How a 30K-member Facebook group filled the void left by Uber and Lyft in Austin

"Some cab drivers want the council to issue permits directly to drivers with at least five years of experience — what the drivers call "legacy permits"...

— bypassing Austin's three taxi franchise holders: Yellow Cab, Austin Cab and Lone Star. The change could cost cab companies control of the market — and the thousands of dollars they collect annually from each cabbie after paying the city just $400 for each permit."[0]

"STOA wants to limit the number of cabs on the street in order to increase market share for large operators; with less competition for passengers they would be able to cover their higher overhead costs, and presumably "can charge less per trip." By asking the city to regulate the number of cabs, STOA is asking the city to limit their competition."[1]

[0] http://www.statesman.com/news/news/local/taxi-industry-pours...

[1] http://savannahnow.com/column/2009-10-23/toma-cab-owners-see...

Is this how coffee shops, restaurants, bars, etc. are setup in any city you're aware of?

Whereas the city has a monopoly on Taxi services and licenses out to a very limited pool of providers. (And usually a closed group that you couldn't get into even if you could afford a medallion.)

We've seen them invent the fear ("You'll be raped") and spend tax money freaking people out with that idea, as well as the thoroughly useless idea to fingerprint drivers. It's a bad solution to a fake problem.

If taxi-rape really was a problem (as opposed to a statistical anomaly) they'd realize that Uber and Lyft are already an order of magnitude better. (They log so much more!)

> I think you're missing my point about perception. The world runs on perception. When presented with the same facts, even two identical twins may come up with a different conclusion. They each lead different lives.

They both live in the same world, where the same number of people have been abducted and raped. It's ultimately a factual issue.

> and that they might have reason to believe that the public perceive a government background check is more secure than a private one, and would vote accordingly (as they did).

We know why they believe the public thinks this - they spent time and money creating and advertising it.

The public might also think they have an opinion on the brand of police car, or the type of transformers used in their electrical system, etc, but without relevant data their opinions would be meaningless.

If the politicians spent months lying about one company's transformer as being a "kiddy cooker", do you think the discussion would be meaningful?

> The facts about background checks are useful to present on U/L's website or in media, but the only thing that matters to the politician will be public perception.

Right, the only thing that matters to a politician will be their own propaganda and the money they can make from it. Facts are those thing you use to judge actual effectiveness and if we tried that we'd see there isn't a problem to try to fix.

> Whether the fingerprint-based background check is better or not becomes irrelevant at the negotiating table.

Right, it's about the graft. The issues are lies and nonsense; you can't meet in the middle because there is no middle. There's common sense and there's a cash grab and there isn't a way to reconcile those.

When you realize you're being railroaded, the best solution is to not play.

If they stayed the best they could accomplish would be paying some graft for some useless services which would then become standard. (Well, if Austin needs that, so do we!) That'd make their service worse for everyone, everywhere.

> Barney Frank says, (paraphrased) ["I've never seen a politician who didn't decide what to say by seeing what would pay the most."]

They see a potential new tax base and jobs they can claim to have invented. (Fingerprinting drivers and checking that. Both require new workers, etc...) And none of the politicians care about the services offered because they already have limo service. There's no downside for them in ruining it for others.

> I think you have to come to the table with a mindset other than "you're out to get us".

So when they are out to get you, you should be delusional and refuse to admit it?

No, Uber and Lyft did the right thing. They walked away from the scammers.

The workers at the DMV don't suffer, the meter readers don't suffer, etc.

If anyone does, it's the politician whose stupid ideas and lies wasted everyone's time and money. And that's a feature.

> Enacting policies with which the public agrees helps them. It's a pretty simple equation. Politicians do not exercise any great mind control any more than U/L. Each holds their own sway, but ultimately the public decides themselves how to interpret facts.

Cough. They use your tax money to send propaganda to you, lying about the facts. They abuse the presumption that they're working for the public to push their own agenda.

Uber and Lyft have fact on their side. And if they lied, they'd risk someone going to jail.

> Whether or not Austin makes tax money or U/L make profit, and all the ramifications associated with employment etc. make little difference to me.

You just spent time explaining that tax money can be used to buy services. I knew that, but figured you might be saying it because you didn't see the other side of the equation where untaxed wages can also be used to buy things...

> Calling them unreasonable demands is your opinion.

Only if you water words down until they don't mean anything.

The city's demands are for useless measures to fix an issue that already doesn't impact anyone, and the proposition is one they make money from.

> Another way of phrasing this is you think more than 50% of active Austin voters are unreasonable. I'd say that attitude is unlikely to help you build a business there or get someone elected.

No, I think the politicians are lying which confounds the issue. The people trust them and many or all may be mislead but that's not the same as thinking that each and every voter themselves is unreasonable.

> Whether a person thinks private vs. government background checks is more useful is subjective.

That's not the issue, that's the overton-window version. Worthless checks are worthless, no matter who does them.

> If U/L feels private checks without fingerprints are just as good as government ones, then they should share more information on this through their website.

As you say, it's not about facts. Engaging on the wrong issues merely settles the discussion around those issues.

> Complaining about the decision made by Austin voters does little to help U/L at this point

I'm not complaining, I think it's exactly what the city deserves for duplicitousness. Sometimes walking away from crazy people is all you can do.

Let's say Uber is charging a really low price for their service, much less than what taxis think they can charge. Sounds fine to me. Low prices for customers!

Let's say it's so low that Uber is losing money on every ride. Well, obviously this is an unsustainable strategy. (I've heard that this is happening in some places, and my interpretation is that it's essentially marketing, to get people in the habit of using the service and working for it.) I don't know, maybe there are economies of scale that will kick in and it'll become slightly profitable for Uber at the same price? Long-term low prices for customers: sounds good to me. But let's suppose not: eventually Uber has to raise prices so they're making at least a bit of profit.

Once they do that, the taxis can presumably charge the same price and compete. And we get long-term low-ish prices (lower than the original taxi price) to customers. Right? Unless taxis' costs are higher, such that the price in question is slightly profitable for Uber, but would give a loss to the taxis. Well, then, Uber is more efficient, it'll remain around while the taxis die, and customers get long-term low-ish prices. Sounds fine to me.

If Uber subsequently jacks their prices way up, to what taxis' prices used to be or higher, then taxis (and Lyft and similar companies) can come back into the market, charge the old price or lower, and make a profit. Unless they're all colluding to keep prices high, or getting regulators to force the entire industry to so collude, competition will eventually force the price down, and most likely customers will get long-term lower prices.

The only way I can imagine a "predatory pricing" scheme that leads to high prices to the customer in the long term is if "network effects" and "economies of scale" mean that the market leader has a large advantage in supply costs; the industry might then be described as having a "natural monopoly". Then Uber might spend a lot early on to capture the market and then sit on their advantage making a large profit while charging medium prices (which are roughly break-even for competitors). Even supposing that's the case... what's the alternative?

Right now, either taxis are one big monopoly and already gaining from the network effects and economies of scale, in which case it's just one monopoly replacing another... or they're not, taxis are fragmented and only colluding insofar as they're restricting supply but not cooperating for efficiency gains. Even if it's the first case, the barrier to entry of "you don't have network effects and economies of scale" is certainly lower than "the government will shut you down", and I'd expect a correspondingly lower resulting price. In the second case, it's better, because even if Uber owns the entire market, it will be in their economic interest to charge a lower price (and produce more of the service) than was in the best interests of the inefficient taxi cartel. This is a general fact of economics:

For a firm with a monopoly, there is an optimal price they should choose to maximize their profit. It will be a higher price and lower quantity supplied than the break-even, maximum-supply result of "perfect competition"; at the optimal point, there are additional units that the firm could have produced and sold profitably at a slightly lower price, to additional customers who would have bought them--but without good price discrimination, they would also have to lower the price they charged for all the earlier units they sold, and the optimal point is where these effects exactly cancel out. Now, if the firm's cost of production is reduced--specifically, if the marginal cost at what used to be the "optimal point" is cut down, then that calculation about the marginal profit of the next N units vs the drawback of having to sell everything at the lower price gets pushed in the direction of "marginal profit", and thus the optimal point moves to a lower price and a higher number produced.