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Sydney taxis are extortionate and often operate illegally around the airport, but also taxi plates in Australia costed $100,000’s (on the market, not sure how m

Sydney taxis are extortionate and often operate illegally around the airport, but also taxi plates in Australia costed $100,000’s (on the market, not sure how much when released by the government) and that investment got trashed by ride-share entry. From that perspective I’ve got some sympathy.

willcipriano 3y ago
Taxi companies lobby for very expensive taxi registration to raise barrier to entry and prevent competition. Someone finds a way around this malfeasance. "Hey you gotta pay us for lost income, we spent a lot on those taxi medallions!"
bigDinosaur 3y ago
Why should we have sympathy because of an artificial constraint on the supply of taxi drivers? They're really nothing special except by being in an artificially protected market.
araes 3y ago
The article said they cost $500,000 (each), which was probably the least believable part of the article. If they actually cost $100,000, that might be close to reasonable. Somebody can probably do 5-6 rides a day at $50 a ride for a $100,000 tag. That's pretty believable for an average over a year. Even $200,000 might be. I have difficultly believing they're all making money needing 30 rides at ~$50 every day all year long for a $500,000 tag. > value of his three taxi licence plates – worth about $500,000 each.
- Atotalnoob 3y ago
  I would believe the 500k number. Taxi badges are ridiculously priced. I think NYC’s was over 1.5m. Keep in mind, they are able to lease the badge out, so you can have your cab running 24/7.
- StackRanker3000 3y ago
  Why are you assuming it must necessarily be paid for in the first year? Are they not keeping these plates indefinitely, unless sold?
  - araes 3y ago
    Guess because I thought that Australia would not put a huge up-front cost on starting a taxi service (and I'm now numb to Australian prices and numbers looking nonsensical from America. If the rents are in the $1000/wk, plane tickets are $5000, start losing track of "reasonable". It's Australia, multiply the normal price 5x-10x).
- mrgoldenbrown 3y ago
  In Boston they peaked at selling for well over 500k. Your math assume drivers purchase them, but most drivers here would lease them.
- rstuart4133 3y ago
  You should believe it. They reach a high of $450,000 in 2014 dollars, so well over $500,000 now: https://www.smh.com.au/national/nsw/cost-of-buying-a-taxi-licence-in-sydney-drops-to-lowest-in-six-years-20141213-126fzp.html https://www.smh.com.au/national/nsw/cost-of-buying-a-taxi-li... They were at that price because of artificial scarcity. They created a tidy income stream for the governments who sold them, who found by limiting supply the prices when auction rose spectacularly. The net result was not enough taxi's to fill natural demand, while taxi drivers paid to delivery an artificially limited service were paid stuff all. This wasn't unique to Sydney - the model was repeated all over the world; they just copied it. It created the perfect environment for Uber to step into. Because it was copied everywhere it was a huge, worldwide market. To exploit it Uber had to knowingly break the law, and lie about it. You can see that reflected in Uber's highly criticised internal culture at the time. The governments and taxi drivers fought Uber tooth and nail. Where I live taxi inspectors booking rides with Uber, and fining the drivers for not having a licence. Uber responded with technology, using their apps to track their phones and modify what they saw. The inspectors saw no Uber drivers around. It was open warfare for a while, technology vs the law. Technology won in that case. Uber's "it's all about me, whatever it takes to win" culture was probably a necessary part of that victory. Now the war has been won I see Uber is changing it's culture. Here in Australia, the taxi licence owners watched the value of their licences evaporate overnight under Ubers assault. When it became evident the huge debts they took on to finance the licences meant they had no hope of competing against Uber commercially, they sued the government over the inflated prices they were forced to pay. The government responded to the law suit by saying no one forced them, they were sold at auction. The courts largely sided with the governments, perhaps because they have near infinite legal resources and the taxi's were broke. Some governments later did hand some "sorry" payments to the taxi drivers, but there were more token amounts. So the real reason for the enormous pain the taxi's have had to endure (I'm sure it cause financial ruin and suicides) is taxi's licenses were effectively a very poorly implemented tax. When a business discovered how to use new technology to exploit the opportunity created by that tax, it wasn't the drafters of the law who suffered, it was the taxi's. They have my sincere sympathy.
  - araes 3y ago
    Thank you for the rather long explanation that was not especially inflammatory. The original point of the comment was that $500,000 seemed difficult to believe. You at least provide a thorough, if rather Machiavellian explanation. Not sure if I agree on the sympathy, mostly because they probably had $AUS in their eyes initially, seeing the prices other people complain about. However, too far away in America, with too much American shadowbanning filter on all news, to have any relevant view on the issue.
perilunar 3y ago
The NSW government controls the number of taxis and set the fares. I have some sympathy for the drivers, but if anyone should be compensating them it's the government, not Uber.

willcipriano 3y ago

Taxi companies lobby for very expensive taxi registration to raise barrier to entry and prevent competition. Someone finds a way around this malfeasance. "Hey you gotta pay us for lost income, we spent a lot on those taxi medallions!"

bigDinosaur 3y ago

Why should we have sympathy because of an artificial constraint on the supply of taxi drivers? They're really nothing special except by being in an artificially protected market.

araes 3y ago

The article said they cost $500,000 (each), which was probably the least believable part of the article. If they actually cost $100,000, that might be close to reasonable. Somebody can probably do 5-6 rides a day at $50 a ride for a $100,000 tag. That's pretty believable for an average over a year. Even $200,000 might be. I have difficultly believing they're all making money needing 30 rides at ~$50 every day all year long for a $500,000 tag. > value of his three taxi licence plates – worth about $500,000 each.

Atotalnoob 3y ago
I would believe the 500k number. Taxi badges are ridiculously priced. I think NYC’s was over 1.5m. Keep in mind, they are able to lease the badge out, so you can have your cab running 24/7.
StackRanker3000 3y ago
Why are you assuming it must necessarily be paid for in the first year? Are they not keeping these plates indefinitely, unless sold?
- araes 3y ago
  Guess because I thought that Australia would not put a huge up-front cost on starting a taxi service (and I'm now numb to Australian prices and numbers looking nonsensical from America. If the rents are in the $1000/wk, plane tickets are $5000, start losing track of "reasonable". It's Australia, multiply the normal price 5x-10x).
mrgoldenbrown 3y ago
In Boston they peaked at selling for well over 500k. Your math assume drivers purchase them, but most drivers here would lease them.
rstuart4133 3y ago
You should believe it. They reach a high of $450,000 in 2014 dollars, so well over $500,000 now: https://www.smh.com.au/national/nsw/cost-of-buying-a-taxi-licence-in-sydney-drops-to-lowest-in-six-years-20141213-126fzp.html https://www.smh.com.au/national/nsw/cost-of-buying-a-taxi-li... They were at that price because of artificial scarcity. They created a tidy income stream for the governments who sold them, who found by limiting supply the prices when auction rose spectacularly. The net result was not enough taxi's to fill natural demand, while taxi drivers paid to delivery an artificially limited service were paid stuff all. This wasn't unique to Sydney - the model was repeated all over the world; they just copied it. It created the perfect environment for Uber to step into. Because it was copied everywhere it was a huge, worldwide market. To exploit it Uber had to knowingly break the law, and lie about it. You can see that reflected in Uber's highly criticised internal culture at the time. The governments and taxi drivers fought Uber tooth and nail. Where I live taxi inspectors booking rides with Uber, and fining the drivers for not having a licence. Uber responded with technology, using their apps to track their phones and modify what they saw. The inspectors saw no Uber drivers around. It was open warfare for a while, technology vs the law. Technology won in that case. Uber's "it's all about me, whatever it takes to win" culture was probably a necessary part of that victory. Now the war has been won I see Uber is changing it's culture. Here in Australia, the taxi licence owners watched the value of their licences evaporate overnight under Ubers assault. When it became evident the huge debts they took on to finance the licences meant they had no hope of competing against Uber commercially, they sued the government over the inflated prices they were forced to pay. The government responded to the law suit by saying no one forced them, they were sold at auction. The courts largely sided with the governments, perhaps because they have near infinite legal resources and the taxi's were broke. Some governments later did hand some "sorry" payments to the taxi drivers, but there were more token amounts. So the real reason for the enormous pain the taxi's have had to endure (I'm sure it cause financial ruin and suicides) is taxi's licenses were effectively a very poorly implemented tax. When a business discovered how to use new technology to exploit the opportunity created by that tax, it wasn't the drafters of the law who suffered, it was the taxi's. They have my sincere sympathy.
- araes 3y ago
  Thank you for the rather long explanation that was not especially inflammatory. The original point of the comment was that $500,000 seemed difficult to believe. You at least provide a thorough, if rather Machiavellian explanation. Not sure if I agree on the sympathy, mostly because they probably had $AUS in their eyes initially, seeing the prices other people complain about. However, too far away in America, with too much American shadowbanning filter on all news, to have any relevant view on the issue.

perilunar 3y ago

The NSW government controls the number of taxis and set the fares. I have some sympathy for the drivers, but if anyone should be compensating them it's the government, not Uber.