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>Going through more than 10 years worth of NYC taxi data, I analyse how the antiquated meter system impacts the livelihood of NYC cabbies by drawing an analogy

>Going through more than 10 years worth of NYC taxi data, I analyse how the antiquated meter system impacts the livelihood of NYC cabbies by drawing an analogy with stock options trading. Interestingly, this approach allows us to show that drivers have progressively been worse-off, independently of competition from Uber. The author ignores significant issues with the data. These include time of day, where time-specific surcharges increase the fare independent of distance or time spent in the taxi. The author also ignores the shift system for fleet cabs. As a general rule, fleet cabs operate two twelve hour shifts, with the day shift generally being less lucrative than the night shift. What's more, the author ignores the fact that Thursday evening through Sunday morning are significantly more lucrative than the rest of the week. If you ignore the above and just average everything together, you'll miss important differentiators in revenue. I get that the author normalized the data to enable his analysis of revenue. But given that he ignores important variables makes the results suspect. Many drivers only drive at night. Many drivers only drive during the day. Some drivers only drive Thursday-Sunday. Some only drive Monday-Friday. So a Monday-Friday day shift driver will generate less revenue than an Monday-Friday night shift driver. Similarly, a Wednesday-Sunday day shift driver will generate less revenue than a night shift driver. And those who work Wednesday-Sunday will generate more revenue than those who work Monday-Friday. And the author focuses only on the revenue side and ignores the costs. The last time I checked, a day shift lease is ~$95+full tank of gas, while a night shift lease is ~$120+full tank of gas, with a premium charged Thursday-Sunday. However, there are other kinds of leases as well. A weekly lease, generally shared by two drivers, will run ~$900-$1000 split between them. And a monthly lease can be even more cost-effective. And those leases include maintenance on the vehicle, insurance and vehicle storage. While it's interesting to see the analysis of how the fee structure generates revenue, the author ignores a whole raft of other variables which directly impact on revenue generation. Lastly, the author asserts that it's the "antiquated" taxi meter fee structure that has caused drivers to be "progressively worse-off." I don't see how he was able to draw that conclusion from the data presented. Edit: Fixed typos and edited for clarity

howlgarnish 6y ago
All the factors you cite impact driver earnings, but do they impact the analysis? At the end of the day the argument boils down to "drivers make more money when they can drive faster", which seems pretty indisputable. So if overall traffic speeds are slowing down, then in aggregate all drivers will suffer as well, although the daytime driver suffering through rush hour gridlock will be comparatively worse off than a driver who focuses on long airport rides in the middle of the night. As for the taxi meter fee structure, Uber/Lyft can work around this with surge fees during those congested peak hours, while taxis cannot. This too is quite clearly in the Uber drivers' favor: if you're going to be sitting around in traffic, better to be paid more for it. (Unless Uber takes all the extra revenue for themselves, but that's another story.)
- nobody9999 6y ago
  >All the factors you cite impact driver earnings, but do they impact the analysis? Probably not. However, if the analysis doesn't provide enough nuance WRT revenue generation, how useful is that analysis, except as a primer on using those particular techniques in a novel fashion? >At the end of the day the argument boils down to "drivers make more money when they can drive faster", which seems pretty indisputable. Absolutely a fair point, although ignoring the time-based variations in the demand curve likely has a measurable effect on revenue generation. To illustrate that point, during the pandemic, overall traffic volumes are down at least 50%, presumably allowing even day time drivers to drive faster. However, some estimates of taxi driver revenue have it down 80+%. Even more, traffic lights on one-way avenues (at least in Manhattan, where the bulk of medallion taxis operate) are generally set at slightly less than 25 miles/hour (the citywide default speed limit), so "driving faster = making more money" isn't really correct. "Driving faster than 12 miles per hour usually results in higher revenue" is probably more accurate. >So if overall traffic speeds are slowing down, then in aggregate all drivers will suffer as well, although the daytime driver suffering through rush hour gridlock will be comparatively worse off than a driver who focuses on long airport rides in the middle of the night. That absolutely applies to day time drivers, and night-time drivers can (and usually do) generate more revenue. However, some of that difference is unrelated to speed. Rather it's related to demand. Because people know that traffic is bad during the day makes them less likely to use a taxi during the day and more likely to do so at night. However, your example of airport rides is flawed, as rides between airports/Manhattan are a flat fare and not based on time and distance. I don't use Uber or other FHV services, mainly because I find their business model offensive, given the huge fees they charge are way out of proportion to the services they provide -- and that's fundamentally unfair to the drivers. Which is also why I always pay cash when using a taxi, as there's usually a fee of at least 5% on credit card transactions in the taxi, and drivers often don't receive their money for days -- yet the fleet owners require up-front payment for leases, and the drivers must fill the gas tank before returning the car.
willyg123 6y ago
>Some drivers only drive Thursday-Sunday. Some only drive Monday-Friday. I lived in NYC prior to Uber and when Uber was first making inroads (for 9 years until 2016, so this totally could have changed since). Often, I'd chat with the driver to pass time/reduce awkwardness. A common complaint was drivers being required to lease a cab for a full-week for 12 hours each day. >As a general rule, fleet cabs operate two twelve hour shifts, with the day shift generally being less lucrative than the night shift. Taxi shifts are scheduled and designed so each shift is equally attractive, so that each shift gets a rush hour [1]. As an aside, as someone who works on the software side of the options trading business, I found the article to be quite interesting. [1] https://www.nytimes.com/2011/01/12/nyregion/12taxi.html https://www.nytimes.com/2011/01/12/nyregion/12taxi.html
nemo44x 6y ago
Wow, $120 for a premium shift today is so much cheaper than 10 years ago. I could be wrong but I remember reading back then cabbies we’re paying around $220 and in some cases not even getting a cab to drive as they were all taken. That market really changed from a sellers to a buyers over the years.
- nobody9999 6y ago
  >Wow, $120 for a premium shift today is so much cheaper than 10 years ago. I could be wrong but I remember reading back then cabbies we’re paying around $220 and in some cases not even getting a cab to drive as they were all taken. Note that I didn't say it was $120 for a premium lease, I said $120 for a night shift lease Sunday-Wednesday, with premiums on top of that for Thursday-Saturday nights. What's more, the Taxi and Limousine Commission (TLC) that regulates Taxis and For Hire Vehicles (FHV), has capped the maximum lease rates, since every time the fares increased, fleet owners would raise lease rates to take almost all the additional revenue. I'm not claiming that folks make lots of money driving medallion taxis in NYC (in fact, the bottom has pretty much dropped out during the pandemic). Rather I don't think that the analysis in the article is nuanced enough to make any comparisons with Uber/Lyft and other FHV drivers. [0] https://www.nycitycab.com/Business/FleetTaxisforleaseList.aspx https://www.nycitycab.com/Business/FleetTaxisforleaseList.as...

howlgarnish 6y ago

All the factors you cite impact driver earnings, but do they impact the analysis? At the end of the day the argument boils down to "drivers make more money when they can drive faster", which seems pretty indisputable. So if overall traffic speeds are slowing down, then in aggregate all drivers will suffer as well, although the daytime driver suffering through rush hour gridlock will be comparatively worse off than a driver who focuses on long airport rides in the middle of the night. As for the taxi meter fee structure, Uber/Lyft can work around this with surge fees during those congested peak hours, while taxis cannot. This too is quite clearly in the Uber drivers' favor: if you're going to be sitting around in traffic, better to be paid more for it. (Unless Uber takes all the extra revenue for themselves, but that's another story.)

nobody9999 6y ago
>All the factors you cite impact driver earnings, but do they impact the analysis? Probably not. However, if the analysis doesn't provide enough nuance WRT revenue generation, how useful is that analysis, except as a primer on using those particular techniques in a novel fashion? >At the end of the day the argument boils down to "drivers make more money when they can drive faster", which seems pretty indisputable. Absolutely a fair point, although ignoring the time-based variations in the demand curve likely has a measurable effect on revenue generation. To illustrate that point, during the pandemic, overall traffic volumes are down at least 50%, presumably allowing even day time drivers to drive faster. However, some estimates of taxi driver revenue have it down 80+%. Even more, traffic lights on one-way avenues (at least in Manhattan, where the bulk of medallion taxis operate) are generally set at slightly less than 25 miles/hour (the citywide default speed limit), so "driving faster = making more money" isn't really correct. "Driving faster than 12 miles per hour usually results in higher revenue" is probably more accurate. >So if overall traffic speeds are slowing down, then in aggregate all drivers will suffer as well, although the daytime driver suffering through rush hour gridlock will be comparatively worse off than a driver who focuses on long airport rides in the middle of the night. That absolutely applies to day time drivers, and night-time drivers can (and usually do) generate more revenue. However, some of that difference is unrelated to speed. Rather it's related to demand. Because people know that traffic is bad during the day makes them less likely to use a taxi during the day and more likely to do so at night. However, your example of airport rides is flawed, as rides between airports/Manhattan are a flat fare and not based on time and distance. I don't use Uber or other FHV services, mainly because I find their business model offensive, given the huge fees they charge are way out of proportion to the services they provide -- and that's fundamentally unfair to the drivers. Which is also why I always pay cash when using a taxi, as there's usually a fee of at least 5% on credit card transactions in the taxi, and drivers often don't receive their money for days -- yet the fleet owners require up-front payment for leases, and the drivers must fill the gas tank before returning the car.

willyg123 6y ago

>Some drivers only drive Thursday-Sunday. Some only drive Monday-Friday. I lived in NYC prior to Uber and when Uber was first making inroads (for 9 years until 2016, so this totally could have changed since). Often, I'd chat with the driver to pass time/reduce awkwardness. A common complaint was drivers being required to lease a cab for a full-week for 12 hours each day. >As a general rule, fleet cabs operate two twelve hour shifts, with the day shift generally being less lucrative than the night shift. Taxi shifts are scheduled and designed so each shift is equally attractive, so that each shift gets a rush hour [1]. As an aside, as someone who works on the software side of the options trading business, I found the article to be quite interesting. [1] https://www.nytimes.com/2011/01/12/nyregion/12taxi.html https://www.nytimes.com/2011/01/12/nyregion/12taxi.html

nemo44x 6y ago

Wow, $120 for a premium shift today is so much cheaper than 10 years ago. I could be wrong but I remember reading back then cabbies we’re paying around $220 and in some cases not even getting a cab to drive as they were all taken. That market really changed from a sellers to a buyers over the years.

nobody9999 6y ago
>Wow, $120 for a premium shift today is so much cheaper than 10 years ago. I could be wrong but I remember reading back then cabbies we’re paying around $220 and in some cases not even getting a cab to drive as they were all taken. Note that I didn't say it was $120 for a premium lease, I said $120 for a night shift lease Sunday-Wednesday, with premiums on top of that for Thursday-Saturday nights. What's more, the Taxi and Limousine Commission (TLC) that regulates Taxis and For Hire Vehicles (FHV), has capped the maximum lease rates, since every time the fares increased, fleet owners would raise lease rates to take almost all the additional revenue. I'm not claiming that folks make lots of money driving medallion taxis in NYC (in fact, the bottom has pretty much dropped out during the pandemic). Rather I don't think that the analysis in the article is nuanced enough to make any comparisons with Uber/Lyft and other FHV drivers. [0] https://www.nycitycab.com/Business/FleetTaxisforleaseList.aspx https://www.nycitycab.com/Business/FleetTaxisforleaseList.as...