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You're missing the key regulation these services are trying to do an end-run around: an artificial cap on the number of taxi licenses allowed in these cities. N

by ripley1 14y ago

You're missing the key regulation these services are trying to do an end-run around: an artificial cap on the number of taxi licenses allowed in these cities. Nothing to do with safety, just an officially-sanctioned cartel. Compliance with all existing regulations would in many jurisdictions require the purchase of existing taxi drivers' medallions (or the equivalent) at exorbitant rates - and not one extra cab would be allowed on the street after that transfer is complete. You're making it sound like regulatory compliance for Uber and Lyft is as simple as ensuring that their drivers are competent and providing some means of recompense for wronged customers. That simply isn't true.

rprasad 14y ago
I don't think that regulatory compliance is as simple as ensuring that drivers are competent and providing some means of recompense. That is merely the purpose of enforcement, not the mechanism. The mechanism is a great deal more complex, and involves multiple inspections: vehicle inspections, garage inspections, drive interviews, random audits, a good deal of compliance-related paperwork, etc. It is an artifical cap that is deliberately intended to inflate prices above marginal costs, to ensure that market participants achieve sufficent revenue that they can actually afford the requirements (i.e., insurance, maintenance, etc.). Without that cap, taxi cab and charter car rates would drop to unprofitable levels as the influx of drivers would push rates to the floor. Cab and charter car service providers would skimp on costs, most likely maintenance and insurance, which would place passengers at risk. However, it is more likely that most cabs/charter cars would be independent cars. It is also in place to minimize the level of market participants to maintain the feasibility of enforcement. It's possible to effectively enforce these regulations with a dozen or so companies with a handful of regulators. With hundreds of independent market participants, the sheer amount of work to conduct normal inspections or other enforcement activities would overwhelm the enforcement agency, requiring either substantial fee increases, tax increases, or roulette enforcement.

by ripley1 14y ago

rprasad 14y ago

I don't think that regulatory compliance is as simple as ensuring that drivers are competent and providing some means of recompense. That is merely the purpose of enforcement, not the mechanism. The mechanism is a great deal more complex, and involves multiple inspections: vehicle inspections, garage inspections, drive interviews, random audits, a good deal of compliance-related paperwork, etc. It is an artifical cap that is deliberately intended to inflate prices above marginal costs, to ensure that market participants achieve sufficent revenue that they can actually afford the requirements (i.e., insurance, maintenance, etc.). Without that cap, taxi cab and charter car rates would drop to unprofitable levels as the influx of drivers would push rates to the floor. Cab and charter car service providers would skimp on costs, most likely maintenance and insurance, which would place passengers at risk. However, it is more likely that most cabs/charter cars would be independent cars. It is also in place to minimize the level of market participants to maintain the feasibility of enforcement. It's possible to effectively enforce these regulations with a dozen or so companies with a handful of regulators. With hundreds of independent market participants, the sheer amount of work to conduct normal inspections or other enforcement activities would overwhelm the enforcement agency, requiring either substantial fee increases, tax increases, or roulette enforcement.