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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

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.

tw04 9y ago
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.
- weberc2 9y ago
  Well, besides completely strip their incentive to innovate or otherwise provide more than a marginally useful service...
- nserrino 9y ago
  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.
- neom 9y ago
  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.
- wutbrodo 9y ago
  > 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.
  - CydeWeys 9y ago
    > 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.
    - wutbrodo 9y ago
Shivetya 9y ago
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.
- nserrino 9y ago
  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.
- TheCoelacanth 9y ago
  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.
thephyber 9y ago
> 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/episode-643-the-taxi-king http://www.npr.org/sections/money/2015/07/31/428157211/episo...
- jlebar 9y ago
  > 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.
agotterer 9y ago
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.
- spydum 9y ago
  It's worse than just pricing.. I've had several taxis "pretend" their meter stopped working, to try to scam a cash ride.
  - pavel_lishin 9y ago
    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.
    - agotterer 9y ago
      It is a problem if you the passenger don't know if you are being ripped off and are paying a reasonable fare.
    - deleted 9y ago
      [deleted]
- monksy 9y ago
  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)
- DrScump 9y ago
tmh79 9y ago
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.
- stbtrax 9y ago
  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.

tw04 9y ago

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.

weberc2 9y ago
Well, besides completely strip their incentive to innovate or otherwise provide more than a marginally useful service...
nserrino 9y ago
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.
neom 9y ago
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.
wutbrodo 9y ago
> 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.
- CydeWeys 9y ago
  > 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.
  - wutbrodo 9y ago

Shivetya 9y ago

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.

nserrino 9y ago
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.
TheCoelacanth 9y ago
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.

thephyber 9y ago

> 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/episode-643-the-taxi-king http://www.npr.org/sections/money/2015/07/31/428157211/episo...

jlebar 9y ago
> 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.

agotterer 9y ago

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.

spydum 9y ago
It's worse than just pricing.. I've had several taxis "pretend" their meter stopped working, to try to scam a cash ride.
- pavel_lishin 9y ago
  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.
  - agotterer 9y ago
    It is a problem if you the passenger don't know if you are being ripped off and are paying a reasonable fare.
  - deleted 9y ago
    [deleted]
monksy 9y ago
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)
DrScump 9y ago

tmh79 9y ago

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.

stbtrax 9y ago
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.