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Let’s Support Uber, Lyft, and Free Markets
Ride share companies like Uber and Lyft offer customers added choices in transportation. Unfortunately in big cities like Atlanta, governments have erected barriers to entering the taxi business by requiring taxi drivers purchase expensive “medallions” and limiting how many taxis can operate in their cities. These regulations artificially raise prices and stifle innovation.
In some cities around America, government officials have even threatened Uber and Lyft drivers with arrest, and had their cars impounded. Here in Atlanta, taxi medallion owners have sued Uber drivers trying to prevent them from being in business.
These types of policies harm low- and moderate-income people by preventing them from entering a business that could lift them out of poverty. The taxi industry is just one example of government policies that, while well meaning, harm families. Georgia requires licenses and training for a host of jobs. Some of these requirements are necessary but often times they are not — to the detriment of honest hard working people. Let’s do away with needless regulations and allow the free market to work. Customers will be better off with more choices and jobs will be created, allowing people to provide for themselves and their families.
Since this is an election year, I’ve produced a commercial called “Ride Share Freedom” that makes this point. I’d like to hear your thoughts on this subject.
Published in General
Does Uber and Lyft support an end to taxi and limo regulation? After all, is it not the regulation of taxis which creates a market for Uber and Lyft in the first place?
No. Uber is a way for people to get a lift from any nearby driver who thinks he has the time and would not mind making a little money. The fact of taxis can be irrelevant.
I couldn’t agree more!! Same goes for Airbnb, EatWith, and all the other parts of the “sharing economy” out there. This is going to be a hard fight. There are many entrenched interest out there with a lot of power that are going to fight this tooth and nail. Freakonomics’ last episode was about this very subject. It is well worth a listen.
I see this as the opening salvo of what will be a long struggle as automation starts to replace drivers, chefs, and many other low skilled fields.
To a certain extent you are correct. Uber and Lyft are popular because they are filling an unmet need in the market. I maintain the need exists because of regulations placed on the taxi industry by local and state governments.
In Atlanta, and every other major city, taxi drivers are required to purchase a medallion. Cities limit the number of medallions so they can limit the number of taxis in their city.
They Atlanta City Council no more knows what the market demand for taxi services is than the old Soviet Wheat Czar knew how much wheat to grow in a given year.
The medallion system also stifles innovation. The smartphone app Uber uses eliminates the need to the customer to call a cab and greatly reduces wait times. Most Uber pickups take place in 5-10 minutes. Also, the customer pays via the app so no need to have cash with you. This is another market innovation which customers really want.
Get rid of the medallion system, let Uber/Lyft compete against traditional taxi companies and see what happens.
Mostly what this demonstrates is that government licensing and regulation is aimed at closing rather than opening markets while protecting both revenue and graft opportunities. Look around and find a regulated industry that is better off for it.
Why should Uber and Lyft get to ignore all the burdensome regulations and local laws that, well, burden everyone else?
If they want to lobby to do away with the taxi medallion system, hey great. Go for it.
But when they just move into a city and start ignoring the local law my sympathy goes away, for the same reason I have no sympathy for Barry Obama and his contempt for the law.
I generally agree, but something has to add feedback to the existing system.
I was on the phone with my cousin who was walking in Brooklyn trying to catch a cab. He gets in to a cab and told the cabbie that he wanted to go to Grand Central Station.
Hilarity ensued.
Although “Grand Central Station” could well be the most common thing told to cabbies in this hemisphere, it did not register with this cabbie. The cabbie said there were two Grand Central Stations. Although I assumed he was considering Penn Station, at some point the heavily accented cabbie indicated he thought the destination was LaGuardia (perhaps the other Grand Central Station was JFK). My cousin had to pretty much point the guy toward Manhattan and then hung up on me so that he could focus on navigation.
Also, the laws involved are often less the medallion cab laws but the livery cab laws, if any.
Lobbying never removes regulation.
The way Uber is competing is the only effective way to reduce regulation. Remove the incentive for the regulated industry to support regulation, and you will end regulation.
I want freedom of contract between people. No regulation should stand in the way.
Xennedy – On another thread Matty Van recounted the history of Vanderbilt, who bucked the monopoly NY state had given Fulton and his consortium for the ferry from NYC to NJ. He set up a rival ferry from NJ to NYC. He ended up in court where the ability of a government to grant monopolies was struck down. But none of that would have made any difference if he hadn’t provided a better service – more comfortable, and lots cheaper. Fulton’s group ended up going bankrupt.
All medallions and licensing are is another version of monopoly – this time by the government. You have to win their influence to enter the market. Markets should be free. Uber & Lyft are pushing the monopoly, providing a better service that people find good. It’s the only reason they pose any “threat”. The complaints are because the government charges a graft fee to the medallion crowd and they are upset their monopoly is being threatened.
I sympathize with the desire to make it easier for people to make a buck. Starting a business of any sort is remarkably difficult from a paperwork perspective.
But with these particular services in the ‘distributed’ economy I think we shouldn’t lose sight of why they are really popular: They are devices that permit people to more easily do things that used to be quite common. Especially in times of economic distress.
As per Steve Sailer, you can give something a cute name and make it available in the App Store. But what we’re really talking about here are gypsy cabs and renting out spare rooms.
These things do not lift anyone out of poverty. You already need to have a car or a house with a room worth renting. These are the types of things middle-class people do after eating the seed corn in order to keep up appearances or avoid destitution. The popularity, then, of services like this should actually make us ashamed.
I disagree completely. I would bet that a good chunk of drivers on Uber and Lyft are swayed by the argument of letting someone else pay for your gas. Also, why not let someone stay at your NYC apartment while you are in Europe? This is n’t eating seed corn it is maximizing your resources.
Oh and a service like Lyft could make a huge difference in traffic too if it were widely adopted. Average car occupancy is 1.1. Why not worked to bring that closer to 2? Think about the number of cars you could pull off the road.
This sounds like an argument for restricting immigration to people who can speak English, but that’s the topic of another thread.
Anyway- livery cab laws? If the medallion cab laws are irrelevant here then why are we talking about this? Shouldn’t Lyft and Uber just go to court, and make the medallion crowd get off their back?
I don’t entirely disagree with what you’re saying. Especially with AirBnB a lot of the options in tourist neighborhoods are indeed wealthy people with multiple properties, and even large landlords, who are just using the app as an easy add-on to their marketing plan.
But that isn’t who it is in flyover country. And I doubt that’s the demo we’re talking about anywhere with the gypsy-cab market.
We are, though, speculating. My speculation is only my gut, although I do know for certain the AirBnB folks in my own neighborhood are certainly people trying to pawn off a spare room for a night.
And my overall point is still “These sorts of things do not represent actual jobs, and there would be a lot less people willing to do it if our economy didn’t stink a whole lot worse than the numbers suggest.”
Lobbying can’t remove regulation? Really? This seems an odd statement, because lobbying absolutely can get regulation put into place. For example, the light bulb ban came about because GE was unhappy with the low margins for their incandescent bulb business, and successfully lobbied to force people to pay more.
BTW, if you just “let Uber and Lyft compere with the taxi system” with no associated regulation I guarantee you that the quality of your drivers would go way down in heavily populated areas. Maybe that’s OK. The last cab ride I took I had to use my own GPS (on the phone) to get to the destination, so in a lot of cases we aren’t really paying for any human expertise anymore, anyway.
And in lightly populated areas there are no taxis, so the question is moot vis a vis medallion laws and whatnot. It is in places like this, I think, that the new options really shine. There’s not enough business in my town to make a living at driving a cab. Now there is a way for someone in a rough spot to at least make a few bucks doing the gig piecemeal.
BTW, if you just “let Uber and Lyft compete with the taxi system” with no associated regulation I guarantee you that the quality of your drivers would go way down in heavily populated areas. Maybe that’s OK. The last cab ride I took I had to use my own GPS (on the phone) to get to the destination, so in a lot of cases we aren’t really paying for any human expertise anymore, anyway.
And in lightly populated areas there are no taxis, so the question is moot vis a vis medallion laws and whatnot. It is in places like this, I think, that the new options really shine. There’s not enough business in my town to make a living at driving a cab. Now there is a way for someone in a rough spot to at least make a few bucks doing the gig piecemeal.
Ok. I’m shocked, shocked, that the government collects a fee from the taxicab business. I feel for them, as the government also collects a fee from just to work. And I find it odd that the medallion taxicab cab system has survived until now without anyone noticing a monopoly, and getting the Courts to break it up.
[dupe deleted]
[dupe deleted. or at least that’s what I tried. this stuff is messed up right now. I picked the wrong time to revisit Ricochet!]
Karl what do you base your assertion that cab service will be of lower quality when Uber and Lyft come in? I have ridden Uber in San Fran and the car was spotless and the driver was great. Get enough bad reviews and a driver gets kicked out of Uber, do you have any way to provide feed back to a Taxi cab driver?
About the only things courts break up is corporations. Governments rarely get pulled into court for this kind of problem; they hide behind “the need to regulate”.
?But just what IS this if not a monopoly. The government decided how many medallions, who gets them, how much they’ll pay, and the graft payment is “overlooked” but present. No one else is allowed into the game. ?Because. Well, just because. There is no benefit from limiting the number of cabs. There is no benefit from having to pay a bribe to get a medallion. There IS a benefit when the police round up anyone attempting to enter “your” market.
Exactly! The Uber driver’s protection is the market. The taxi driver’s protection is the medallion – which is the government.
I googled “taxi cab monopoly litigation” and received “about 1,990,o00” results. Hmmm. Anyway, as far as I’m concerned I don’t have a dog in this fight, as I neither drive a cab nor ride in them.
The rest of my comment deleted, as I really hope I’m just too cynical today.
Timely:
http://abcnews.go.com/Travel/wireStory/san-diego-cabbies-cry-foul-body-odor-test-25452447
That ABC news story is simultaneously hillarious and sad. 52 criteria cabbies must comply with in San Diego? Wow.