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Comment by dismantlethesun | Hacker News Reader

Medallions (whether or not they were a good solution), were intended to restrict the number of cars on the road during peak hours, and enforce some uniform regulations on all taxis (pick up people of all races, etc.)

Uber's' innovation leads to a fleet that's easier to regulate due to constant monitoring, and pre-booking data. However, when it comes to traffic congestion, their solution is pure demand-side economics: increase prices as high as the market can bear. This means with no cap on supply, more and more cars will get put on the road to serve as part of the private fleet and it's the cities that have to bear the increased costs of road construction & maintenance.

My only hope is that rather than make cities crack down on Uber to maintain the status quo, they'll instead invest heavily in public transportation so all cities can have something on par to NYC today, and NYC tomorrow can have something on par to Tokyo.

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The creation of medallions had nothing to do with the number of cars on the road at peak hours, or regulations about race. They were created during the depression in NYC to protect jobs for taxi drivers.

Taxi licensing has been around since before cars. The "medallion" system with tradable permits may be from depression era New York for all I know, but just about every locale in the world has come to the conclusion that there needs to be a limited set of permits.

You can push the prices down a little with unlimited competition, but the few dollars you save aren't worth the indirect costs associated with taxi driver desperation: tax fraud, gouging, barely running cars, outright extortion, etc. (Of course, if the municipality decides to pad their coffers by auctioning the permissions/medallions, you get all that in addition to lower competition.)

http://www.nyc.gov/html/media/totweb/taxioftomorrow_history_...

just about every locale in the world has come to the conclusion that there needs to be a limited set of permits.

Any city that is allowing Uber or Lyft hasn't come to that conclusion, or is changing their mind. And so far, I don't see barely running cars, i see nicer cars, free water, price predictability.

> And so far, I don't see barely running cars, i see nicer cars, free water, price predictability.

Because the new ride services are using VC money to subsidize operations cost to build marketshare. The experience you are reporting is essentially a massive marketing promotion, not a sustainable service.

That's not exactly true, cities can and do still have limits on the number of cars, case in point Seattle:

hhttp://blogs.seattletimes.com/today/2014/03/seattle-city-cou...

That's true, and is what I meant by my worry that cities will crack down to maintain the status quo.

Doing so is easily done as a consequence of Uber being centrally controlled, with full tracking on all its cars. A city can trivially know exactly to the minute how many cars are in operation via Uber at one time.

However, regulation of that sort isn't what Uber wants, they want a situation where supply is unbounded and people only compete/control demand.

That's what the consumer would want too

Those cars are registered and taxed to the state, county, and city where the driver lives. These aren't scofflaws driving in from out of town- the municipalities are getting at least their fare share from the drivers to maintain the roads.

"fare share"

I assume this was an accident, but it's actually better.

Ha, Freudian slip I guess.

>and it's the cities that have to bear the increased costs of road construction & maintenance.

So raise taxes on cars to disincentive this behavior.

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