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Comment by cm2012 | Hacker News Reader

cm2012

Incredibly dumb. Taxi drivers have not ever been employees, what's the difference now?

The difference is in the power imbalance. Taxi drivers hold much more power and control over their ability to earn compared to Uber and Lyft drivers.

No they don't. Taxi drivers are exploited end-to-end. There's a reason why the medallions eclipsed a million dollars in price. The drivers have to lease their cars on a daily basis, and start at around $160 leasing fee in the hole. They're driving for many hours before they start making any money at all. That's not "power and control", that's getting totally screwed. And every Uber or Lyft driver who has ever driven taxis before will tell you that.

Just because taxi drivers were exploited it doesn't mean Uber drivers aren't. They are exploited in different ways.

I don't know about other major cities in California, but in San Francisco, taxi medallions were free until Gavin Newsom decided to "monetize" them in 2010. After that the city sold them for $250,000 each while providing low interest loans (via a local credit union) so drivers could pay for them. When Uber and Lyft arrived, their drivers didn't need medallions and there were no limits on how many drivers either company could have on the street. The medallion system collapsed and those who took out loans for them did indeed end up getting screwed.

They were "free", but they've always been supplied lower than demand (that is, the number of permits grew slower than the population's need for taxis did), an arrangement that worked well for cab drivers since it allowed less competition, and a profitable secondary market for the medallions. Lyft/Uber/etc gutted that demand.

Not saying 'good' or 'bad', just, you can't blame the city for the price of the medallion; it already had a high one due to the demand outstripping the supply. Makes sense that the government would seek to profit when it supplies them, given that.

>Not saying 'good' or 'bad', just, you can't blame the city for the price of the medallion; it already had a high one due to the demand outstripping the supply. Makes sense that the government would seek to profit when it supplies them, given that.

I can certainly blame the city for letting the demand exceed the supply. Irrespective of 22 Uber et all was a well deserved comeuppance for the taxi industry.

>while providing low interest loans (via a local credit union) so drivers could pay for them

That's better than most predatory lending around these medallions in other cities.

>The medallion system collapsed and those who took out loans for them did indeed end up getting screwed.

Unless there was some wording in the medallion law that would prohibit competitors from entering the market or set a buy-back value, I don't think anyone was screwed. Risky assets imply... Risks!

Have you actually talked to taxi drivers about this? Pre-plague, I've talked with hundreds about their views on their work, and at least dozens about Uber. Were cab companies beloved? Mostly not. Did drivers see themselves as being "totally screwed"? Definitely not. And they almost universally despise Uber.

The daily vehicle rental approach in their eyes has advantages. Number one is zero capex. Number two is predictable, controllable opex. Number three is a hard cap on the number of drivers on the road, meaning they have a good idea of the supply/demand balance. Number four is competition; if they didn't like one cab company, they could switch to a variety of others. And number five is regulation: if they were having issues with a cab company, they could take it up with the taxi commission.

Contrast this with Uber/Lyft, which is a dupoly with almost no regulation, few constraints, and which has shifted core capex and opex onto drivers, as well as most of the risk. With power and incentive to push driver pay well below sustainability. And of course a history of labor exploitation and the willingness to spent approximately infinite money to lock that exploitation into law.

Have you talked to Uber drivers? Did they see themselves as being “totally screwed”?

AB5 was written by a union. Not by Uber drivers.

I have talked with quite a number of former Uber drivers. And I've kept an eye on the declining amount Uber drivers are making, and how Uber has shifted much of their business risk to the working poor.

You might consider that an Uber driver is not going to be frank with an Uber customer about how shitty Uber is. Or frank with themselves, honestly.

Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).

The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.

Also, the argument on Uber/Lyft drivers not being contractors since they can't set their own rates and decide which ride they take strikes me as weird since medallion drivers were contractors, had to charge the price set by the city and could only pick-up customers in the (arbitrary) zones covered by their medallions.

And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).

[0] https://news.ycombinator.com/item?id=24225648

No doubt, many taxi drivers have been getting screwed over by the current and pre-ride-sharing state of the industry.

I'm a big believer in incentives and how they influence behavior.

For better or worse, ride sharing systems have put drivers in a situation where they have to provide amazing customer service, and due to supply pressures, the price has been falling to levels that make it difficult to make a living.

Before ride-sharing came along, cities had set the rates to protect customers from being gouged. I think they can safely remove the ceiling now. They may have to set a minimum per-mile rate to protect drivers now (if they aren't doing already doing so).

> the price has been falling to levels that make it difficult to make a living

I'm really curious to know how much drivers are making. I recall when Uber arrived, a lot of guy driving taxis (not medallion owners but renters) were really happy to switch over.

AB5 has this paternalist (and somewhat racist) undertone that drivers are too stupid to know how much it costs them to operate their business.

That's not a very good argument though. The question is: will it benefit Uber and Lyft drivers to become employees?

Whether taxi drivers have ever been employees is not relevant.

The answer to this likely depends on different drivers. Maybe a single blanket policy is not the answer.

Taxi drivers have unions through which they have pressurized government to create unusual barriers to entry. Thus they become rent seekers.

Also in many cities like NY, the taxi driver is not the owner of the taxi badge, since a badge costs upward of $300K it is often owned by some rich guy/company and taxi driver is basically a contractor treated even worse than Uber and Lyft's drivers.

California's move to force Uber to change agreements of its employment is nothing but a move to create new kind of rent seekers.

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