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Comment by optimuspaul | Hacker News Reader

What would it mean for the taxi industry to be liberalised?

At least in many places in Europe (but I think it's also the case in some cities in the USA) you need to get a taxi license to operate which is pretty anti-competitive. I agree with the parent that I would prefer if we had some stringent regulation for taxi businesses but the license system would be phased out to open the market to competition.

Unfortunately taxi drivers can resell their licenses, and they're pretty damn expensive (in the hundreds of thousands of euros in Paris IIRC) so the license owners obviously very staunchly defending their investments and taxi companies their de-facto monopolies. Besides taxis can basically shut down all traffic in the capital (and they're not particularly civil about it either) when they go on strike so the status quo endures.

Where I live, starting a service like uber requires an appropriate drivers license and insurance. No licenses, nothing. (But you can't pick people up off the streets, that is something else, and licensed).

As result, there's many services like uber — but uber themselves is banned, because while the German government was willing to ignore the commercial drivers license requirement, they couldn't ignore the insurance requirements that Uber refused to fulfill.

Yeah I think there's a similar "loophole" in France but since everybody has a smartphone these days many taxis feel like it's unfair competition anyway. I'm kind of torn on this issue frankly, on one hand the taxis have had a de-facto monopoly for decades and as such ended up with a rather high price for a sub-par service so I'm glad uber shook them up a bit. On the other Uber is clearly playing dirty and we might end up being worse off in the end if taxi drivers don't manage to earn their life decently while most of our fare money ends up in some tax heaven never to be seen again.

> As result, there's many services like uber — but uber themselves is banned, because while the German government was willing to ignore the commercial drivers license requirement, they couldn't ignore the insurance requirements that Uber refused to fulfill.

The German government had nothing to do with it. The lawsuits were brought by Uber's competitors under §3a of the Unfair Competition Act [1], which prohibits violating laws in order to gain a competitive advantage. They have standing under §8 (3), item 1, of the same law. The courts had no choice but to rule in their favor; it was pretty much as open and shut as a civil case can be.

[1] https://www.gesetze-im-internet.de/englisch_uwg/englisch_uwg...

Correct, but the federal government offered to reduce the requirements for running this service for all competitors on the market, according to Dobrindt.

Oh, it appears I misunderstood you. Yes, the federal government was willing to review the regulatory requirements, at least in principle. I was focusing on the last subclause of your sentence.

This happens for a reason. If no licenses are required, the market will be flooded with more offer than demand. Also the environmental impact, traffic jams, etc.

Demand meets need naturally. That’s how all other businesses works.

The point is that taxi is not seen as a pure business. It is seen as a part of infrastructure. Elderly or disabled people should have a reliable way of transport. The goal of the regulation is that taxi companies don't only did lucrative rides (from the airport to träfe fair) but also less lucrative rides (from one's Appartment to the doctor few blocks down) and provide enough (realtively cheap) capacity even at uncommon times (4am or such)

So why are taxi licenses/medallions necessary to add regulation? To provide an incentive to do the right thing? Can't you just fine bad actors up the wazoo and accomplish the same goal?

The article is about the EU, I'm not sure I've heard of medallions outside the US. It's certainly not the case in the UK.

> It is seen as a part of infrastructure.

If that's the case, why aren't taxi businesses owned by the public? What makes taxi services different than water, sewer and municipal bus systems?

We have taxi services monopolizing entire markets just like ISPs (http://dailysignal.com/2016/10/19/taxi-monopolies-hurt-oppor...). These "Technically public but actually privately owned" business model appears to be the worst solution for any sort of consumer of these services.

It's the American solution, however.

At least in my town (Munich) running busses from technical POV is done by private companies, following schedules setup by the city. The question there is who does the investment and what happens the bus after a few years.

For taxi private operators can make a business by offering additional services over the mandated taxi business (chauffeur services, longer term scheduled pickups, rides between municipalities, ...) The full picture is complex, though ...

Yeah, it's definitely more complex than I'm making it out to be, there will always be "boutique" offerings on the fringes of public markets, but if 90% of people need a service to be productive in the community, the answer should be to take it off the market.

I recently spoke with an elderly woman in San Francisco on exactly this subject. She regarded Uber as the best thing that's happened to her life in the past decade. It enables her mobility in ways that taxis never did.

This is hard to argue. For one since American perspective is different from my German/Europe and that's an individual, not a larger perspective on society.

The key difference, I think, is that in your background taxis are an affordable and reliable source of transportation services for all. They provide peak and off-peak services, for routes lucrative and otherwise.

The American experience I have had with taxis is that taxis are expensive, unreliable, and will try to ditch you if they deem your destination insufficiently lucrative. When you need them most, there's a very good chance that they won't show in a reasonable timeframe... or show at all. Which is to say that they avoid providing as many of the society-level benefits you describe as possible.

San Francisco in particular was a hell of useless taxis. For a long time, calling dispatch to get a taxi left you with odds of under 50% of one actually showing up.

From my visits to the U.S. I understand some if the disfunctionalities of U.S. taxi systems, similar to most other U.S. infrastructure, while not having deeper insights. This ruling is by an European court about European markets, though.

The reasons taxi licenses were used is because governments heavily regulated price. Those sorts of price controls distort or destroy the natural market.

> Demand meets need naturally. That’s how all other businesses works.

Does this hold when the cost per mile/kilometer is still the same?

There's this thing called externalities and it's foolish to ignore them.

The market will eventually adjust and demand will come to match supply. That the "market will be flooded" is a terrible argument to justify passing anti-competitive regulations that are bad for consumers and the economy.

Hence my call for stringent regulations (working hours, insurance, emission limits, minimum price for fares maybe). This way you prevent a complete race to the bottom while still letting competition do its thing. I'm annoyed that nowadays everything is polarized between basically full communism or laissez-faire ultra liberalism (not talking about your comment specifically, just in general). We seem to have forgotten about compromises.

Sweden is a country with a deregulated taxi industry. The only regulation remaining is a requirement of a commercial taxi driving license (which is an only slightly more rigorous test), and consumer protections such as requiring an approved taximeter installed and having pricing comparison information posted in the window in a standardized format.

The Swedish taxi market is not flooded, prices are not dumped, there aren't traffic jams. The major complaints are about tourists getting scammed by overpriced taxis (where the prices are legitimately posted in the window as super expensive) since they aren't prepared to have to compare pricing between taxis since everywhere else prices are regulated.

Sweden has about 9 million of inhabitants in the whole country...

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