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>> The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because

>> The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business. This is certainly NOT the case in NYC where I live. Artificial scarcity of taxis was created by the city government by limiting the number of medallions to 13,000 and as a result, taxi medallions had cost $1.2 million. Much of taxi fare went to paying for those $1.2 million medallions. Uber has offered lower fees, offers greener rides and lower still fees through Uber pool where passengers share an Uber than the taxi industry with a rating system so that you know if you are getting a good driver. Now those $1.2 million medallions are worth about $700K and many taxis are now not in use and the taxi companies are declaring bankruptcy. It is possible that if the government had not created the artificial scarcity by limiting medallions Uber may not have gained traction.

sharemywin 11y ago
So, what stops NYC from taxing Uber? That $15 billion is going to have to come from somewhere.
- bydo 11y ago
  The money already came from the sale of the medallions. It isn't a yearly fee, which is good, since at 150m taxi rides per year, that would increase the price of each ride by at least $100. Though medallion sales also aren't worth anything near $15b, anyway -- the 1.2m figure is what medallion sales peaked at. Most sold for significantly less in the past. Normally very few new medallions come up for auction; the city knows their value is in their scarcity. Though the current budget[1] accounts for some $400m per year from medallion sales, mostly from the continuing rollout of green/boro cabs, which, if coming from the rest of the system instead, would still be a pretty significant fare hike per ride. 1: http://council.nyc.gov/downloads/pdf/budget/2015/taxi.pdf http://council.nyc.gov/downloads/pdf/budget/2015/taxi.pdf
  - sharemywin 11y ago
    they'll probably institute some kind of tax that if you have a medallion you don't have to pay. Since all the Uber data goes through the internet all the transactions can be tracked and taxed.
- JoshTriplett 11y ago
  > That $15 billion is going to have to come from somewhere. While governments may tend to think that way, it's ridiculous to assume that once they have a source of revenue it must never go away. That $15 billion could just go away. More to the point, they already don't currently derive that level of revenue from taxi medallions; those medallions have already been sold. So the only question is whether they try to invent a new source of revenue by adding targeted taxes on something that isn't currently subject to targeted taxes.

sharemywin 11y ago

So, what stops NYC from taxing Uber? That $15 billion is going to have to come from somewhere.

bydo 11y ago
The money already came from the sale of the medallions. It isn't a yearly fee, which is good, since at 150m taxi rides per year, that would increase the price of each ride by at least $100. Though medallion sales also aren't worth anything near $15b, anyway -- the 1.2m figure is what medallion sales peaked at. Most sold for significantly less in the past. Normally very few new medallions come up for auction; the city knows their value is in their scarcity. Though the current budget[1] accounts for some $400m per year from medallion sales, mostly from the continuing rollout of green/boro cabs, which, if coming from the rest of the system instead, would still be a pretty significant fare hike per ride. 1: http://council.nyc.gov/downloads/pdf/budget/2015/taxi.pdf http://council.nyc.gov/downloads/pdf/budget/2015/taxi.pdf
- sharemywin 11y ago
  they'll probably institute some kind of tax that if you have a medallion you don't have to pay. Since all the Uber data goes through the internet all the transactions can be tracked and taxed.
JoshTriplett 11y ago
> That $15 billion is going to have to come from somewhere. While governments may tend to think that way, it's ridiculous to assume that once they have a source of revenue it must never go away. That $15 billion could just go away. More to the point, they already don't currently derive that level of revenue from taxi medallions; those medallions have already been sold. So the only question is whether they try to invent a new source of revenue by adding targeted taxes on something that isn't currently subject to targeted taxes.