UberX and similar non-taxi ride services

[Pete from Boston]

What do people here think about the rise of non-taxi car-hailing services like UberX?  It has been a huge debate in this area.

On one side are people claiming this is a brilliant revolution that frees a constrained market, lowering prices and improving car access.  These folks tend to decry obstructions to it as luddism and pandering to corrupt monopolies.  There are a lot of tech-industry people in this camp.

On the other hand are people who say the services circumvent the security of background checking and price protections built into the cab industry.

What I haven't heard much of is the fairness of people losing tremendous equity in their medallion investments because played by established rules (laws), and the fairness of folks entering into that same business without having to make the same investment, dramatically devaluing medallions that have in some cases required tremendous sacrifice to buy.  The response I've heard most amounts to, "Why is that my problem?  I deserve the cheap ride without some artificial regulated price." 

I see their point, but it feels to me like allowing your neighbors to start building under a dramatically reduced building code, essentially granting them the same level of hone value as you without the investment you had to make.

Thoughts?

[1995hoo]

I find it interesting the way the people who run Uber seem to think they're not bound by state laws–when Virginia told them to cease operating in the Commonwealth, and when a town in Maryland (I forget which, but I think Annapolis) told them they had to abide by the regulations governing taxis, they essentially said, "We do not" and announced they would ignore the government's orders because they want to "educate" the government on their business. It doesn't work that way. The non-taxi car services are all regulated as well, even if they're not subject to the same regulations the taxis are, and there's no reason why Uber and the like ought to be subject to different rules.

Sure, there have been times in our history when ignoring the law was the principled thing to do. The Montgomery Bus Boycott readily comes to mind. But it's ludicrous to equate an operation like Uber with something like segregated seating on the buses.

[6a]

I see their point, but it feels to me like allowing your neighbors to start building under a dramatically reduced building code, essentially granting them the same level of hone value as you without the investment you had to make.

Thoughts?

Would that really be the case, though? If I were selling a house that was built to code and my neighbors was not, I'd be advertising the hell out of that fact.  I'd think the market would take care of itself in such a case. 

Regarding medallions, yeah, the price of one isn't my problem. That's a case of artificially low supply. I think this is a fine example of the customer demanding a change and the market responding. You want your taxi to be worth the cost of a medallion? Step up the experience of riding in one.  Get one here when I want it, not three hours later. And keep people from pissing on the seats.

Uber and Lyft were recently approved here in Columbus, with many of the insurance and licensing issues being address in the legislation. I'm curious to see if the companies can sustain the hype.

[Mr_Northside]

It's been a pretty big news item here in Pittsburgh as well.  They have been operating despite some citations against drivers and cease and desist orders from the state PUC (why this is something the Public Utilities Commission is in charge of is beyond me). 
Everyone I know who has used them says the whole experience was way better than Yellow Cab, and most public comment/letters to the editor take that tone, since unless you are going to be a fare to the airport, cabs are notoriously late/no-shows, and expensive. 
So, basically, there is a push to make more common-sense rules, instead of what we have now.

[Pete from Boston]

I see their point, but it feels to me like allowing your neighbors to start building under a dramatically reduced building code, essentially granting them the same level of hone value as you without the investment you had to make.

Thoughts?

Would that really be the case, though? If I were selling a house that was built to code and my neighbors was not, I'd be advertising the hell out of that fact.  I'd think the market would take care of itself in such a case. 

Regarding medallions, yeah, the price of one isn't my problem. That's a case of artificially low supply. I think this is a fine example of the customer demanding a change and the market responding. You want your taxi to be worth the cost of a medallion? Step up the experience of riding in one.  Get one here when I want it, not three hours later. And keep people from pissing on the seats.

Uber and Lyft were recently approved here in Columbus, with many of the insurance and licensing issues being address in the legislation. I'm curious to see if the companies can sustain the hype.

I guess my example is of much less expensive standards being imposed on one party and not another, which is not fair competition, whatever you think of the standards. 

As far as the price of medallions, the system created by law causes that scarcity.  People who took out a decades-long loan (or who just paid cash–either way) did so because that was the cost of playing within the rules. 

Is it fair competition that a company gets to ignore those rules, devalue the investment individuals made in a low-margin, long-hours business, and get a free pass just because it has a good idea or does a good job?

I think it isn't.  I'm not sure what the fair answer is, but if there are two classes providing the same service, they should do business under the same terms, or else talk of fair competition ends up necessarily tainted.

[6a]

Oh, I agree 100% about the fair competition. I looked up a couple articles pertaining to Boston - it seems the taxi union is raising the biggest stink.  Of course they are, their business model is being threatened. But is that alone, or even the medallion system, good reasons to ban competition? I'm not even necessarily asking you, I'm working this out in my head. 

If they do end up getting approved in Boston, and that devalues the medallions, is that still unfair? I'd think not, that's a cost of working with a century old business model.  Taxi owners can still pay to play by their rules, app services would have another set.  Some people shop at Nordstrom, some at Wal Mart.

[Pete from Boston]

Except Nordstrom doesn't exist in a government-sanctioned system of price and other controls that they had to raise tons of capital to participate in, while Wal-Mart runs free. 

It's primarily the cab companies' fault for not being quicker to innovate here, but even still, if their very expensive model is to be dismantled, it should be done carefully and thoughtfully, not instantaneously because some yuppies keep shouting at council meetings.

[roadman]

Except Nordstrom doesn't exist in a government-sanctioned system of price and other controls that they had to raise tons of capital to participate in, while Wal-Mart runs free. 

It's primarily the cab companies' fault for not being quicker to innovate here, but even still, if their very expensive model is to be dismantled, it should be done carefully and thoughtfully, not instantaneously because some yuppies keep shouting at council meetings.

You can have reasonable regulations (driver qualifications, minimum vehicle standards) for taxi and livery companies without the need for the medallion system.  Just because some people took a risk in purchasing something that was overvalued on the private market is no reason to justify continuing a system that provides NO BENEFITS to the users of the service.  For that matter, perhaps we should be asking why is it even legal for a government-issued license to be bought or sold on the private market in the first place.

Besides medallions, the other thing that really needs to be changed with how taxis operate is this utter nonsense of "You bring someone into Boston from (insert name of your favorite suburb here), but you cannot pick up somebody from Boston going back to that suburb".  All that does is waste time, fuel, and creates unnecessary pollution.

[Pete from Boston]

Doesn't government share some responsibility in this for mandating the medallion system?  It has required them for businesspeople to provide a service the public demands.  Who created this mess, anyway?

I completely agree that the taxi fare rules seem onerous and arcane.  I've been turned down late at night when cabs were scarce for those reasons, and also very nervously picked up by drivers who couldn't resist.

[The Nature Boy]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

[english si]

In London the death-causing polluters black cabs went on strike (read try and cause a big traffic jam) over Uber. Backfired as it made Uber go from an in-the-know niche service to something that the whole city knew about.

The issue that the black cabs went nuts over is that the Uber app calculates the fare by distance - minicabs* aren't allowed meters in London (the rules about taxis in London are crazy and wikipedia just said "complicated" and "unknown to outsiders"). However the way Uber does it is not illegal as it's not measured by something in the cab.

Locals, save the rich, will usually use minicabs if they plan on getting a taxi. Black cabs mostly deal with tourists who, other than the iconic car, don't know much about how hard The Knowledge is (I have a mind for geography, a decent memory, and a love of roads, but I'd struggle to get The Knowledge in the average time of 34 months). At least, other than taking 3 years to learn The Knowledge, you don't have to spend too much to be able to drive a Black Cab - looking it's about £1000 in admin fees - other than getting a Black Cab (very expensive vehicles) itself.

*licensed private hire vehicles - you can't hail them (with public warning campaigns about rape that don't mention that its illegal for them to take you as a fare unless you pre-book, just that you will be raped if you get in a minicab you've not booked).

[Pete from Boston]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

I'd expect that to be $20 or so, plus tip.  Unless you're in a hurry and it's not a busy time of day, you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

[The Nature Boy]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

I'd expect that to be $20 or so, plus tip.  Unless you're in a hurry and it's not a busy time of day, you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

Yeah, it was my first time in the city (any city) and I had no experience on the subway. I quickly learned though.

[roadman]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

$2.10, but only if you have the magic CharlieCard (RFID card).  If you don't, it's $2.50.  And getting the RFID cards is not as easy as one might think.

Plus, depending on the time of day and accounting for the usual problems the MBTA seems to have (be they mechanical, signal, or track related), 20 minutes from South Station to Harvard Square might be optimistic.

[nexus73]

There should be no government regulation of the taxi business.  The laws on the books requiring vehicles to be licensed, insured and pass safety/smog inspections (as per the jurisdiction the vehicle is registered in) is enough for the vehicles.  Drivers need a license and to be considered an acceptable risk by the taxi services's insurance company.  No more is needed on the government end.

I ran a taxi fleet of 12 vehicles and did so with ZERO government regulation but with careful attention to taking care of drivers, vehicles, vendors and most importantly, the customers.  That business doubled in a recession that caused Bush The First to lose the election under my leadership.  We had reasonable rates, fast response time (90% of calls picked up in 10 minutes or less) and the drivers made $100 a shift.  This was in the late 80's/early 90's.  Since I have a great head for business I saved this company from collapse, turned it into the second largest in Oregon at that time and provided my community with a tremendous resource WITH NO GOVERNMENT REGULATION OR AID.

When I see how piss-poor things are in PDX for cab service, a highly regulated market that protects the incompetent, I cringe.  Had I ever decided to enter that market and been given a free hand with no crony capitalism/nanny statism going on, I would have owned that market lock, stock and barrel within two years ON MY OWN MERITS. 

Guess what?  Grocery stores, clothing stores, restaurants, music shops, electronics retailers and many other businesses manage to do just fine without the protected, er, rigged market that the taxi industry enjoys.  Other than obeying zoning and business license laws, YOU CAN OPEN A STORE AND TRY YOUR HAND AT BUSINESS!!!  Capitalism at it's best folks.

Let the medallion system and anything like it die a fast death so new operators can come in.  Some will do poorly just like some other businesses do.  Some will do well as some other businesses do.  That's the nature of the capitalist beast.  If you aren't up for taming it, don't go running to Uncle Sugar and his minions for help to keep the competition out!

If you want a government ride, take public transit.  Leave the private hired ride biz to the pros and those who think they can be one.  In the end everything sorts itself out.

Rick

[mtantillo]

I think part of this is a problem with where to draw the lines in the "sharing economy". I think the sharing economy is a great thing, as it allows better use of resources that would otherwise sit idle (or be deadheading while spewing exhaust into the air). If I'm on vacation, why should my apartment sit empty when a visitor to town could benefit by staying in it? Why should I pay to park my car at the airport when someone else could be using it? I think it is perfectly reasonable to loan my apartment and car to a friend when I'm away (and to ask for a reasonable amount of compensation in return), and the sharing economy players (AirBNB for example) simply connect the haves with the ones who are in need. Likewise, if I am driving from New York to Boston, and I have an extra seat in my car, why wouldn't I want to put a person into that seat and charge them for the ride? It is likely a better experience for them than riding the bus or Amtrak, and it is an empty seat that otherwise wouldn't be filled and just go to waste. 

But the key to all of this is that either: I have something that I normally use all the time, but am temporarily not using so I can go on vacation and want to let someone else use, or I have extra capacity in my vehicle that I am trying to fill on a trip I am taking anyway. In my mind, it becomes a totally different game if I were to buy an apartment that I never plan to live in for the sole purpose of regularly renting out. Or if I start making car trips that I wouldn't otherwise be making solely to be able to charge someone for a ride. Then it becomes more of an example of me providing a service to users for the purpose of making money, rather than incidentally making a few extra bucks while I am away on vacation by renting out the stuff I don't need.

Where I draw the line is that if I am offering a ride from a specific place to another specific place at a certain time, then that seems to be "sharing" which I should be free to do at will, whereas if I offer up my driving service for anyone to choose their own  origin, destination, and time, then that is more like "providing a service" which should be regulated alongside any similar established services.

Therefore, I have no problem with regulating Uber/Lyft as Limos (they really aren't taxis since people aren't hailing them, they are more equivalent to car service, or NYC's "black cars" because they are reserved in advance, even if only minutes in advance). But I do have a problem with trying to regulate "informal sharing" that does not occur on a regular basis.

[Pete from Boston]

There should be no government regulation of the taxi business.  The laws on the books requiring vehicles to be licensed, insured and pass safety/smog inspections (as per the jurisdiction the vehicle is registered in) is enough for the vehicles.  Drivers need a license and to be considered an acceptable risk by the taxi services's insurance company.  No more is needed on the government end.

I ran a taxi fleet of 12 vehicles and did so with ZERO government regulation but with careful attention to taking care of drivers, vehicles, vendors and most importantly, the customers.  That business doubled in a recession that caused Bush The First to lose the election under my leadership.  We had reasonable rates, fast response time (90% of calls picked up in 10 minutes or less) and the drivers made $100 a shift.  This was in the late 80's/early 90's.  Since I have a great head for business I saved this company from collapse, turned it into the second largest in Oregon at that time and provided my community with a tremendous resource WITH NO GOVERNMENT REGULATION OR AID.

When I see how piss-poor things are in PDX for cab service, a highly regulated market that protects the incompetent, I cringe.  Had I ever decided to enter that market and been given a free hand with no crony capitalism/nanny statism going on, I would have owned that market lock, stock and barrel within two years ON MY OWN MERITS. 

Guess what?  Grocery stores, clothing stores, restaurants, music shops, electronics retailers and many other businesses manage to do just fine without the protected, er, rigged market that the taxi industry enjoys.  Other than obeying zoning and business license laws, YOU CAN OPEN A STORE AND TRY YOUR HAND AT BUSINESS!!!  Capitalism at it's best folks.

Let the medallion system and anything like it die a fast death so new operators can come in.  Some will do poorly just like some other businesses do.  Some will do well as some other businesses do.  That's the nature of the capitalist beast.  If you aren't up for taming it, don't go running to Uncle Sugar and his minions for help to keep the competition out!

If you want a government ride, take public transit.  Leave the private hired ride biz to the pros and those who think they can be one.  In the end everything sorts itself out.

Rick

So people who did this business the way the law required just start this new era deep, deep in the hole due to another arbitrary (proposed) government decision? 

That, too, is government meddling with people's money, and with no accountability for the consequences.

[The Nature Boy]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

$2.10, but only if you have the magic CharlieCard (RFID card).  If you don't, it's $2.50.  And getting the RFID cards is not as easy as one might think.

Plus, depending on the time of day and accounting for the usual problems the MBTA seems to have (be they mechanical, signal, or track related), 20 minutes from South Station to Harvard Square might be optimistic.

I got a CharlieCard pretty easily..............

I can't find it anymore but I HAD one.

[mtantillo]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

$2.10, but only if you have the magic CharlieCard (RFID card).  If you don't, it's $2.50.  And getting the RFID cards is not as easy as one might think.

Plus, depending on the time of day and accounting for the usual problems the MBTA seems to have (be they mechanical, signal, or track related), 20 minutes from South Station to Harvard Square might be optimistic.

I got a CharlieCard pretty easily..............

I can't find it anymore but I HAD one.

Someone told me you can just ask station attendants for Charlie Cards and they give them to you for free.

My problem with them is that they "expire". Why do they need to expire? I've had my WMATA SmarTrip card for 12 years and it still works just fine. But no, Charlie Cards expire, unless you use it in the month when it happens to expire, where it uploads new software to extend the expiration date. That is fine and dandy if I go to Boston regularly, but I only use the T a couple times a year. Just so happens that in 2012 I used it the month the card expired and got the update. Otherwise, I'd have to get a new card every few years. I imagine quite a few "occasional" visitors to Boston are suburbanites who live very close by too.

[The Nature Boy]

What is the cab rate in Boston? 5 years ago, I took a cab from South Station to Harvard and paid $25. That was enough to scare me from ever trying that again.

you're better off riding the Red Line 6 stops (under 20 minutes) for $2 and change.

$2.10, but only if you have the magic CharlieCard (RFID card).  If you don't, it's $2.50.  And getting the RFID cards is not as easy as one might think.

Plus, depending on the time of day and accounting for the usual problems the MBTA seems to have (be they mechanical, signal, or track related), 20 minutes from South Station to Harvard Square might be optimistic.

I got a CharlieCard pretty easily..............

I can't find it anymore but I HAD one.

Someone told me you can just ask station attendants for Charlie Cards and they give them to you for free.

My problem with them is that they "expire". Why do they need to expire? I've had my WMATA SmarTrip card for 12 years and it still works just fine. But no, Charlie Cards expire, unless you use it in the month when it happens to expire, where it uploads new software to extend the expiration date. That is fine and dandy if I go to Boston regularly, but I only use the T a couple times a year. Just so happens that in 2012 I used it the month the card expired and got the update. Otherwise, I'd have to get a new card every few years. I imagine quite a few "occasional" visitors to Boston are suburbanites who live very close by too.

I just asked for mine and they gave it to me. I see no reason for the MBTA to make it difficult to get. More people having a CharlieCard saves them the money of having to print and dispose of tickets.

But back to this taxi business.......

I see a good reason for the government to regulate taxis. It has a compelling interest in ensuring that taxi drivers are good drivers and that their cars are regularly expected and in safe condition. Unlike going to a store or buying food, you often aren't in a position to conduct research on the car and driver before making the choice. The choice of taking a cab often comes down to which cabbie happens to be near you. If you let any yahoo with a car act as a taxi then you risk potentially unsafe drivers getting on the road and killing or hurting unaware passengers.

[1995hoo]

Mike mentioned Airbnb (or however they capitalize it). There was a report in the news the other day about some idiot in California who used that service to let someone stay in his apartment for a length of time that, under state law, makes them month-to-month tenants and restricts his right to get his place back.

It's all well and good for the 20-somethings to talk about how these "sharing" services are "supposed" to work, but there are people out there who can and will game the system for their own advantage because they know what the laws say and those laws trump the "rules" the "sharing" services seek to impose. The proverbial bottom line is that you use services like Uber or Airbnb or the like at your own risk.

http://www.cnn.com/2014/07/23/travel/airbnb-squatters/index.html

[The Nature Boy]

There's an easy way to fix the airbnb problem. Airbnb could simply make it impossible to book a stay longer than 30 days through their site. You only become a month to month tenant if you pay rent for over a month straight.

[corco]

Absolutely the most sustainable, practical thing to do is to spread resources as much as possible,  so these new service are a fantastic innovation.

I'd like to see it met somewhere in the middle. Medallion systems limit supply in order to allow for higher pricing, but they also provide some degree of safety.

What I'd like to see is a new type of medallion system for everybody to use that is not supply limited. Basically a "taxi operator's permit" of some sort, so that government ensures that the drivers are fairly safe people and the vehicles are in good operating condition with some level of insurance- possibly just through regulations requiring the cab operator/Uber to implement certain standards, with a sound auditing system in place. The fee for such a permit shouldn't be any more than the cost of administration with an unlimited supply of permits, and that permit should apply to ride-sharing services and taxi drivers alike. As for fare regulation...eh, I'm not sure if it's a good idea or not. Certainly fares should have to be transparent to the rider before they get into the vehicle, and you don't want to confuse tourists by having every vehicle carry different fares, so there's pros and cons to that.

Uber and Lyft are Good Things- they are a free market solution that maximizes efficiency in a way that regulated taxicabs can't, so there should be some encouragement to keep these things around.

[The Nature Boy]

Is there a good reason for artificially limiting the amount of taxis? I can only imagine that it might be to limit traffic on the roadways but in a major urban area, that's a flimsy excuse.

The state DOES have to regulate taxis but restricting them is a bad idea.

[corco]

Is there a good reason for artificially limiting the amount of taxis? I can only imagine that it might be to limit traffic on the roadways but in a major urban area, that's a flimsy excuse.

The state DOES have to regulate taxis but restricting them is a bad idea.

Basic economics- if you lower supply but keep demand the same, prices go up, in this case to a living wage for cabbies. The nice thing about Uber and Lyft is that most of its drivers use it for extra cash, not as a means to make a living, which means prices can be lower. The downside is that the supply is flexible (if nobody feels like driving, there's no cars), but realistically that's how taxis are in a lot of areas anyway.