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I once talked to a taxi driver (who didn't own the medallion), who said he paid the owner $1,500 per month to drive for him. Plus the cost of his car, gas, and

I once talked to a taxi driver (who didn't own the medallion), who said he paid the owner $1,500 per month to drive for him. Plus the cost of his car, gas, and high insurance. He had to earn $3,000 per month just to break even. Taxi drivers never made a lot of money, even in the old system. But at least the system protected them to a degree by limiting competition. Now there is no protection. It's a free market. Anyone with a Toyota Yaris can fire up Uber-X and compete during the busy couple of hours of the night. It will be a race to the bottom for driver incomes, for sure.

greggyb 12y ago
Except in the Uber/Lyft scenario, we see no $1500/month deadweight loss going to an economic rent. There's also no reason to presuppose that personal transportation SHOULD provide a livelihood. The goal of companies like Uber/Lyft is to take advantage of the currently wasted extra carrying capacity in personal vehicles. There's no reason to expect a priori that the value of extra capacity is enough to provide an income. The goal of these companies is to provide cheaper transportation to those without cars, not to provide a living for those with cars. If less money overall is spent on transportation (which is >90% means to an end, excepting joyriding and competition), which is the case when currently excess capacity is utilized, and consumers also spend less (and consequently capital tied up in personal vehicles), then more capital and income is available for other goods and services. Obviously, any major paradigm shift in the provision of a good or service will cause some level of upset for those accustomed to the current paradigm, but that does not make the shift a negative one. Further, attempts to ease the transition only draw out the period where we operate in a lossy manner. In another manner of speaking, when I heard of Uber and Lyft, I did not think that I could quit my day job since I have a car, nor would I have decided to go buy a car if I didn't have one for the purpose of earning income. I did think that they could be a valuable way to defray a portion of my already sunk cost of owning a vehicle. If I hadn't owned a vehicle, these services may have lowered the marginal cost of acquiring a vehicle enough that I could now reasonably afford one. In both of the above lines of reasoning (currently owning or deciding to purchase), they are not a means of supporting myself, but a means of sharing some of my costs with others who are willing to pay. A car still costs money, but by renting space in it, I can lower the cost. Think of it more akin to AirBnB - if I own an apartment with an extra room, I don't expect to pay my whole rent with AirBnB-ing out the extra room, but I certainly expect to pay part of my rent out of it. The only difference is that Uber/Lyft rent room in a car.
- mkhalil 12y ago
  "no reason to presuppose that personal transportation SHOULD provide a livelihood" This. It's not Uber's goal to make it so you can live off of Uber. It's to provide people with extra money the side. Does this hurt the livelihood of regular taxi company drivers in the long run? Of coarse. But with so many cars on the road, maybe it's an outdated occupation.
  - greggyb 12y ago
    This article[0] (available with free registration) is a very interesting read on the history of jitney services in the US, and the fall of this massively popular form of ride-sharing. It is a useful case study in regulation used anti-competitively, and the misaligned interests between consumers (those wanting cheap convenient transport) and the incumbent services backed by municipalities (those wanting monopoly rents and the tax income from it). These arguments hold parallels to many infrastructure and service provider debates we see today (heck we even come across the term common carrier in the article). There were, of course, valid objections at the time, and there are today. Many of the same ones are repeated in the article. The most interesting part to me, though, is the several page exposition (295-303) on the characteristics of jitney transportation. It is clear that in its natural form, ride-sharing does not lend itself to long-term full time employment. Some anecdotes from the article are a doctor who keeps a car for house calls allowing his son to use the car (sunk cost) as a jitney; the commuters who post their destination and only pick up passengers on their way to/from work; and those individuals who supplement their income with several hours a week of jitney work. This article supports my original comment (the grandparent) and the parent here that Uber/Lyft should not be viewed as traditional employers. I would alter the quote below to indicate that taxi driver as an occupation was never an occupation until regulation in the interest of a more lucrative (for the incumbent firms and for the municipalities they operated in) business forced an artificial constriction in the market for public transport. >But with so many cars on the road, maybe it's an outdated occupation [0]http://www.jstor.org/discover/724795?sid=21105612783593&uid=3739256&uid=2488599363&uid=3&uid=70&uid=60&uid=2134&uid=3739664&uid=2&uid=2488599353 http://www.jstor.org/discover/724795?sid=21105612783593&uid=...
- golemotron 12y ago

greggyb 12y ago

Except in the Uber/Lyft scenario, we see no $1500/month deadweight loss going to an economic rent. There's also no reason to presuppose that personal transportation SHOULD provide a livelihood. The goal of companies like Uber/Lyft is to take advantage of the currently wasted extra carrying capacity in personal vehicles. There's no reason to expect a priori that the value of extra capacity is enough to provide an income. The goal of these companies is to provide cheaper transportation to those without cars, not to provide a living for those with cars. If less money overall is spent on transportation (which is >90% means to an end, excepting joyriding and competition), which is the case when currently excess capacity is utilized, and consumers also spend less (and consequently capital tied up in personal vehicles), then more capital and income is available for other goods and services. Obviously, any major paradigm shift in the provision of a good or service will cause some level of upset for those accustomed to the current paradigm, but that does not make the shift a negative one. Further, attempts to ease the transition only draw out the period where we operate in a lossy manner. In another manner of speaking, when I heard of Uber and Lyft, I did not think that I could quit my day job since I have a car, nor would I have decided to go buy a car if I didn't have one for the purpose of earning income. I did think that they could be a valuable way to defray a portion of my already sunk cost of owning a vehicle. If I hadn't owned a vehicle, these services may have lowered the marginal cost of acquiring a vehicle enough that I could now reasonably afford one. In both of the above lines of reasoning (currently owning or deciding to purchase), they are not a means of supporting myself, but a means of sharing some of my costs with others who are willing to pay. A car still costs money, but by renting space in it, I can lower the cost. Think of it more akin to AirBnB - if I own an apartment with an extra room, I don't expect to pay my whole rent with AirBnB-ing out the extra room, but I certainly expect to pay part of my rent out of it. The only difference is that Uber/Lyft rent room in a car.

mkhalil 12y ago
"no reason to presuppose that personal transportation SHOULD provide a livelihood" This. It's not Uber's goal to make it so you can live off of Uber. It's to provide people with extra money the side. Does this hurt the livelihood of regular taxi company drivers in the long run? Of coarse. But with so many cars on the road, maybe it's an outdated occupation.
- greggyb 12y ago
  This article[0] (available with free registration) is a very interesting read on the history of jitney services in the US, and the fall of this massively popular form of ride-sharing. It is a useful case study in regulation used anti-competitively, and the misaligned interests between consumers (those wanting cheap convenient transport) and the incumbent services backed by municipalities (those wanting monopoly rents and the tax income from it). These arguments hold parallels to many infrastructure and service provider debates we see today (heck we even come across the term common carrier in the article). There were, of course, valid objections at the time, and there are today. Many of the same ones are repeated in the article. The most interesting part to me, though, is the several page exposition (295-303) on the characteristics of jitney transportation. It is clear that in its natural form, ride-sharing does not lend itself to long-term full time employment. Some anecdotes from the article are a doctor who keeps a car for house calls allowing his son to use the car (sunk cost) as a jitney; the commuters who post their destination and only pick up passengers on their way to/from work; and those individuals who supplement their income with several hours a week of jitney work. This article supports my original comment (the grandparent) and the parent here that Uber/Lyft should not be viewed as traditional employers. I would alter the quote below to indicate that taxi driver as an occupation was never an occupation until regulation in the interest of a more lucrative (for the incumbent firms and for the municipalities they operated in) business forced an artificial constriction in the market for public transport. >But with so many cars on the road, maybe it's an outdated occupation [0]http://www.jstor.org/discover/724795?sid=21105612783593&uid=3739256&uid=2488599363&uid=3&uid=70&uid=60&uid=2134&uid=3739664&uid=2&uid=2488599353 http://www.jstor.org/discover/724795?sid=21105612783593&uid=...
golemotron 12y ago