, seems like it was the better call than letting them fail. If they had failed, the surviving ones would have acquired all the valuable scrap on a fire-sale, expanded to fill the void and you'd probably have more or less the same auto industry today. But in the interim, a lot of people would have lost their jobs. So that's a LOT worse for some, and I honestly can't tell who wins but on aggregate I assume it's a wash.
1 - https://www.federalreservehistory.org/essays/great_depressio...
Except the great depression happened without FDIC insurance. It wouldn't be pretty, but nobody would have been destitute from a banking collapse. There are many more regulations put in place since the 30s to safeguard against the extraordinary degree of damage a collapse can have like that.
Instead of a trillion dollar bailout that went to rich coffers (and most of which was paid back) we could have just thrown the money, mixed, into VC to replace the dead banks (as investment stake, that the government could have sold back later and recouped the costs all the same) and unemployment protection to keep the people temporarily put out of work during the restructuring from destitution.
In that scenario, the robber baron crooks that should have been in prison don't get to waft off on golden parachutes paid with tax money.
Instead of a trillion dollar bailout that went to rich coffers (and most of which was paid back) we could have just thrown the money, mixed, into VC to replace the dead banks (as investment stake, that the government could have sold back later and recouped the costs all the same) and unemployment protection to keep the people temporarily put out of work during the restructuring from destitution.
In that scenario, the robber baron crooks that should have been in prison don't get to waft off on golden parachutes paid with tax money.
I think there is a legitimate question about how long the status quo can keep being propped up though.
It is interesting how angry people get about the bank bailouts though, as if it was narrowly targeted at the owners of the banks and not targeted at preserving the entire economy.
It is interesting how angry people get about the bank bailouts though, as if it was narrowly targeted at the owners of the banks and not targeted at preserving the entire economy.
That was due to run on the banks before FDIC.
So, yes, there was no reason to be saddled with moral hazard instead of orderly dismantling. Look at Lehman, Wamu etc.
I do feel a bit for those individuals that bought a taxi medallion recently and are unlikely to be able to pay it off due to the change in dynamics; on the other hand, the only reason the price of the medallions were so high was that the market dynamics were being manipulated (by controlling the supply). The risk that those market dynamics could change should have been included in the price of the medallion - if someone did not properly consider whether that risk was appropriately priced when purchasing a medallion, that is their fault. The only real costs they talk about that are different for a taxi versus uber aren't significant (1,176 taxi fee and 1,000 every two years for the medallion renewal) and do provide them a competitive advantage (being able to pick up rides hailed on the street.
It appears the basic reason for a taxi medallion system is to regulate the industry and control supply to prevent a flood of random drivers being unleashed on an unsuspecting populous.
Uber/Lyft business model: Unleash a flood of random drivers on an unsuspecting populous.
Not that I agree with the taxi medallion system as it's ultimately been used to grant political favors and prop up unnatural monopolies but it is interesting how the negative consequences supporting the argument for why the taxi industry should be regulated are actually the competitive advantages of the ride hailing companies. . . well, that and unfettered access to VC subsidized fares, but who's counting?
Uber/Lyft business model: Unleash a flood of random drivers on an unsuspecting populous.
Not that I agree with the taxi medallion system as it's ultimately been used to grant political favors and prop up unnatural monopolies but it is interesting how the negative consequences supporting the argument for why the taxi industry should be regulated are actually the competitive advantages of the ride hailing companies. . . well, that and unfettered access to VC subsidized fares, but who's counting?
> VC subsidized fares
Although the conveniences granted by rideshare apps are a big deal, I think this is a huge component. At this point, in a busy(er) city, ridesharing is still very competitive, and prices are subsidized-low.
Living in Austin, right before the city vote to require fingerprinting drivers, which Uber was heavily lobbying against, I could get an uberpool basically anywhere within the city for between $1 and $3.
I'm just hoping that once companies start to raise prices more VCs come swooping in, kind of like still happens with growing websites. As a consumer, the cost of switching is very low.
Although the conveniences granted by rideshare apps are a big deal, I think this is a huge component. At this point, in a busy(er) city, ridesharing is still very competitive, and prices are subsidized-low.
Living in Austin, right before the city vote to require fingerprinting drivers, which Uber was heavily lobbying against, I could get an uberpool basically anywhere within the city for between $1 and $3.
I'm just hoping that once companies start to raise prices more VCs come swooping in, kind of like still happens with growing websites. As a consumer, the cost of switching is very low.
> Unleash a flood of random drivers on an unsuspecting populous.
Not sure if it's a "flood", but the volume of drivers is self-adjusting for the demand. As to the quality of drivers, I have no reason to believe Uber/Lyft drivers are worse than taxis. Chicago taxis drive like lunatics, but this hasn't been so much my experience with Uber/Lyft drivers, who seem to be a cross-section of Chicago drivers. And I don't know that the populace has been meaningfully "unsuspecting".
So all in all, this seems like a net positive--one less thing for the government to spend money regulating in the long run and a better system for everyone else (probably the former caused the latter, but anyway...).
Not sure if it's a "flood", but the volume of drivers is self-adjusting for the demand. As to the quality of drivers, I have no reason to believe Uber/Lyft drivers are worse than taxis. Chicago taxis drive like lunatics, but this hasn't been so much my experience with Uber/Lyft drivers, who seem to be a cross-section of Chicago drivers. And I don't know that the populace has been meaningfully "unsuspecting".
So all in all, this seems like a net positive--one less thing for the government to spend money regulating in the long run and a better system for everyone else (probably the former caused the latter, but anyway...).
It appears the basic reason for a taxi medallion system is to regulate the industry and control supply to prevent a flood of random drivers being unleashed on an unsuspecting populous.
I'm fine with regulations to enforce safety. I'm not fine with the "control supply" aspect. Medallions shouldn't be rationed any more than driver's licenses in general; just require people to pass standard tests and documentation requirements to get a medallion. It's unfortunate that medallion systems seem to fuse a justification that clearly serves the public interest with one that serves the public to a much lesser degree, or even not at all.
I'm fine with regulations to enforce safety. I'm not fine with the "control supply" aspect. Medallions shouldn't be rationed any more than driver's licenses in general; just require people to pass standard tests and documentation requirements to get a medallion. It's unfortunate that medallion systems seem to fuse a justification that clearly serves the public interest with one that serves the public to a much lesser degree, or even not at all.
I highly recommend people read this 2011 reuters article: http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-me...
Given the regulations, Medallions would make you 50k profit a year.
You could suspect a bubble, but the math holds up. Though that profit calculation is dependent on the fare regulations and limits on medallions.
Given the regulations, Medallions would make you 50k profit a year.
You could suspect a bubble, but the math holds up. Though that profit calculation is dependent on the fare regulations and limits on medallions.
So awesome that the Monopoly Medallion holders are filing for bankruptcy.
I have heard this from several taxi drivers. As a passenger cabs have all but disappeared from the streets compared to a few years ago
All Chicago taxicab drivers are driving Uber, Lyft and anything else running on the smart phones. The people who invested and saved through government backed medallion business, are loosing.
Don't fool yourself in thinking that the stranger you're sitting in Uber with, could potentially be your co-worker. He's your former cab driver.
Don't fool yourself in thinking that the stranger you're sitting in Uber with, could potentially be your co-worker. He's your former cab driver.
The difference is that when my former cab driver sits to drive an Uber/Lyft he knows he will be rated at the end and he also knows he can't rip me off in the fare or refuse to pass a receipt in the end.
Most of all, is the accountability I care for. The accountability that he didn't had to care about as a taxi driver but that cares very much when he drives an Uber.
Most of all, is the accountability I care for. The accountability that he didn't had to care about as a taxi driver but that cares very much when he drives an Uber.
Even better, he's my former cab driver who cares about his customer service rating staying high!
I still don't understand why taxis need a medallion from the city to operate, but Uber and Lyft drivers don't. The quote from Judge Posner at the end of the article is totally inane, and has to be out of context.
according to the article the medallion allows you to roam the street and look for someone to hail you. Uber and Lyft were ruled by the court to be more like arranged rides (limo service). It likely makes sense if you consider the original purpose of the medallion. I think (need to check again) that it was not to create monopolies but to reduce the danger that ramped up in the early days with unlimited numbers of cabs roaming the streets, zooming and cutting each other off to get a fare. If you call for a ride that public safety concern is gone
If you read the article, most medallions are owned by individuals, were it seems at most 1 person owns 4 medallions. And the cabbies were able to make a living wage. In this specific case we have 2 national companies paying just above minimum wages taking over the industry in Chicago, probably incentiveing local pols not to change regulations. So once again the little guy gets crushed.
I'm a big fan of ride sharing and I share your frustration with taxis, but I do think they have a point here.
The judge says: "Were the old deemed to have a constitutional right to preclude the entry of the new into the markets of the old..."
If you're willing to admit that it's the same market, the taxes and fees from the city should be lifted. It's absolutely unfair otherwise.
The judge says: "Were the old deemed to have a constitutional right to preclude the entry of the new into the markets of the old..."
If you're willing to admit that it's the same market, the taxes and fees from the city should be lifted. It's absolutely unfair otherwise.
How are they making so much less money than Uber? Simply by paying drivers more?
Because if they don't have things like booking, pre-paying via apps etc then of course they are losing business - but in that case why don't they?
I don't use Uber over taxis simply because I can get the exact same service from a taxi, but the drivers are better off in terms of pay and schedule (as far as I know).
Because if they don't have things like booking, pre-paying via apps etc then of course they are losing business - but in that case why don't they?
I don't use Uber over taxis simply because I can get the exact same service from a taxi, but the drivers are better off in terms of pay and schedule (as far as I know).
I don't use Uber over taxis simply because I can get the exact same service from a taxi
Just off the top of my head:
* 3-4 clicks and I have an Uber on its way vs. Having to talk to a dispatcher. Time saved.
* I know ahead of time how much the fair will be vs. at the end of the ride.
* I simply get out of the car once I reach my destination. I don't have to deal with paying, calculating tip, etc...
* Uber cars tend to be newer and in much better condition.
Now, I am not advocating for Uber, but lets not kid ourselves that the two experiences are even comparable from the customer's point of view.
I'm talking about where I get a cab where there is app dispatch+ (pre) payment. And no medallions.
Obviously taxi companies that still operate like it's 1990 are going to go extinct - my question was why are they operating like it's 1990?
Obviously taxi companies that still operate like it's 1990 are going to go extinct - my question was why are they operating like it's 1990?
As a monopoly, you usually have no reason to change. You make piles of money with no extra work, why innovate?
Uber/Lyft is eating their lunch. Now they need to innovate or die. Very likely they die at this point.
Uber/Lyft is eating their lunch. Now they need to innovate or die. Very likely they die at this point.
> As a monopoly, you usually have no reason to change.
But they don't have a monopoly and haven't for several years. I mean changing from phone dispatch to apps has to be done in 6-12 months not 6-12 years otherwise yes they will go under.
So what you are saying is that they are too slow to change? What's the reason for that? Is it that the taxi operators are small businesses and they are a too diverse group to be willing to take large risks/investmentst together such as for improving their common dispatch? In that case - the system is almost a perfect storm.
So would you agree that at challenges to traditional taxi in medallion-cities include:
- Small taxi companies (single car to maybe 100 cars) rather than large operators (1000 cars or more) that would have the money to evolve when needed
- Expensive medallions causing overhead compared to Uber/Lyft
- Long history of monopoly causing an unfamiliarity with rapid changes
- (Possibly) regulative hurdles to overcome before you could e.g. pre-charge for a ride or dispatch with an app rather than phone?
But they don't have a monopoly and haven't for several years. I mean changing from phone dispatch to apps has to be done in 6-12 months not 6-12 years otherwise yes they will go under.
So what you are saying is that they are too slow to change? What's the reason for that? Is it that the taxi operators are small businesses and they are a too diverse group to be willing to take large risks/investmentst together such as for improving their common dispatch? In that case - the system is almost a perfect storm.
So would you agree that at challenges to traditional taxi in medallion-cities include:
- Small taxi companies (single car to maybe 100 cars) rather than large operators (1000 cars or more) that would have the money to evolve when needed
- Expensive medallions causing overhead compared to Uber/Lyft
- Long history of monopoly causing an unfamiliarity with rapid changes
- (Possibly) regulative hurdles to overcome before you could e.g. pre-charge for a ride or dispatch with an app rather than phone?
> I mean changing from phone dispatch to apps has to be done in 6-12 months not 6-12 years otherwise yes they will go under.
I think you underestimate the amount of work involved in building a rideshare platform. How are taxi companies going to consolidate and find app developers to build a platform to compete with Lyft and Uber in a tiny fraction of the time, not to mention getting the word out about their platform, when Uber and Lyft are already so good (and cheap). This is to say nothing about disparities in investment and regulation.
I think you underestimate the amount of work involved in building a rideshare platform. How are taxi companies going to consolidate and find app developers to build a platform to compete with Lyft and Uber in a tiny fraction of the time, not to mention getting the word out about their platform, when Uber and Lyft are already so good (and cheap). This is to say nothing about disparities in investment and regulation.
I mostly have experience of taxi apps from where I live (Stockholm) and basically when one operator had an app, then suddenly all the major companies had apps.
The difference is obviously that there are numerous taxi companies (There used to be one monopoly but at that time there were no smartphones) and the big ones are pretty big, like a 1000+ cars each.
The apps obviously look almost the same and it wouldn't surprise me if they came from the same developer in many cases. Here are four of the largest for comparison:
https://itunes.apple.com/se/app/sverigetaxi/id504540989?mt=8
https://itunes.apple.com/se/app/taxi-sthlm/id375988670?l=en&...
https://itunes.apple.com/se/app/taxi-020/id503115316?l=en&mt...
https://itunes.apple.com/se/app/taxi-kurir/id503098740?l=en&...
You can see the last 3 just use a skinned standard taxi dispatch app! I appreciate the effort of creating the platform from scratch, but a taxi company shouldn't have to do that. They just license the app.
These taxi companies each had dispatches with many dozens of operators, so they save a good amount of money on using an app and cutting back on people) No difference from other commerce.
The main difference between Stockholm and Chicago is of course that the "taxi companies" are the large city or nationwide companies battling for market share. A taxi driver or group of drivers can also be a "company" but they just operate under the umbrella of the larger brand - who handles all dispatch, branding etc just like a city wide monopoly usually does.
So while it's understandable that a company unlike a monopoly has more incentive to evolve, I don't see any reason why a city taxi monopoly such as Chicago couldn't just make their product more similar to Ubers (regulations aside). I mean - they must also be able to save a ton by getting rid of phone dispatch staff. And anyone with a medallion obviously has an interest in their services not becoming obsolete.
The apps obviously look almost the same and it wouldn't surprise me if they came from the same developer in many cases. Here are four of the largest for comparison:
https://itunes.apple.com/se/app/sverigetaxi/id504540989?mt=8
https://itunes.apple.com/se/app/taxi-sthlm/id375988670?l=en&...
https://itunes.apple.com/se/app/taxi-020/id503115316?l=en&mt...
https://itunes.apple.com/se/app/taxi-kurir/id503098740?l=en&...
You can see the last 3 just use a skinned standard taxi dispatch app! I appreciate the effort of creating the platform from scratch, but a taxi company shouldn't have to do that. They just license the app.
These taxi companies each had dispatches with many dozens of operators, so they save a good amount of money on using an app and cutting back on people) No difference from other commerce.
The main difference between Stockholm and Chicago is of course that the "taxi companies" are the large city or nationwide companies battling for market share. A taxi driver or group of drivers can also be a "company" but they just operate under the umbrella of the larger brand - who handles all dispatch, branding etc just like a city wide monopoly usually does.
So while it's understandable that a company unlike a monopoly has more incentive to evolve, I don't see any reason why a city taxi monopoly such as Chicago couldn't just make their product more similar to Ubers (regulations aside). I mean - they must also be able to save a ton by getting rid of phone dispatch staff. And anyone with a medallion obviously has an interest in their services not becoming obsolete.
A couple of apps for taxis have appeared in Sydney in less than a year after Uber arrived.
Taxi medallions were being sold for $300k three years ago. Taxis likely didn't buy with cash, but rather financed them, leading to significantly higher operational expenses.
Yeah but don't those medallion prices tank now, so anyone who got one recently doesn't have that overhead? Obviously those who bought into the pyramid ponzi scheme at the wrong point will go under. The use of medallions where it still exists needs to die - but what better time than when prices reach bottom?
> so anyone who got one recently doesn't have that overhead
If you were a lender and you are aware that the medallion market hasn't bottomed, would you lend $200k-300k? Probably only if the down payment was very significant. The article states that foreclosures on medallions are increasing, so the market hasn't capitulated.
If you were a lender and you are aware that the medallion market hasn't bottomed, would you lend $200k-300k? Probably only if the down payment was very significant. The article states that foreclosures on medallions are increasing, so the market hasn't capitulated.
I do not know about you but I have very low requirement: I just want that when I take my wife on a date to use transportation which does not smell bad and it is not dirty. Nothing else. So I have to chose Lyft or Uber.
I'm curious, is buying a car out of the question?
I also face the same problem when going out with my wife and hate hailing taxis on the road. Uber is just so much better, I am even ready to pay more than what they are asking. But every few weeks I think about buying a small car, so I don't have to depend on Uber.
I also face the same problem when going out with my wife and hate hailing taxis on the road. Uber is just so much better, I am even ready to pay more than what they are asking. But every few weeks I think about buying a small car, so I don't have to depend on Uber.
They have much higher legislative hurdles to overcome?
Would they need to pass red tape to have their customers hail with an app rather than call a dispatcher? Sounds like the medallion system isn't the only thing wrong here.
They have an app. It's also more regulated.
Taxis are also horrible so I'm not convinced they could compete in any case but it's not a fair playing field.
My bet though is on Lyft/Uber becoming just as horrible once the VC money dries up. It will be interesting to see what legislation will arise between then & now.
Taxis are also horrible so I'm not convinced they could compete in any case but it's not a fair playing field.
My bet though is on Lyft/Uber becoming just as horrible once the VC money dries up. It will be interesting to see what legislation will arise between then & now.
| The union is calling on the city take several actions to provide relief for the city’s struggling taxi industry, including changing rules so taxi drivers aren’t required to replace their vehicles as often
Right! Let's loosen the rules and allow the cabs to be in worse condition than they already are, that will get the customers back! /s
Right! Let's loosen the rules and allow the cabs to be in worse condition than they already are, that will get the customers back! /s
Well, we bail out banks who make shoddy investments.
That's my only counter to the idea that medallions are going to ruin some lives soon.
That's my only counter to the idea that medallions are going to ruin some lives soon.
Most restaurants fail and we don't bail them out.
I think the big banks are a special case because letting them fail may be more expensive than bailing them out.
I think the big banks are a special case because letting them fail may be more expensive than bailing them out.
Chicago taxis are some of the worst. God I hated them. I wonder why they're not doing well?!
They should just do what Uber did: be heavily invested in by the mayor's brother.
Was probably going to happen eventually since Lyft and Uber offer a better product, but it's interesting that the big ride sharing companies aren't profitable yet either.
Just waiting for Uber to screw over their own drivers with autonomous vehicles and see if these same arguments will be presented.
"including changing rules so taxi drivers aren’t required to replace their vehicles as often"
So.. to save this industry let's make it less enticing? I'm not saying Ubers and Lyfts are always nice, new cars; but they usually aren't models from before 2010 either. Call us posh, but if you can get a ride in a nicer car for the same price, that would be a thing to consider when picking a mode of transport?
So.. to save this industry let's make it less enticing? I'm not saying Ubers and Lyfts are always nice, new cars; but they usually aren't models from before 2010 either. Call us posh, but if you can get a ride in a nicer car for the same price, that would be a thing to consider when picking a mode of transport?
The fact that someone would pay $300k for the right to drive a taxi blows my mind.
good riddance.
The "personal transportation" market has massively changed. Whether it's for the better or worse simply doesn't matter.
Chicago, by way of example, does not "owe" the cab industry anything. And, in fact, likely needs to make their own changes to manage the quickly-depreciating medallion model. The government in no way insured that medallions would be a winning business investment. And, harshly, those defaults (on the secondary market, no less) likely won't have much economic impact.
I'm firmly behind Judge Richard Posner: "Were the old deemed to have a constitutional right to preclude the entry of the new into the markets of the old, economic progress might grind to a halt."