6 ms·

"The crucial question for medallion owners like Mr. Ionescu is, if Uber is that much cheaper than a taxi, why would anyone take a taxi, and therefore why would

"The crucial question for medallion owners like Mr. Ionescu is, if Uber is that much cheaper than a taxi, why would anyone take a taxi, and therefore why would any driver pay to lease a medallion? Mr. Ionescu says his revenues are down around 25 percent, and he’s having trouble leasing out his whole fleet." Apart for selling the right to operate in a government sanctioned monopoly what service does this man provide? This looks like the worse example of rent seeking I have seen.

ghshephard 12y ago
Here are the "non-services" that he provides: o A poorly tracked rider/driver interaction in which it's somewhat obscured which riders I road with in case I have a bad interaction and need to follow up. o A poorly designed hailing system in which I need to physically see the taxi in order to request its service. o A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all. o Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction. Without the medallion, of course, he couldn't afford to provide those "non-services", and would therefore have to compete for business. The medallion is what allows him to provide such a horrible level of service - and, such poor service is frequently seen in most monopolistic markets. See Comcast.
- nodata 12y ago
  You missed out all of the actual services he provides, such as all of the ones the law stipulates.
  - phaemon 12y ago
    So did you.
  - ps4fanboy 12y ago
    I think your conflating the services his customers provide with what he provides, all this man does is lease medallions to other companies/people.
    - corin_ 12y ago
      There's an argument to be made that, given the cost of medallions, men like this are essentially enabling people who couldn't otherwise afford to be taxi drivers to do that job.
      - msh 12y ago
        And how is that not a really bad case of rent seeking? If he did not do this the price of the medallion would have to be something the driver could afford.
        corin_ 12y ago
        In the situation that exists, the drivers need him to provide that service. Of course I think the system is absolutely fucked up, but that doesn't mean that he isn't providing a useful service to his drivers currently.
        msh 12y ago
        Dont you think that the prices would be lower if you were not allowed to lease out your medalion? My point was that he is partly responsible for creating a fucked up system and does not provide any value to it but just raises the prices.
        BrainInAJar 12y ago
        I actually think prices would be higher if you weren't allowed to lease out your medallion (or at least availability would be much worse.) You can only work so many hours in the day, for the time you aren't working your medallion is either idle, or being used by someone else.
- CmonDev 12y ago
  The writing was on the wall, it spelled "GPS and mobile connected apps".
- furyg3 12y ago
  It's also important to list the proposed services the monopoly provides. Personally I avoid them at all costs... Nevertheless they are historically: * Price reliability: Prices in most taxi systems follow strict rules. Customers can use this knowledge to estimate what they will spend, and drivers what they can earn. * Service dependability: Because medallions are limited and prices are regulated, taxi drivers can make a living, and the service does not boom/bust. This means customers are not gouged in good times and unable to find taxis in bad times. * Non-discrimination: Taxis are usually required to respond to all hails, and to not refuse service because your ride is too short/long. * Driver tracking: because a taxi driver must have a medallion and follow rules about posting information in/on their cabs, passengers can distinguish between 'taxis' and random people offering ride services. While there may be no built-in reputation system, there is incentive and recourse. How do passengers know if a non-taxi is a guy who makes his living from offering rides, or a guy who just stole a car and is going to rob them? A taxi driver is risking a lot by robbing his passenger. Many of these points are matters of preference, or can be solved by technology (reputation). Do we, as a society, want to incentivize a stable transit system by limiting the number of drivers or by paying more than 'market' prices in slow periods, and more in busy periods? Do we want drivers to be able to refuse service? If not, how do we compensate drivers who make short/long trips that have low profitability and high opportunity costs?
  - tomp 12y ago
    > Non-discrimination: Aparently, that's not true in the US - I've read about many times how white people hail cabs for their black friends, because cabs won't stop for black people.
    - e98cuenc 12y ago
      In SF a cab refused to take us (a white guy and girl and a 6 month toddler) to Lombard street because it was "2 blocks away". It was in fact 6 blocks away with awful ups and down. I had a really hard 15 - 20 minutes going up and down trying to don't fall with our baby cart. The 3 times our friend in SF ordered a Uber, it never failed, even though one of these rides was shorter than the one we requested to Lombard St. To me it's clear who is providing the non-discrimination service and who is not.
- tomp 12y ago
  On the other hand: - I can get a cab even if my phone battery days (or if I don't have the phone) - in theory, they can't say no (apparently, they sometimes do in NY, but haven't had that happen to me in London yet) - they know the city, and don't need to be constantly looking at the GPS while driving. - no surge pricing
  - dantheman 12y ago
    Every taxi I've been in across the US has a GPS that they use.
    - geofft 12y ago
      I was surprised the other day to street-hail a taxi in London (near Piccadilly Circus), of all places, and find the driver using a GPS to figure out where we were going and how to get there. "Knowing the city without needing a GPS" is probably a feature I would pick a product on, but it seems to me it's not reliable anywhere any more. Lyft and Uber both let me set my destination in the app and send that to the driver's phone, but regardless of service, these days I'll tend to tell the driver how to get there if it's a city I'm familiar with.
      - julian_t 12y ago
        Most London cabbies are very proud of "the knowledge", so I wonder if your driver had a GPS to tell him about traffic conditions rather than the route?
  - judk 12y ago
    In a surge, there are fewer cabs than would-be riders.
- wheels 12y ago
  That organization isn't intrinsic to Uber or a taxi system though. In Berlin there's a popular app called MyTaxi that's used by taxi drivers and end-users which builds all of that on top of the city's licensed cabs. (It exists in other cities as well, though I can't speak for it there.) You can order, pay, tip, estimate costs, see them approaching, review and make a call to your driver from within the app. From that perspective I think it's just a missed opportunity to have built some of those features on top of existing taxi systems.
  - humanrebar 12y ago
    > From that perspective I think it's just a missed opportunity to have built some of those features on top of existing taxi systems. There's no incentive to implement that sort of innovation. The prices and number of cabs are both more-or-less set. The medallions are fairly well utilized and the revenues have a hard ceiling, so there's not enough incentive to scale up or introduce new business models.
- yincrash 12y ago
  In New York, where the story takes place: >A poorly designed hailing system in which I need to physically see the taxi in order to request its service. I actually prefer taxis if I'm in Manhattan because it is about 10x faster to hail one of the many taxis rolling by than it is to wait and watch on your phone your Uber driver slowly make its way to you. >A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all. In New York, the cab's center lamp is lit up when vacant and available for hails. >Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction. Tipping is the main incentive. Reporting of bad behavior goes through 311 (in New York). If you pay via credit card, the cab's medallion number is even on your receipt, so you don't have to remember it when you're in a huff leaving the cab. I'm not saying the taxi cabs are the best system, but I want to quell misinformation.
  - colinbartlett 12y ago
    It's only 10x faster to hail a cab if you're somewhere in the lower half of Manhattan AND it's not at a peak time. Outside of those conditions, I find Uber much faster. Although yellow cabs in NYC are required to take you where you request, some will break this rule, or just do it begrudgingly. Same with taking a card, they will do it but make a big show and a stink about it. One even said I better give him a "big tip" for taking me to the airport.
  - f3llowtraveler 12y ago
    Try hailing a cab in Manhattan once it starts raining.
    - baddox 12y ago
      In fairness, try calling an Uber in San Francisco when it's raining.
  - humanrebar 12y ago
- k-mcgrady 12y ago
  Don't points 2 and 3 conflict?
gutnor 12y ago
He is a middle-man. He provides flexibility in the medallion scheme (offering scheme that are not provided by the government), take financial risk ( he put the money on the table and need to find some driver ) and so ensure more taxi are on the street than if he wasn't there. You can see all the middle-men in any business as useless if "XYZ" was better. Now in the case of that guy in particular, he is just becoming obsolete, replaced by a better medallion system and a modern/leaner middleman: Uber. He disappears in the name of progress so there is nothing sad about that, but that does not mean he was never useful. Also, I guess somebody will point out that if he wasn't adding flexibility to the medallion system, Government would have been forced to fix it. That's wishful thinking: there is nothing that the government could not provide but Uber does, despite that it does not move at all in that direction. Government is not pressured by the market like people and businesses, this guy is greasing the part where government policies meet people reality.

ghshephard 12y ago

Here are the "non-services" that he provides: o A poorly tracked rider/driver interaction in which it's somewhat obscured which riders I road with in case I have a bad interaction and need to follow up. o A poorly designed hailing system in which I need to physically see the taxi in order to request its service. o A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all. o Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction. Without the medallion, of course, he couldn't afford to provide those "non-services", and would therefore have to compete for business. The medallion is what allows him to provide such a horrible level of service - and, such poor service is frequently seen in most monopolistic markets. See Comcast.

nodata 12y ago
You missed out all of the actual services he provides, such as all of the ones the law stipulates.
- phaemon 12y ago
  So did you.
- ps4fanboy 12y ago
  I think your conflating the services his customers provide with what he provides, all this man does is lease medallions to other companies/people.
  - corin_ 12y ago
    There's an argument to be made that, given the cost of medallions, men like this are essentially enabling people who couldn't otherwise afford to be taxi drivers to do that job.
    - msh 12y ago
      And how is that not a really bad case of rent seeking? If he did not do this the price of the medallion would have to be something the driver could afford.
      - corin_ 12y ago
        In the situation that exists, the drivers need him to provide that service. Of course I think the system is absolutely fucked up, but that doesn't mean that he isn't providing a useful service to his drivers currently.
        msh 12y ago
        Dont you think that the prices would be lower if you were not allowed to lease out your medalion? My point was that he is partly responsible for creating a fucked up system and does not provide any value to it but just raises the prices.
        BrainInAJar 12y ago
        I actually think prices would be higher if you weren't allowed to lease out your medallion (or at least availability would be much worse.) You can only work so many hours in the day, for the time you aren't working your medallion is either idle, or being used by someone else.
CmonDev 12y ago
The writing was on the wall, it spelled "GPS and mobile connected apps".
furyg3 12y ago
It's also important to list the proposed services the monopoly provides. Personally I avoid them at all costs... Nevertheless they are historically: * Price reliability: Prices in most taxi systems follow strict rules. Customers can use this knowledge to estimate what they will spend, and drivers what they can earn. * Service dependability: Because medallions are limited and prices are regulated, taxi drivers can make a living, and the service does not boom/bust. This means customers are not gouged in good times and unable to find taxis in bad times. * Non-discrimination: Taxis are usually required to respond to all hails, and to not refuse service because your ride is too short/long. * Driver tracking: because a taxi driver must have a medallion and follow rules about posting information in/on their cabs, passengers can distinguish between 'taxis' and random people offering ride services. While there may be no built-in reputation system, there is incentive and recourse. How do passengers know if a non-taxi is a guy who makes his living from offering rides, or a guy who just stole a car and is going to rob them? A taxi driver is risking a lot by robbing his passenger. Many of these points are matters of preference, or can be solved by technology (reputation). Do we, as a society, want to incentivize a stable transit system by limiting the number of drivers or by paying more than 'market' prices in slow periods, and more in busy periods? Do we want drivers to be able to refuse service? If not, how do we compensate drivers who make short/long trips that have low profitability and high opportunity costs?
- tomp 12y ago
  > Non-discrimination: Aparently, that's not true in the US - I've read about many times how white people hail cabs for their black friends, because cabs won't stop for black people.
  - e98cuenc 12y ago
    In SF a cab refused to take us (a white guy and girl and a 6 month toddler) to Lombard street because it was "2 blocks away". It was in fact 6 blocks away with awful ups and down. I had a really hard 15 - 20 minutes going up and down trying to don't fall with our baby cart. The 3 times our friend in SF ordered a Uber, it never failed, even though one of these rides was shorter than the one we requested to Lombard St. To me it's clear who is providing the non-discrimination service and who is not.
tomp 12y ago
On the other hand: - I can get a cab even if my phone battery days (or if I don't have the phone) - in theory, they can't say no (apparently, they sometimes do in NY, but haven't had that happen to me in London yet) - they know the city, and don't need to be constantly looking at the GPS while driving. - no surge pricing
- dantheman 12y ago
  Every taxi I've been in across the US has a GPS that they use.
  - geofft 12y ago
    I was surprised the other day to street-hail a taxi in London (near Piccadilly Circus), of all places, and find the driver using a GPS to figure out where we were going and how to get there. "Knowing the city without needing a GPS" is probably a feature I would pick a product on, but it seems to me it's not reliable anywhere any more. Lyft and Uber both let me set my destination in the app and send that to the driver's phone, but regardless of service, these days I'll tend to tell the driver how to get there if it's a city I'm familiar with.
    - julian_t 12y ago
      Most London cabbies are very proud of "the knowledge", so I wonder if your driver had a GPS to tell him about traffic conditions rather than the route?
- judk 12y ago
  In a surge, there are fewer cabs than would-be riders.
wheels 12y ago
That organization isn't intrinsic to Uber or a taxi system though. In Berlin there's a popular app called MyTaxi that's used by taxi drivers and end-users which builds all of that on top of the city's licensed cabs. (It exists in other cities as well, though I can't speak for it there.) You can order, pay, tip, estimate costs, see them approaching, review and make a call to your driver from within the app. From that perspective I think it's just a missed opportunity to have built some of those features on top of existing taxi systems.
- humanrebar 12y ago
  > From that perspective I think it's just a missed opportunity to have built some of those features on top of existing taxi systems. There's no incentive to implement that sort of innovation. The prices and number of cabs are both more-or-less set. The medallions are fairly well utilized and the revenues have a hard ceiling, so there's not enough incentive to scale up or introduce new business models.
yincrash 12y ago
In New York, where the story takes place: >A poorly designed hailing system in which I need to physically see the taxi in order to request its service. I actually prefer taxis if I'm in Manhattan because it is about 10x faster to hail one of the many taxis rolling by than it is to wait and watch on your phone your Uber driver slowly make its way to you. >A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all. In New York, the cab's center lamp is lit up when vacant and available for hails. >Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction. Tipping is the main incentive. Reporting of bad behavior goes through 311 (in New York). If you pay via credit card, the cab's medallion number is even on your receipt, so you don't have to remember it when you're in a huff leaving the cab. I'm not saying the taxi cabs are the best system, but I want to quell misinformation.
- colinbartlett 12y ago
  It's only 10x faster to hail a cab if you're somewhere in the lower half of Manhattan AND it's not at a peak time. Outside of those conditions, I find Uber much faster. Although yellow cabs in NYC are required to take you where you request, some will break this rule, or just do it begrudgingly. Same with taking a card, they will do it but make a big show and a stink about it. One even said I better give him a "big tip" for taking me to the airport.
- f3llowtraveler 12y ago
  Try hailing a cab in Manhattan once it starts raining.
  - baddox 12y ago
    In fairness, try calling an Uber in San Francisco when it's raining.
- humanrebar 12y ago
k-mcgrady 12y ago
Don't points 2 and 3 conflict?

gutnor 12y ago

He is a middle-man. He provides flexibility in the medallion scheme (offering scheme that are not provided by the government), take financial risk ( he put the money on the table and need to find some driver ) and so ensure more taxi are on the street than if he wasn't there. You can see all the middle-men in any business as useless if "XYZ" was better. Now in the case of that guy in particular, he is just becoming obsolete, replaced by a better medallion system and a modern/leaner middleman: Uber. He disappears in the name of progress so there is nothing sad about that, but that does not mean he was never useful. Also, I guess somebody will point out that if he wasn't adding flexibility to the medallion system, Government would have been forced to fix it. That's wishful thinking: there is nothing that the government could not provide but Uber does, despite that it does not move at all in that direction. Government is not pressured by the market like people and businesses, this guy is greasing the part where government policies meet people reality.