3 ms·

"Thousands of tellers lost their jobs when the ATM was invented. Thousands of taxi drivers should too because Uber is the next generation." Not a great paralle

"Thousands of tellers lost their jobs when the ATM was invented. Thousands of taxi drivers should too because Uber is the next generation." Not a great parallel - those taxi drivers can become Uber (or lyft, or sidecar, etc) drivers

gsibble 12y ago
I didn't say they would be unemployed. I said they would lose their jobs as taxi drivers ;)
gcb0 12y ago
but they lose 100k or more they paid for their medallion. and will have huge competition instead of a monopoly. on the other hand, uber price will only go up. until only the rich is allowed to be driven in the city.
- Houshalter 12y ago
  TIL more competition and lower barriers to entry drive prices up.
  - dalke 12y ago
    While I think you're being sarcastic, I believe the issue is this: SF taxi rates are regulated. This can lead to scarcity for everyone. Uber prices are not regulated. This can lead to scarcity for the poor. (Morally speaking, which is better?) So long as there's a linear (or perhaps "convex" might be a better term) response, then yes, more competition and lower barriers tends to drive prices down. Traffic is not one of them. Adding a few percentage more drivers can drastically slow everyone down. If small vehicles are the only way to get from place to place, and since the price of the trip on average is a profit for the driver, then it's advantageous for paid drivers to have more drivers on the streets. This causes more congestion, which causes longer drive times, which in turn requires more drivers to meet the demand. This is a stable solution, so is an example where more competition and lower barriers to entry end up increasing transportation costs. The city doesn't want congested streets. They make it hard to get business done, including goods deliveries and scheduling face-to-face meetings, and add pollution and more chances for accidents with serious injuries. Instead, observe that my preconditions are incorrect. There are other modes of transportation, including walking, biking, and public or private mass transit. A city might introduce a medallion system as one way to limit congestion, and use the resulting artificial scarcity as a way to entice people to use other transportation schemes which are overall better for the city.
    - Houshalter 12y ago
      That's good in theory, but is it actually true that cities are currently full of mostly Uber cars to the point where it's a problem? Or unregulated cabs, in cities that don't have medallions. The optimal economic solution would be to tax all traffic, have toll roads, or some kind of technological solution. I can't see any city ever doing that though. But it's only relevant if it really is a serious problem. The parent comment was ridiculous. It asserted that eliminating $100k barrier to entry, eliminating a monopoly (their own words), and increasing competition would drive prices up. You could maybe argue that congestion would increase, but prices almost certainly would not.
      - dalke 12y ago
        Yes, mine is a mathematical model. I believe that only NYC is close to that point, but I have no evidence to prove it. In any case, the SF mayor wants to raise the number of medallions as a source of revenue, so it's clear they are not limiting the number in order to influence transportation modality use. (The legislative history suggests that a goal of Prop K, which put the current regulations into place, was to prevent oligarchies in the local taxi cab industry.) FWIW, http://www.emmanuelcombe.org/moor.pdf http://www.emmanuelcombe.org/moor.pdf does an overview of what economists have written on the topic. Some papers conclude that taxi deregulation does what you think it would do, some papers conclude otherwise. There's no clear consensus. See http://www.thelocal.se/20090112/16868 http://www.thelocal.se/20090112/16868 for some of the situations that occur in a deregulated taxi marketplace. The history of taxi medallions in SF shows that Prop K was voted on to prevent oligarchies.
- beachstartup 12y ago
  the vast, vast majority of drivers do not own their medallions, or the cars they drive for that matter.
  - gcb0 12y ago
    but the entity that controls the use of the medallion in the end is the one assigning the price. that is important. if you have problems with the number of taxis, you don't solve it by throwing the hole system in the garbage and going full liberal. you put the people doing the bad planning to answer for their bad work. I know it is very hard for you to understand why taxi prices being regulated is a bad thing, you being a young yuppie in san francisco. but i hope you still have it when you are older, retired, with no close family, having to move around.

gsibble 12y ago

I didn't say they would be unemployed. I said they would lose their jobs as taxi drivers ;)

gcb0 12y ago

but they lose 100k or more they paid for their medallion. and will have huge competition instead of a monopoly. on the other hand, uber price will only go up. until only the rich is allowed to be driven in the city.

Houshalter 12y ago
TIL more competition and lower barriers to entry drive prices up.
- dalke 12y ago
  While I think you're being sarcastic, I believe the issue is this: SF taxi rates are regulated. This can lead to scarcity for everyone. Uber prices are not regulated. This can lead to scarcity for the poor. (Morally speaking, which is better?) So long as there's a linear (or perhaps "convex" might be a better term) response, then yes, more competition and lower barriers tends to drive prices down. Traffic is not one of them. Adding a few percentage more drivers can drastically slow everyone down. If small vehicles are the only way to get from place to place, and since the price of the trip on average is a profit for the driver, then it's advantageous for paid drivers to have more drivers on the streets. This causes more congestion, which causes longer drive times, which in turn requires more drivers to meet the demand. This is a stable solution, so is an example where more competition and lower barriers to entry end up increasing transportation costs. The city doesn't want congested streets. They make it hard to get business done, including goods deliveries and scheduling face-to-face meetings, and add pollution and more chances for accidents with serious injuries. Instead, observe that my preconditions are incorrect. There are other modes of transportation, including walking, biking, and public or private mass transit. A city might introduce a medallion system as one way to limit congestion, and use the resulting artificial scarcity as a way to entice people to use other transportation schemes which are overall better for the city.
  - Houshalter 12y ago
    That's good in theory, but is it actually true that cities are currently full of mostly Uber cars to the point where it's a problem? Or unregulated cabs, in cities that don't have medallions. The optimal economic solution would be to tax all traffic, have toll roads, or some kind of technological solution. I can't see any city ever doing that though. But it's only relevant if it really is a serious problem. The parent comment was ridiculous. It asserted that eliminating $100k barrier to entry, eliminating a monopoly (their own words), and increasing competition would drive prices up. You could maybe argue that congestion would increase, but prices almost certainly would not.
    - dalke 12y ago
      Yes, mine is a mathematical model. I believe that only NYC is close to that point, but I have no evidence to prove it. In any case, the SF mayor wants to raise the number of medallions as a source of revenue, so it's clear they are not limiting the number in order to influence transportation modality use. (The legislative history suggests that a goal of Prop K, which put the current regulations into place, was to prevent oligarchies in the local taxi cab industry.) FWIW, http://www.emmanuelcombe.org/moor.pdf http://www.emmanuelcombe.org/moor.pdf does an overview of what economists have written on the topic. Some papers conclude that taxi deregulation does what you think it would do, some papers conclude otherwise. There's no clear consensus. See http://www.thelocal.se/20090112/16868 http://www.thelocal.se/20090112/16868 for some of the situations that occur in a deregulated taxi marketplace. The history of taxi medallions in SF shows that Prop K was voted on to prevent oligarchies.
beachstartup 12y ago
the vast, vast majority of drivers do not own their medallions, or the cars they drive for that matter.
- gcb0 12y ago
  but the entity that controls the use of the medallion in the end is the one assigning the price. that is important. if you have problems with the number of taxis, you don't solve it by throwing the hole system in the garbage and going full liberal. you put the people doing the bad planning to answer for their bad work. I know it is very hard for you to understand why taxi prices being regulated is a bad thing, you being a young yuppie in san francisco. but i hope you still have it when you are older, retired, with no close family, having to move around.