8 ms·

Judge rules on taxi industry lawsuit: Compete with Uber or die

62 points by andrewl 11y ago

username3 11y ago
Where was this judge for the Aereo case.
ihsw 11y ago
This is fascinating -- as revenues for municipally-backed/traditional taxi companies fall, we are starting to see municipalities raise fees on the taxi unions to make up the shortfall. Oftentimes these taxi unions wield striking as leverage in negotiations, a tactic which is rapidly losing effectiveness and is generally counter-productive. So the judiciary doesn't care for legal challenges against Uber, municipalities are actively working against taxi unions, and consumers are flocking to Uber in droves -- what is a unionized taxi driver to do in this kind of political and economic climate?
- throwaway1967 11y ago
  > what is a unionized taxi driver to do in this kind of political and economic climate? Do the moral thing and step-down from their monopolies, and embrace competition. Why do you care about immoral people? Those who benefit from monopolies are not above robbers who benefit from a temporary monopoly on violence to bilk their victims. EDIT: response to ishw (since my posts are being delayed): The drivers that took credit in order to benefit from an immoral monopoly subsidized by tax-payers had it coming. Public libraries are available and anyone can learn where this road leads by picking up Economics in One Lesson which is eminently readable and widely available. This is like saying "this gang of robbers paid the government X dollars backed by credit for the right to rob, and we can't put those robbers in a position of defaulting on their now-worthless license to rob". Uhm, yes we can, because the "medallion" they bought is precisely the instrument that makes it illegal for everyone else to compete with them. In other words, a criminal is not exempt from their crime just because they purchased the instrument, that enabled them to commit the crime, with credit. When you say "Taking the moral highroad is not an option here", therefore, that's just a misinformed reaction to a situation that, as you correctly noted, allows for no way out that isn't harmful to one or both parties. Which is why this sort of engagement (monopolistic or monopsonistic) is to be discouraged and why only voluntary contracts should be enforced by Law. EDIT: response to mbreese: Wow... your response is a complete non-sequitur to what I said.
  - ihsw 11y ago
    The article mentions most medallions are backed by credit -- that would mean the drivers would be put in a position of defaulting on their now-worthless medallions. Such investments would destroy their financial prospects for the near future if not in the long term due to the exorbitant cost associated with holding medallions. Taking the moral highroad is not an option here. It's easy to advocate the free market from afar, but not everybody is prepared to even begin participating in the free market due to being financially shackled. I was going to suggest that Uber operate a program of financial assistance to taxi drivers looking to flee the credit-subsidized catastrophe bearing down on them in exchange for multi-year employment contracts, but the collective value of these medallions is estimated at $10 Billion. Yes, ten billion USD. How would such a program work? Could it work?
    - aikah 11y ago
      > The article mentions most medallions are backed by credit -- that would mean the drivers would be put in a position of defaulting on their now-worthless medallions. A medallion buy-back is the only fair solution (for individuals, not for taxi companies). So there should be some kind of compensation so we can all get out of that system, system the local legislator created. But it shouldn't be up to Uber to pay, no matter how I dislike Uber, they didn't create the problem. The whole "free but paid because of scarcity" medallion fiasco is the real cost of corruption, and tax payers always foot the bill sooner or later in these case.
    - bcoates 11y ago
      The drivers don't generally personally own the medallions. The medallions are owned by companies who mortgage them to banks. The medallion collapse means these companies almost certainly have negative value, and if the owner isn't making enough money from it they'll just walk away. The bank will then have to legally recognize what is already obvious (that the loan on the medallion will not be paid as agreed, and the collateral is worthless). The bank may have to call in insurance and some bank customers may take some losses. $10 billion isn't going to break the bank insurance industry. What about the drivers? They've already been fired, that's why the cabs are sitting idle. There's no need to help the financial speculators.
- creeble 11y ago
  "what is a unionized taxi driver to do in this kind of political and economic climate?" Start driving for Uber? And try and organize a union there?
  - serge2k 11y ago
    oh but you are a contractor then.
msandford 11y ago
That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee that they will continue to act a certain way in the future. Spectrum auctions could be considered similarly. One day the government could decide to auction off tons more spectrum, devaluing the existing licenses. It'd suck that they did that, and that in hindsight you paid too much for what you got, but that's just the way it works.
- x1798DE 11y ago
  It would suck for existing spectrum holders, but not for the spectrum consumers. The same thing happens with any commodities, anyway. If I just bought a diamond mine and they discover a massive vein of new diamonds in an easily accessible place, that sucks just the same.
  - gadrfgaesgysd 11y ago
    Ironically the diamond industry is controlled by a few large companies inflating the price by artificially restricting availability.
- 6stringmerc 11y ago
  Or, in the case of Copyrights, a government granted asset can be an entire business model, and when efficient at making money, the industry becomes a force that can strong arm the government to further its interests at home (Copyright term extensions) and abroad (SOPA/TPP).
- hackuser 11y ago
  > That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee that they will continue to act a certain way in the future. I see that problem with any asset; 'past performance is no guarantee ...'. And one reason any asset can be unpredictable is the behavior of actors on which it depends; for example, if Apple changes the rules or features for the next version of iOS, your app might not be viable anymore. I don't see government as a special case.
wehadfun 11y ago
Does Uber pay fees to the Taxi Limo Commission?
- bbanyc 11y ago
  Yes. In NYC Uber is a licensed car service like Carmel and Dial7.
wehadfun 11y ago
Could a maddalion holder accept Uber rides as well?
grecy 11y ago
It will be interesting to see if this pushes any traditional cab companies to become their own "mini Uber". i.e. sell all their medallions, get rid of all their regulations and expense overhead, and just operate all their drivers like Uber operate theirs. At which point competing should be easy enough. I think we're at a very interesting point in the Developed world - in the 80s, 90s and 00s everything about our society became more and more regulated and safety conscious (hotels, taxis, health care, education) meaning costs skyrocketed, and the cost of entry to compete in those markets became astronomical. Now we're using technology to go back to way things used to be - less regulation, less rules, (arguably) less safety. Spend some time in the Developing world and you'll see their society still works like this - people will let you stay in their house for a few bucks a night (airbnb), people buy minivans then drive around picking people up for a fee (uber), etc. etc. It's interesting we had to use technology to go back to the way things used to be in these areas. I'm looking forward to seeing the uber/airbnb equivalent for education, healthcare, energy, etc.
- toomuchtodo 11y ago
  > I'm looking forward to seeing the uber/airbnb equivalent for education, healthcare, energy, etc. The total disregard for laws and regulations? Exciting. Fingers crossed Uber burns up it VC money sooner than later. It's pretty terrible when people on HN pine for the days of less developed countries (no worker protections, no labor/safety regulations).
  - grecy 11y ago
    > It's pretty terrible when people on HN pine for the days of less developed countries (no worker protections, no labor/safety regulations). The Developed World can not continue with it's standard of living, it's simply not sustainable. Something has to give. The way I see it, services like Uber and airbnb can slowly chip it down to something sustainable, or we can hold onto it until the bitter end when it all comes crashing down. Also, just because a job is offered with no worker protections, no labor/safety regulations etc, it doesn't mean a person has to take it. People vote through their actions.
andrei512 11y ago
In Romania most taxi companies have their own app. This change started about 3 years ago.
- username3 11y ago
  How's Uber doing in Romania?
6stringmerc 11y ago
Hm, I'm both impressed and a little cockeyed at the ruling by regulators that e-hails are "pre-arranged travel" for the purpose of defining the service and noting its exemption from needing a medallion. Oh I get it - that's clearly a distinction to hammer home for the benefit of Uber. As the article points out, one of the competitive advantages Uber has is the rapid pace of pickups in Manhattan - within two minutes. Quite a remarkable achievement in getting the efficiency of "pre-arranged travel" down to less than 120 seconds. I wonder what the conversations around Melrose Credit Union were like when they decided to, metaphorically speaking, put all their eggs in one basket.
- arantius 11y ago
  It's not about amount of time, it's order of operations. Taxi: already on the street, driving around, I try to get flag one down by essentially luck. Pre-arranged: I contact you, tell you where I am, you specifically set out to pick me up. Pre-arranged is exactly how traditional car services have always worked. The fact that improved technology means pre-arranged also can be fast is a good thing.
nzoschke 11y ago
In SF I always use Uber over taxis for the better experience of hailing and paying for a ride. But within the last year I notice every day how bad Uber drivers are severely affecting the city for the worse. So many uber drivers don't know how to safely park to pick up or drop off passengers without blocking traffic. Drivers don't know the fastest or safest routes to get around with other drivers, busses, cyclists, pedestrians and construction. I don't want to see Uber regulated to hell, but I would like to see features of taxis required for drivers like signs on top of the cars indicating cars for hire, and most importantly lots more training about road safety.
- _-__--- 11y ago
  There is potential for uber infrastructure to self-regulate - continuously giving bad ratings to bad drivers will see them reprimanded in some fashion (I imagine). I've had (mostly) good experiences here in Boston/Cambridge; any bad experiences I've had have been documented with 1 to 2 stars and a quick explanation as to why. I admit that I have no idea how the reprimanding of drivers of the handling of bad customer reviews is performed by Uber. Hopefully it's done in an honest way.
  - bbreier 11y ago
    This is just hearsay, but I was told there is basically a minimum rating and if they drop below it for any meaningful amount of time they are fired.
    - jasonlotito 11y ago
      How can I report an Uber driver who is not my driver?
amelius 11y ago
So how much does it pay to be an Ueber driver anyway? Just curious. PS: Über without the umlaut is spelled Ueber. [1] [1] https://en.wikipedia.org/wiki/%C3%9C https://en.wikipedia.org/wiki/%C3%9C
- tarpherder 11y ago
  Company name, unfortunately, is "Uber". Not "Über".
  - SilasX 11y ago
    Yeah, that's always been a real head-scratcher for me. I see the umlaut in maybe every third reference to the company, and yet they never used it in any official capacity! Worst case of hypercorrection I've ever seen.
brightball 11y ago
Taking a libertarian perspective here, the problem isn't Uber. The problem is that the government tried to artificially limit the supply of cabs with medallions, leading to entrenchment, lack of competition and no urgency to innovate within the industry. So innovation came from outside and it's blowing the whole thing up.
serge2k 11y ago
Sad thing is, it really shouldn't be that hard for them to compete with Uber. It's a customer service issue. * Don't make me wait huge amounts of time, especially without telling me. * Any driver who whines about taking a damn credit card should be fired immediately. Ugh. * Start treating customers well. Uber is hit or miss with this. Far too often I call for a cab and stand around waiting for 40 minutes, then get someone who drives like a maniac and is incredibly rude, and then when I say I need to pay be credit card they whine and cry and outright lie to try to get cash instead.
davidf18 11y ago
As a New Yorker, I am very pleased with the decision. The reason why the taxis are not being used is not because of Uber but rather because the taxi prices are set too high. The way to fix the problem is for the NY City Taxi Commission to lower the taxi fares. With lower fares, more people will take taxis, especially now that there is the new "Arro" app that allows for e-hail of taxis. Lower the prices, and more taxis will be in use. Simple economics!

62 points by andrewl 11y ago

Where was this judge for the Aereo case.

ihsw 11y ago

This is fascinating -- as revenues for municipally-backed/traditional taxi companies fall, we are starting to see municipalities raise fees on the taxi unions to make up the shortfall. Oftentimes these taxi unions wield striking as leverage in negotiations, a tactic which is rapidly losing effectiveness and is generally counter-productive. So the judiciary doesn't care for legal challenges against Uber, municipalities are actively working against taxi unions, and consumers are flocking to Uber in droves -- what is a unionized taxi driver to do in this kind of political and economic climate?

throwaway1967 11y ago
> what is a unionized taxi driver to do in this kind of political and economic climate? Do the moral thing and step-down from their monopolies, and embrace competition. Why do you care about immoral people? Those who benefit from monopolies are not above robbers who benefit from a temporary monopoly on violence to bilk their victims. EDIT: response to ishw (since my posts are being delayed): The drivers that took credit in order to benefit from an immoral monopoly subsidized by tax-payers had it coming. Public libraries are available and anyone can learn where this road leads by picking up Economics in One Lesson which is eminently readable and widely available. This is like saying "this gang of robbers paid the government X dollars backed by credit for the right to rob, and we can't put those robbers in a position of defaulting on their now-worthless license to rob". Uhm, yes we can, because the "medallion" they bought is precisely the instrument that makes it illegal for everyone else to compete with them. In other words, a criminal is not exempt from their crime just because they purchased the instrument, that enabled them to commit the crime, with credit. When you say "Taking the moral highroad is not an option here", therefore, that's just a misinformed reaction to a situation that, as you correctly noted, allows for no way out that isn't harmful to one or both parties. Which is why this sort of engagement (monopolistic or monopsonistic) is to be discouraged and why only voluntary contracts should be enforced by Law. EDIT: response to mbreese: Wow... your response is a complete non-sequitur to what I said.
- ihsw 11y ago
  The article mentions most medallions are backed by credit -- that would mean the drivers would be put in a position of defaulting on their now-worthless medallions. Such investments would destroy their financial prospects for the near future if not in the long term due to the exorbitant cost associated with holding medallions. Taking the moral highroad is not an option here. It's easy to advocate the free market from afar, but not everybody is prepared to even begin participating in the free market due to being financially shackled. I was going to suggest that Uber operate a program of financial assistance to taxi drivers looking to flee the credit-subsidized catastrophe bearing down on them in exchange for multi-year employment contracts, but the collective value of these medallions is estimated at $10 Billion. Yes, ten billion USD. How would such a program work? Could it work?
  - aikah 11y ago
    > The article mentions most medallions are backed by credit -- that would mean the drivers would be put in a position of defaulting on their now-worthless medallions. A medallion buy-back is the only fair solution (for individuals, not for taxi companies). So there should be some kind of compensation so we can all get out of that system, system the local legislator created. But it shouldn't be up to Uber to pay, no matter how I dislike Uber, they didn't create the problem. The whole "free but paid because of scarcity" medallion fiasco is the real cost of corruption, and tax payers always foot the bill sooner or later in these case.
  - bcoates 11y ago
    The drivers don't generally personally own the medallions. The medallions are owned by companies who mortgage them to banks. The medallion collapse means these companies almost certainly have negative value, and if the owner isn't making enough money from it they'll just walk away. The bank will then have to legally recognize what is already obvious (that the loan on the medallion will not be paid as agreed, and the collateral is worthless). The bank may have to call in insurance and some bank customers may take some losses. $10 billion isn't going to break the bank insurance industry. What about the drivers? They've already been fired, that's why the cabs are sitting idle. There's no need to help the financial speculators.
creeble 11y ago
"what is a unionized taxi driver to do in this kind of political and economic climate?" Start driving for Uber? And try and organize a union there?
- serge2k 11y ago
  oh but you are a contractor then.

msandford 11y ago

That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee that they will continue to act a certain way in the future. Spectrum auctions could be considered similarly. One day the government could decide to auction off tons more spectrum, devaluing the existing licenses. It'd suck that they did that, and that in hindsight you paid too much for what you got, but that's just the way it works.

x1798DE 11y ago
It would suck for existing spectrum holders, but not for the spectrum consumers. The same thing happens with any commodities, anyway. If I just bought a diamond mine and they discover a massive vein of new diamonds in an easily accessible place, that sucks just the same.
- gadrfgaesgysd 11y ago
  Ironically the diamond industry is controlled by a few large companies inflating the price by artificially restricting availability.
6stringmerc 11y ago
Or, in the case of Copyrights, a government granted asset can be an entire business model, and when efficient at making money, the industry becomes a force that can strong arm the government to further its interests at home (Copyright term extensions) and abroad (SOPA/TPP).
hackuser 11y ago
> That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee that they will continue to act a certain way in the future. I see that problem with any asset; 'past performance is no guarantee ...'. And one reason any asset can be unpredictable is the behavior of actors on which it depends; for example, if Apple changes the rules or features for the next version of iOS, your app might not be viable anymore. I don't see government as a special case.

wehadfun 11y ago

Does Uber pay fees to the Taxi Limo Commission?

bbanyc 11y ago
Yes. In NYC Uber is a licensed car service like Carmel and Dial7.

wehadfun 11y ago

Could a maddalion holder accept Uber rides as well?

grecy 11y ago

It will be interesting to see if this pushes any traditional cab companies to become their own "mini Uber". i.e. sell all their medallions, get rid of all their regulations and expense overhead, and just operate all their drivers like Uber operate theirs. At which point competing should be easy enough. I think we're at a very interesting point in the Developed world - in the 80s, 90s and 00s everything about our society became more and more regulated and safety conscious (hotels, taxis, health care, education) meaning costs skyrocketed, and the cost of entry to compete in those markets became astronomical. Now we're using technology to go back to way things used to be - less regulation, less rules, (arguably) less safety. Spend some time in the Developing world and you'll see their society still works like this - people will let you stay in their house for a few bucks a night (airbnb), people buy minivans then drive around picking people up for a fee (uber), etc. etc. It's interesting we had to use technology to go back to the way things used to be in these areas. I'm looking forward to seeing the uber/airbnb equivalent for education, healthcare, energy, etc.

toomuchtodo 11y ago
> I'm looking forward to seeing the uber/airbnb equivalent for education, healthcare, energy, etc. The total disregard for laws and regulations? Exciting. Fingers crossed Uber burns up it VC money sooner than later. It's pretty terrible when people on HN pine for the days of less developed countries (no worker protections, no labor/safety regulations).
- grecy 11y ago
  > It's pretty terrible when people on HN pine for the days of less developed countries (no worker protections, no labor/safety regulations). The Developed World can not continue with it's standard of living, it's simply not sustainable. Something has to give. The way I see it, services like Uber and airbnb can slowly chip it down to something sustainable, or we can hold onto it until the bitter end when it all comes crashing down. Also, just because a job is offered with no worker protections, no labor/safety regulations etc, it doesn't mean a person has to take it. People vote through their actions.

andrei512 11y ago

In Romania most taxi companies have their own app. This change started about 3 years ago.

username3 11y ago
How's Uber doing in Romania?

6stringmerc 11y ago

Hm, I'm both impressed and a little cockeyed at the ruling by regulators that e-hails are "pre-arranged travel" for the purpose of defining the service and noting its exemption from needing a medallion. Oh I get it - that's clearly a distinction to hammer home for the benefit of Uber. As the article points out, one of the competitive advantages Uber has is the rapid pace of pickups in Manhattan - within two minutes. Quite a remarkable achievement in getting the efficiency of "pre-arranged travel" down to less than 120 seconds. I wonder what the conversations around Melrose Credit Union were like when they decided to, metaphorically speaking, put all their eggs in one basket.

arantius 11y ago
It's not about amount of time, it's order of operations. Taxi: already on the street, driving around, I try to get flag one down by essentially luck. Pre-arranged: I contact you, tell you where I am, you specifically set out to pick me up. Pre-arranged is exactly how traditional car services have always worked. The fact that improved technology means pre-arranged also can be fast is a good thing.

nzoschke 11y ago

In SF I always use Uber over taxis for the better experience of hailing and paying for a ride. But within the last year I notice every day how bad Uber drivers are severely affecting the city for the worse. So many uber drivers don't know how to safely park to pick up or drop off passengers without blocking traffic. Drivers don't know the fastest or safest routes to get around with other drivers, busses, cyclists, pedestrians and construction. I don't want to see Uber regulated to hell, but I would like to see features of taxis required for drivers like signs on top of the cars indicating cars for hire, and most importantly lots more training about road safety.

_-__--- 11y ago
There is potential for uber infrastructure to self-regulate - continuously giving bad ratings to bad drivers will see them reprimanded in some fashion (I imagine). I've had (mostly) good experiences here in Boston/Cambridge; any bad experiences I've had have been documented with 1 to 2 stars and a quick explanation as to why. I admit that I have no idea how the reprimanding of drivers of the handling of bad customer reviews is performed by Uber. Hopefully it's done in an honest way.
- bbreier 11y ago
  This is just hearsay, but I was told there is basically a minimum rating and if they drop below it for any meaningful amount of time they are fired.
  - jasonlotito 11y ago
    How can I report an Uber driver who is not my driver?

amelius 11y ago

So how much does it pay to be an Ueber driver anyway? Just curious. PS: Über without the umlaut is spelled Ueber. [1] [1] https://en.wikipedia.org/wiki/%C3%9C https://en.wikipedia.org/wiki/%C3%9C

tarpherder 11y ago
Company name, unfortunately, is "Uber". Not "Über".
- SilasX 11y ago
  Yeah, that's always been a real head-scratcher for me. I see the umlaut in maybe every third reference to the company, and yet they never used it in any official capacity! Worst case of hypercorrection I've ever seen.

brightball 11y ago

Taking a libertarian perspective here, the problem isn't Uber. The problem is that the government tried to artificially limit the supply of cabs with medallions, leading to entrenchment, lack of competition and no urgency to innovate within the industry. So innovation came from outside and it's blowing the whole thing up.

serge2k 11y ago

Sad thing is, it really shouldn't be that hard for them to compete with Uber. It's a customer service issue. * Don't make me wait huge amounts of time, especially without telling me. * Any driver who whines about taking a damn credit card should be fired immediately. Ugh. * Start treating customers well. Uber is hit or miss with this. Far too often I call for a cab and stand around waiting for 40 minutes, then get someone who drives like a maniac and is incredibly rude, and then when I say I need to pay be credit card they whine and cry and outright lie to try to get cash instead.

davidf18 11y ago

As a New Yorker, I am very pleased with the decision. The reason why the taxis are not being used is not because of Uber but rather because the taxi prices are set too high. The way to fix the problem is for the NY City Taxi Commission to lower the taxi fares. With lower fares, more people will take taxis, especially now that there is the new "Arro" app that allows for e-hail of taxis. Lower the prices, and more taxis will be in use. Simple economics!