4 ms·

No, Uber didn't fail anyone. To the extent there's a failure somewhere, it's the monopoly the municipality holds on taxi medallions, which artificially limits s

by bedhead 12y ago

No, Uber didn't fail anyone. To the extent there's a failure somewhere, it's the monopoly the municipality holds on taxi medallions, which artificially limits supply of taxis overall.

tptacek 12y ago
Municipalities and states hold "monopolies" on licenses of all sorts; the argument that says medallions are bad public policy because they're monopolistic applies equally to many other forms of licensure, for instance zoning.
- alexeisadeski3 12y ago
  Yes, yes it does. If Uber could help usher in the end of some of the other government monopolies, we'd be looking at some huge steps forward.
  - rayiner 12y ago
    I think it's time to reconsider a lot of state licensing regimes. But the fact that they're licensing regimes isn't what makes them bad. Licensing regimes are a perfectly reasonable way for the state to control behavior that involves negative externalities. I think almost everyone agrees that governments shouldn't allow factories to be created in residential areas, or allow drivers to drive without liability insurance.
    - tptacek 12y ago
      Careful: ancaps, hardly an Internet endangered species, definitely don't agree with this.
      - zachlipton 12y ago
        And we don't necessarily have to take every single view seriously. The vast majority of people don't want a massive polluting factory built next to their single-family home. The fact that a few people disagree doesn't mean that every project get bogged down in a discussion of the legitimacy of zoning as a concept.
        alexeisadeski3 12y ago
        Ancaps simply have more efficient ways of keeping the polluting factories away from homes than existing zoning processes can achieve.
    - alexeisadeski3 12y ago
      >I think almost everyone agrees that governments shouldn't allow factories to be created in residential areas, or allow drivers to drive without liability insurance. Zoning is not needed for the former.
    - deleted 12y ago
      [deleted]
- NiceOneBrah 12y ago
  >the argument that says medallions are bad public policy because they're monopolistic applies equally to many other forms of licensure, for instance zoning. True; many of those other forms of licensure are also bad.
- simonh 12y ago
  I think it only makes sense to argue on a case by case basis. Saying one unreasonable practice is ok because there are other unreasonable practices is hardly constructive. For example there is a fixed limit on available land, therefore it makes sense to regulate its use for the common good. The problem with licensing taxis isn't that they are licensed, it's that the number of licenses is fixed arbitrarily without regard to the actual need for taxis.
  - tptacek 12y ago
    So you're saying there is a valid public policy case for limiting the number of taxis, and you just think San Francisco got the number wrong? (For what it's worth: that's what I think too).
- bedhead 12y ago
  While this is true, what makes taxi medallions so unique is the price discovery. This is one of those rare things where you can see, quite unambiguously, the direct effect of the monopolistic behavior. Other things like zoning tend to be very complex and ambiguous, but taxi medallions are simple. The effect? NYC taxi medallion prices have grown by 29% annually over 30 years. As someone in the investment world, that might be the single best performing asset class I can think of, all for the privilege of taking someone from point A to point B. I noticed airlines don't need medallions - how has that worked out? http://www.theatlantic.com/business/archive/2011/10/the-amazing-1-million-nyc-taxi-medallion/247158/ http://www.theatlantic.com/business/archive/2011/10/the-amaz...
  - tptacek 12y ago
    Did you just suggest that it's easier to start a commercial airline than it is to get a taxi medallion? Have you ever paid attention to the drama about who gets what gates at which airports? Or watched local political battles over the addition of new runways at an airport?
    - bedhead 12y ago
      No. One's supply limited by the government, the other's is not. At the end of the day they both just transport people from point A to point B. Owners of planes have gone bankrupt 1,000 times since 1980, while owners of taxis have the single best returning asset I can think of. Do you really think government meddling (or medallioning, heh heh) hasn't been about 85% responsible for this otherwise incomprehensible result?
      - dragonwriter 12y ago
        > Do you really think government meddling (or medallioning, heh heh) hasn't been about 85% responsible for this otherwise incomprehensible result? Its 100% responsible, from one perspective, because "bankruptcy" is one form of government "meddling" in economic markets.
      - tptacek 12y ago
- lisper 12y ago
  Zoning is not a fair comparison. Land use has very different kinds of externalities than for-hire transportation. If I build a munitions plant next to your house that impacts you in ways that my getting paid to drive someone from A to B does not.
  - tptacek 12y ago
    Two responses. First, land use has different externalities, but for-hire cars still have obvious externalities. And because of the civic role that taxis have assumed over the last 50 years, decisions about the management of the taxi market have still more externalities. Second, my point wasn't that land use and taxis have the same issues, but rather that the logic that taxi medallions were bad public policy because "monopoly" was flimsy. Which, it is.
    - lisper 12y ago
      > for-hire cars still have obvious externalities Like what? Note that, for example, "They take up space on the road and pollute the air" doesn't count because not-for-hire cars do the exact same thing. It has to be an externality that is caused by the fact that the ride is for-hire. There may be such externalities, but I think they are far from obvious. > the logic that taxi medallions were bad public policy because "monopoly" was flimsy It's not the medallions per se that are the bad public policy, it's artificially limiting the supply (and then compounding the problem by making them transferrable). That's what the OP (almost surely) meant by "monopoly". Zoning also artificially constrains the supply of land available for certain uses, but that is clearly justifiable because of the (actually obvious) externalities of land use. The externalities of paying someone for a ride are far less clear.
      - SilasX 12y ago
        >Like what? Note that, for example, "They take up space on the road and pollute the air" doesn't count because not-for-hire cars do the exact same thing. It has to be an externality that is caused by the fact that the ride is for-hire. There may be such externalities, but I think they are far from obvious. More specifically, the externality argument about taxis is that they take up space while hunting for fares, while private cars only drive when actually being used to get somewhere. I agree though, that the point is irrelevant to Uber, since it's strictly a by-request car service that is not hailed from the street, and so doesn't cause the congestion that typical fare hunters would.
tfinniga 12y ago
On the other hand, the limit on taxi medallions protects a common resource, room on the streets. Maybe the balance isn't right, but you're going to need some artificial limitation or else you're going to have a classic tragedy of the commons.
- nickff 12y ago
  There does not need to be an "artificial limitation" to protect every 'commons'.[1] Many have made the case that services like Uber and Lyft actually free up street space, and allow more people to get to work faster, because less parking spaces are required, and these services usually allow ride-sharing, which is banned (or effectively prevented) by many cities which license taxis and taxi companies. [1] http://en.wikipedia.org/wiki/Elinor_Ostrom http://en.wikipedia.org/wiki/Elinor_Ostrom
  - tfinniga 12y ago
    Thanks for the link to Elinor Ostrom. It seems like what she was saying is that if the people who own and use the common resource have the ability to create rules and enforce them, then they can avoid a tragedy of the commons. I'd totally agree with that, you need some way to govern the resource. About freeing up street space, I'd be curious to see some kind of statistics about how many lyft drivers were headed that way anyway and just pick up passengers vs. how many are providing a taxi-like service. Is there a way in the lyft or uber software as a driver to say that you're only looking for passengers going from one location to another location? It seems like slugging is more likely to provide those benefits.
    - nickff 12y ago
      Using ownership of a resource to give an incentive for preservation and long-term thinking has its roots at least as far back as Armen A. Alchian.[1] Ostrom's achievement was finding that many cultures had alternative solutions, and that these solutions were very effective. I am sorry to say that I do not have the statistics that you are looking for. [1] http://www.econlib.org/library/Enc/PropertyRights.html http://www.econlib.org/library/Enc/PropertyRights.html
sliverstorm 12y ago
Not necessarily a failure. One of the purposes of medallions is to control the number of taxis on the road. It's a conscious choice, and the fallout is accepted in exchange for less taxi congestion.

by bedhead 12y ago

No, Uber didn't fail anyone. To the extent there's a failure somewhere, it's the monopoly the municipality holds on taxi medallions, which artificially limits supply of taxis overall.

tptacek 12y ago

Municipalities and states hold "monopolies" on licenses of all sorts; the argument that says medallions are bad public policy because they're monopolistic applies equally to many other forms of licensure, for instance zoning.

alexeisadeski3 12y ago
Yes, yes it does. If Uber could help usher in the end of some of the other government monopolies, we'd be looking at some huge steps forward.
- rayiner 12y ago
  I think it's time to reconsider a lot of state licensing regimes. But the fact that they're licensing regimes isn't what makes them bad. Licensing regimes are a perfectly reasonable way for the state to control behavior that involves negative externalities. I think almost everyone agrees that governments shouldn't allow factories to be created in residential areas, or allow drivers to drive without liability insurance.
  - tptacek 12y ago
    Careful: ancaps, hardly an Internet endangered species, definitely don't agree with this.
    - zachlipton 12y ago
      And we don't necessarily have to take every single view seriously. The vast majority of people don't want a massive polluting factory built next to their single-family home. The fact that a few people disagree doesn't mean that every project get bogged down in a discussion of the legitimacy of zoning as a concept.
      - alexeisadeski3 12y ago
        Ancaps simply have more efficient ways of keeping the polluting factories away from homes than existing zoning processes can achieve.
  - alexeisadeski3 12y ago
    >I think almost everyone agrees that governments shouldn't allow factories to be created in residential areas, or allow drivers to drive without liability insurance. Zoning is not needed for the former.
  - deleted 12y ago
    [deleted]
NiceOneBrah 12y ago
>the argument that says medallions are bad public policy because they're monopolistic applies equally to many other forms of licensure, for instance zoning. True; many of those other forms of licensure are also bad.
simonh 12y ago
I think it only makes sense to argue on a case by case basis. Saying one unreasonable practice is ok because there are other unreasonable practices is hardly constructive. For example there is a fixed limit on available land, therefore it makes sense to regulate its use for the common good. The problem with licensing taxis isn't that they are licensed, it's that the number of licenses is fixed arbitrarily without regard to the actual need for taxis.
- tptacek 12y ago
  So you're saying there is a valid public policy case for limiting the number of taxis, and you just think San Francisco got the number wrong? (For what it's worth: that's what I think too).
bedhead 12y ago
While this is true, what makes taxi medallions so unique is the price discovery. This is one of those rare things where you can see, quite unambiguously, the direct effect of the monopolistic behavior. Other things like zoning tend to be very complex and ambiguous, but taxi medallions are simple. The effect? NYC taxi medallion prices have grown by 29% annually over 30 years. As someone in the investment world, that might be the single best performing asset class I can think of, all for the privilege of taking someone from point A to point B. I noticed airlines don't need medallions - how has that worked out? http://www.theatlantic.com/business/archive/2011/10/the-amazing-1-million-nyc-taxi-medallion/247158/ http://www.theatlantic.com/business/archive/2011/10/the-amaz...
- tptacek 12y ago
  Did you just suggest that it's easier to start a commercial airline than it is to get a taxi medallion? Have you ever paid attention to the drama about who gets what gates at which airports? Or watched local political battles over the addition of new runways at an airport?
  - bedhead 12y ago
    No. One's supply limited by the government, the other's is not. At the end of the day they both just transport people from point A to point B. Owners of planes have gone bankrupt 1,000 times since 1980, while owners of taxis have the single best returning asset I can think of. Do you really think government meddling (or medallioning, heh heh) hasn't been about 85% responsible for this otherwise incomprehensible result?
    - dragonwriter 12y ago
      > Do you really think government meddling (or medallioning, heh heh) hasn't been about 85% responsible for this otherwise incomprehensible result? Its 100% responsible, from one perspective, because "bankruptcy" is one form of government "meddling" in economic markets.
    - tptacek 12y ago
lisper 12y ago
Zoning is not a fair comparison. Land use has very different kinds of externalities than for-hire transportation. If I build a munitions plant next to your house that impacts you in ways that my getting paid to drive someone from A to B does not.
- tptacek 12y ago
  Two responses. First, land use has different externalities, but for-hire cars still have obvious externalities. And because of the civic role that taxis have assumed over the last 50 years, decisions about the management of the taxi market have still more externalities. Second, my point wasn't that land use and taxis have the same issues, but rather that the logic that taxi medallions were bad public policy because "monopoly" was flimsy. Which, it is.
  - lisper 12y ago
    > for-hire cars still have obvious externalities Like what? Note that, for example, "They take up space on the road and pollute the air" doesn't count because not-for-hire cars do the exact same thing. It has to be an externality that is caused by the fact that the ride is for-hire. There may be such externalities, but I think they are far from obvious. > the logic that taxi medallions were bad public policy because "monopoly" was flimsy It's not the medallions per se that are the bad public policy, it's artificially limiting the supply (and then compounding the problem by making them transferrable). That's what the OP (almost surely) meant by "monopoly". Zoning also artificially constrains the supply of land available for certain uses, but that is clearly justifiable because of the (actually obvious) externalities of land use. The externalities of paying someone for a ride are far less clear.
    - SilasX 12y ago
      >Like what? Note that, for example, "They take up space on the road and pollute the air" doesn't count because not-for-hire cars do the exact same thing. It has to be an externality that is caused by the fact that the ride is for-hire. There may be such externalities, but I think they are far from obvious. More specifically, the externality argument about taxis is that they take up space while hunting for fares, while private cars only drive when actually being used to get somewhere. I agree though, that the point is irrelevant to Uber, since it's strictly a by-request car service that is not hailed from the street, and so doesn't cause the congestion that typical fare hunters would.

tfinniga 12y ago

On the other hand, the limit on taxi medallions protects a common resource, room on the streets. Maybe the balance isn't right, but you're going to need some artificial limitation or else you're going to have a classic tragedy of the commons.

nickff 12y ago
There does not need to be an "artificial limitation" to protect every 'commons'.[1] Many have made the case that services like Uber and Lyft actually free up street space, and allow more people to get to work faster, because less parking spaces are required, and these services usually allow ride-sharing, which is banned (or effectively prevented) by many cities which license taxis and taxi companies. [1] http://en.wikipedia.org/wiki/Elinor_Ostrom http://en.wikipedia.org/wiki/Elinor_Ostrom
- tfinniga 12y ago
  Thanks for the link to Elinor Ostrom. It seems like what she was saying is that if the people who own and use the common resource have the ability to create rules and enforce them, then they can avoid a tragedy of the commons. I'd totally agree with that, you need some way to govern the resource. About freeing up street space, I'd be curious to see some kind of statistics about how many lyft drivers were headed that way anyway and just pick up passengers vs. how many are providing a taxi-like service. Is there a way in the lyft or uber software as a driver to say that you're only looking for passengers going from one location to another location? It seems like slugging is more likely to provide those benefits.
  - nickff 12y ago
    Using ownership of a resource to give an incentive for preservation and long-term thinking has its roots at least as far back as Armen A. Alchian.[1] Ostrom's achievement was finding that many cultures had alternative solutions, and that these solutions were very effective. I am sorry to say that I do not have the statistics that you are looking for. [1] http://www.econlib.org/library/Enc/PropertyRights.html http://www.econlib.org/library/Enc/PropertyRights.html

sliverstorm 12y ago

Not necessarily a failure. One of the purposes of medallions is to control the number of taxis on the road. It's a conscious choice, and the fallout is accepted in exchange for less taxi congestion.