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>The license costs $550, according to the TLC website. After getting a license, a driver needs to get their van insured, which can cost around $15,000 a year, C

>The license costs $550, according to the TLC website. After getting a license, a driver needs to get their van insured, which can cost around $15,000 a year, Clarke and several van drivers told the Eagle. Well no wonder there's many unlicensed vans. They way the incentives are set up they may as well print "don't even bother" at the top of the license form in big bold letters. With those kinds of costs in addition to the cost of running the van you'd be making pennies. Run unlicensed and on normal insurance (or better yet, read the statutes and figure out where the risk/reward sweet spot is) and you'd save a ton of money. If you don't have a lot of money or a legitimate business that needs protecting then it's a no brainier. Edit: Down-voting me won't make running above the table any more financially attractive. If the insurance made financial sense the state wouldn't need to force them to get it or at the very least it would not be the owner's primary gripe. Most small businesses love to advertise their credentials and how insured they are. Every other business complains about labor cost and regulation. These guys are complaining about insurance. That should be a massive tip off that something is wrong.

close04 7y ago
The costs of running a commercial service are always higher. Between insurance, licensing, generally stricter rules on technical aspects (like periodic service checks, etc.) you start spending a lot. The liability is a lot higher for these cases. This is exactly why Uber went the route of "we're just a tech company even the drivers are basically driving taxis". Having those drivers conform to the same rules would have made the fare just as expensive as a taxi fare.
- i_am_proteus 7y ago
  But should the costs be higher? So much of these costs are protectionist measures implemented by government to protect the interests of established businesses. To borrow a turn of phrase from the gun rights camp, business licenses, if they exist at all, should be low-cost and shall-issue.
  - mikeash 7y ago
    So much of them are necessary measures to protect people, though. The trouble is distinguishing the two. For example, medallions are obviously and pretty explicitly a protectionist measure. On the other hand requirements to display fares clearly and use an approved meter are there to help customers from being ripped off.
    - devdas 7y ago
      Medallions protect against the negative of there being too many taxis, causing congestion and revenue loss for drivers, which would lead to more dangerous driving and poorly maintained vehicles.
  - TulliusCicero 7y ago
    Are they? In the quote at least, the vastly bigger expense is insurance, which is likely provided by the market based on statistics of some kind, not some arbitrary number from the government.
    - dsfyu404ed 7y ago
      Yes, but "the market" has figured out that you can sue the pants off an insured business whereas an uninsured business is not worth paying a lawyer to go after. Just carrying the insurance makes you a higher risk of costing the insurance company money by itself. If insurance made financial sense to carry for the average or averagely unlucky operator the state wouldn't need to make it mandatory and drivers wouldn't grumble about it or at the very least it wouldn't be their primary gripe. They'd gripe about labor costs and labor laws like every other business does.
      - ceejayoz 7y ago
        > Just carrying the insurance makes you a higher risk of costing the insurance company money by itself. Insurance companies aren't typically run as charities. > If insurance made financial sense to carry for the average or averagely unlucky operator the state wouldn't need to make it mandatory... The state is worried about the damage they can potentially cause to others. Their employees, their customers, innocent pedestrians, buildings. > They'd gripe about labor costs and labor laws like every other business does. That seems unlikely, considering the drivers are largely independent contractors. They don't tend to complain about labor costs, as they call them "profits".
- deleted 7y ago
  [deleted]
- roywiggins 7y ago
  NYC ubers have always been licensed by the NYC taxi regulators, not as taxis, but they are regulated quite aggressively.
  - chimeracoder 7y ago
    > NYC ubers have always been licensed by the NYC taxi regulators, not as taxis, but they are regulated quite aggressively. They are taxis - they're a separate class of taxis from the yellow taxis, but they are considered taxis (and regulated by the Taxi and Limousine Commission).
    - roywiggins 7y ago
      Right, I just mean that they're regulated like for-hire "black cars", which are regulated by the TLC, just not under the medallion system that yellow cabs are
- gnopgnip 7y ago
  With fleet maintenance, and other economies of scale it can be cheaper to meet those standards
ceejayoz 7y ago
That expensive insurance covers the fact that it's getting substantially more mileage (and thus risk) than a personal-use vehicle, and that ~20 people could be injured or killed in an accident. There's a reason it's required.
pkaye 7y ago
I vaguely remember a news article while back a taxi organization in the city had self insured its drivers and one bad accident has enough claims to bankrupt the entire organization. Edit: here is the article. They were found liable for $8M for paralyzing a passenger. A chicago company was liable for $26M in another case. https://money.cnn.com/2016/01/25/technology/yellow-cab-bankruptcy/index.html https://money.cnn.com/2016/01/25/technology/yellow-cab-bankr...
HillaryBriss 7y ago
> Well no wonder there's many unlicensed vans. Practically and economically, yes, it makes sense. No wonder, indeed. But I find it really sad that the government fails to simply enforce the insurance requirement. These vans are an important part of the transportation solution for many people and the government is failing to protect these riders. Regulation defiant buses are rewarded and regulation compliant buses are penalized.

close04 7y ago

The costs of running a commercial service are always higher. Between insurance, licensing, generally stricter rules on technical aspects (like periodic service checks, etc.) you start spending a lot. The liability is a lot higher for these cases. This is exactly why Uber went the route of "we're just a tech company even the drivers are basically driving taxis". Having those drivers conform to the same rules would have made the fare just as expensive as a taxi fare.

i_am_proteus 7y ago
But should the costs be higher? So much of these costs are protectionist measures implemented by government to protect the interests of established businesses. To borrow a turn of phrase from the gun rights camp, business licenses, if they exist at all, should be low-cost and shall-issue.
- mikeash 7y ago
  So much of them are necessary measures to protect people, though. The trouble is distinguishing the two. For example, medallions are obviously and pretty explicitly a protectionist measure. On the other hand requirements to display fares clearly and use an approved meter are there to help customers from being ripped off.
  - devdas 7y ago
    Medallions protect against the negative of there being too many taxis, causing congestion and revenue loss for drivers, which would lead to more dangerous driving and poorly maintained vehicles.
- TulliusCicero 7y ago
  Are they? In the quote at least, the vastly bigger expense is insurance, which is likely provided by the market based on statistics of some kind, not some arbitrary number from the government.
  - dsfyu404ed 7y ago
    Yes, but "the market" has figured out that you can sue the pants off an insured business whereas an uninsured business is not worth paying a lawyer to go after. Just carrying the insurance makes you a higher risk of costing the insurance company money by itself. If insurance made financial sense to carry for the average or averagely unlucky operator the state wouldn't need to make it mandatory and drivers wouldn't grumble about it or at the very least it wouldn't be their primary gripe. They'd gripe about labor costs and labor laws like every other business does.
    - ceejayoz 7y ago
      > Just carrying the insurance makes you a higher risk of costing the insurance company money by itself. Insurance companies aren't typically run as charities. > If insurance made financial sense to carry for the average or averagely unlucky operator the state wouldn't need to make it mandatory... The state is worried about the damage they can potentially cause to others. Their employees, their customers, innocent pedestrians, buildings. > They'd gripe about labor costs and labor laws like every other business does. That seems unlikely, considering the drivers are largely independent contractors. They don't tend to complain about labor costs, as they call them "profits".
deleted 7y ago
[deleted]
roywiggins 7y ago
NYC ubers have always been licensed by the NYC taxi regulators, not as taxis, but they are regulated quite aggressively.
- chimeracoder 7y ago
  > NYC ubers have always been licensed by the NYC taxi regulators, not as taxis, but they are regulated quite aggressively. They are taxis - they're a separate class of taxis from the yellow taxis, but they are considered taxis (and regulated by the Taxi and Limousine Commission).
  - roywiggins 7y ago
    Right, I just mean that they're regulated like for-hire "black cars", which are regulated by the TLC, just not under the medallion system that yellow cabs are
gnopgnip 7y ago
With fleet maintenance, and other economies of scale it can be cheaper to meet those standards

ceejayoz 7y ago

That expensive insurance covers the fact that it's getting substantially more mileage (and thus risk) than a personal-use vehicle, and that ~20 people could be injured or killed in an accident. There's a reason it's required.

pkaye 7y ago

I vaguely remember a news article while back a taxi organization in the city had self insured its drivers and one bad accident has enough claims to bankrupt the entire organization. Edit: here is the article. They were found liable for $8M for paralyzing a passenger. A chicago company was liable for $26M in another case. https://money.cnn.com/2016/01/25/technology/yellow-cab-bankruptcy/index.html https://money.cnn.com/2016/01/25/technology/yellow-cab-bankr...

HillaryBriss 7y ago

> Well no wonder there's many unlicensed vans. Practically and economically, yes, it makes sense. No wonder, indeed. But I find it really sad that the government fails to simply enforce the insurance requirement. These vans are an important part of the transportation solution for many people and the government is failing to protect these riders. Regulation defiant buses are rewarded and regulation compliant buses are penalized.