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What happens when traditional taxis support their own apps? Is this somehow not possible or not going to happen? App enabled ride services are good but why can

What happens when traditional taxis support their own apps? Is this somehow not possible or not going to happen? App enabled ride services are good but why can't the taxis replicate it?

dnautics 12y ago
It is, except taxis don't want to do things like rate their drivers. "or is it due to the fact that they’re exempt from taxi regulations?" Because of this Lyft and Uber have had to proactively approach the problem of dealing with safety and the like by creating an internal review system for the drivers. This is one of the major innovations in the system. The other major innovation is the one-to-one-ness of the driver-passenger pairing. Before, taxis would be allowed to pick up a passenger on the way to their dispatch and effectively cancel the ride, (without communicating it to the passenger) which would then result in passengers calling more than one taxi to ensure the arrival of at least one, which would make taxis even less inclined to try to get a dispatch... Death spiral. I don't know if flywheel requires taxis to be rated or locked in, if those conditions are the case, then it will be a fairly effective alternative competing largely on price.
smackfu 12y ago
The article shows that a dispatched taxi is still much slower than Uber/Lyft. Whether that taxi is dispatched by phone or app doesn't seem like it would affect things much. I think the heart of the problem is that if a taxi ignores a dispatch and gets a street hail instead, there's very little consequence except for inconveniencing the customer who called in.
greggyb 12y ago
Taxi services are a classic case of monopoly through regulation. The canonical example is the medallion in NYC (and other places). These medallions are required to legally provide a traditional taxi service. They can cost $1M[0] (or can be leased for $1000s/month). The supply of taxis is limited by the restrictions on medallions - already leading to a movement along the demand curve to a point above market-clearing equilibrium (higher cost, lower quantity of transactions). In addition to the decreased supply, there is also a huge fixed cost in the medallion, which forces fares higher still. The primary benefit of Uber, in my mind is that it allows for the elimination of this deadweight loss, and allows taxi-service to be provided on the margin (someone who might provide trips only to and from work on UberX/similar) - maximizing the number of mutually beneficial transactions that occur while minimizing transaction costs. Focusing on the fact that it is an app is a red herring. [0]http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-medallions-cost-1-million/ http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-me...

What happens when traditional taxis support their own apps? Is this somehow not possible or not going to happen? App enabled ride services are good but why can't the taxis replicate it?

dnautics 12y ago

It is, except taxis don't want to do things like rate their drivers. "or is it due to the fact that they’re exempt from taxi regulations?" Because of this Lyft and Uber have had to proactively approach the problem of dealing with safety and the like by creating an internal review system for the drivers. This is one of the major innovations in the system. The other major innovation is the one-to-one-ness of the driver-passenger pairing. Before, taxis would be allowed to pick up a passenger on the way to their dispatch and effectively cancel the ride, (without communicating it to the passenger) which would then result in passengers calling more than one taxi to ensure the arrival of at least one, which would make taxis even less inclined to try to get a dispatch... Death spiral. I don't know if flywheel requires taxis to be rated or locked in, if those conditions are the case, then it will be a fairly effective alternative competing largely on price.

smackfu 12y ago

The article shows that a dispatched taxi is still much slower than Uber/Lyft. Whether that taxi is dispatched by phone or app doesn't seem like it would affect things much. I think the heart of the problem is that if a taxi ignores a dispatch and gets a street hail instead, there's very little consequence except for inconveniencing the customer who called in.

greggyb 12y ago

Taxi services are a classic case of monopoly through regulation. The canonical example is the medallion in NYC (and other places). These medallions are required to legally provide a traditional taxi service. They can cost $1M[0] (or can be leased for $1000s/month). The supply of taxis is limited by the restrictions on medallions - already leading to a movement along the demand curve to a point above market-clearing equilibrium (higher cost, lower quantity of transactions). In addition to the decreased supply, there is also a huge fixed cost in the medallion, which forces fares higher still. The primary benefit of Uber, in my mind is that it allows for the elimination of this deadweight loss, and allows taxi-service to be provided on the margin (someone who might provide trips only to and from work on UberX/similar) - maximizing the number of mutually beneficial transactions that occur while minimizing transaction costs. Focusing on the fact that it is an app is a red herring. [0]http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-medallions-cost-1-million/ http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-me...