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The most important aspect of the regulated taxi market to the status quo is that all the fares are set the same, preventing competition on price/quality. Also, medallions are rationed, ensuring that the supply of cabs is always heavily utilized. The demand always outstrips supply on weekend nights and rainy days, but the market cannot adjust to meet it.

You could make an argument for the licensing of any profession. In practice, most markets get by with some basic safety regulations and reputation incentives. The licensing only serves to stifle competition and innovation.

Most rational people probably agree that the medallion caps should be lifted; they were a deliberate attempt to stifle competition during the Depression. So, fix that problem. It's not a strong argument for deregulating taxi service. The regulated taxi service has huge problems as-is without making rules impossible to enforce:

* Taxi drivers tend to be unsafe drivers

* Taxi drivers tend to rip off their customers

* Taxi drivers tend to drive unsafe vehicles

There are so many cabs on the road, it's infeasible to address this problem car by car. One thing the medallion system does is to try to inject some accountability into the market, so that there's more to lose for being a scofflaw than just one car.

Note also that there's apparently a trend towards leasing medallions on a per-shift basis instead of in long-term leases, and that trend --- which is a step towards deregulation --- correlates with a decline of compliance and and increase in service complaints.

Whether or not I believe we should outlaw shadow cab dispatcher services, I think it's easy to make the argument that there's a real risk that they will hurt cab service for most people in the long run. But I mean, as long as they keep them out of New York, Chicago, and San Francisco, I don't really care.

> * Taxi drivers tend to be unsafe drivers

> * Taxi drivers tend to drive unsafe vehicles

That's for the insurance companies to settle. It's easy to imagine that "regular" liability insurance policies will prohibit commercial transportation of humans in the vehicle.

> * Taxi drivers tend to rip off their customers

Your "P2P Car Service" rating will plummet if you rip off your customers. By the same measure, eBay and Craigslist should be blatant failures.

That's obviously true, but I think you might be missing my points. Right now, they are:

(1) If you lose your million dollar medallion, you are out a million dollars (and likely the ability to ever get a medallion again). If you lose your P2P car service rating, you do what every scammer on every online market has done since 1995: you fake up a new one and game it with BS reviews.

(2) Many of the most severe costs of running a bad car service are externalities. I haven't had a valid drivers license in (checking...) THREE YEARS, and I drive every single day. I drive in a car with invalid plates. I get pulled over (checking...) NEVER. Take me, but make me a foreigner with no knowledge of the rules of the road, no knowledge of the city I drive in, and a record of hit and run accidents. I would do just fine in a P2P cab market.

Any system that would have me as a cab driver is one we should be skeptical of.

But these are all issues that a well-established P2P Car Service could handle. Require drivers to submit a current copy of their license, insurance claim history and registration for the car in question every 3-6 months. Make this information available on the website (except driver's lastname and address or whatever for privacy). Put a GPS logger in each car (if it's not on, you don't get paid). Charge exclusively on a point-to-point basis (e.g. let the driver carry the risk of going in circles).

Fine, but these are all issues that this P2P car service doesn't handle. You basically just designed a new privatized medallion system. Plenty of car services do exactly this; it seems like you just want them to have a REST web API, so someone can build the Kayak of private car service dispatchers.

Well yeah. That would be cool.

Anyway, in a point that relates to the OP, it would be that I hope lawmakers will see this as a cue to reform and privatise taxi-regulation.

If taxi medallions cost a million dollars (one sold for $600,000 last year -- http://www.autoblog.com/2007/06/01/nyc-taxi-medallion-sold-f... ) then they are clearly an example of rent-seeking behaviour that rips off the public. Why would a taxi medallion cost $600,000? Because, due to the artificial shortage of them, you can force customers to pay $600,000 more than they'd pay if market fares operated.

No.

Suppose you make a profit of P0 in a market with no medallion system, a profit of P1 in a market with a medallion system when you have no medallion, and a profit of P2 in a market with a medallion system when you have a medallion. Then that sale suggests that P2-P1 is at least $600k, but that doesn't tell us anything about P2-P0.

Probably P1 is approximately 0, at least for someone who's already got a substantial legal taxi business, since it's illegal to operate a taxi with no medallion. So we know that P2 is at least $600k. But we know nothing at all about P0; it might be just the same, or much less, or much more.

And, actually, we don't even really know that P2-P1 is at least $600k. The person who paid that much might be an idiot (unlikely) or a speculator who thinks others will foolishly be prepared to pay even more (not so unlikely); or he may think that he'll keep the medallion for a few years and then sell it for approximately the same amount. In that case, our lower bound on P2-P1 is something like 5% of $600k per year (taking 5% as a ballpark interest rate).

So: sorry, but I'm totally unconvinced. Am I missing something?

No, you're right. What I was saying was a shorthand and an (over)simplification.

You can still have a system of cab drivers who have medallions and guarantee better service and accountability, and let the market decide on which one they want to use.

IMO unlike Chicago, San Francisco needs a lot more cabs. Every time I've been there it's been nearly impossible to try to just walk down a street and hail a cab. Never had that problem in Chicago and I assume has plenty of cabs as well.

Chicago needs more cabs too, although San Francisco desperately needs more. Talk to a cab driver there sometime; there's some huge scam involving the dispatchers and the city government that artificially reduces the number of medallions.

To be clear: my argument isn't that current regulation is good. =)

There ought to be less heavy-handed, less obviously anti-consumer methods of regulating taxi services than what we have today.

Licensing is independent of rationing. Since the main purpose of licensing is to protect the consumer - in terms of money and safety - I think we're better off with it.

There's at least one reason why it shouldn't be outlawed (well, apart from mundane things like justice, freedom and this kind of crap which is not very relevant anymore): if it's outlawed, we will never know if the model they offer is indeed better or not than the current one. If the taxi drivers believe what they say (more safety, etc.) they don't need to ban their competitors because truth will eventually emerge.

If people setup businesses offering rides full-time and those businesses perform better than cab companies or buses, who cares? If the business is full of drivers (or just a driver) who doesn't follow fair business practices it's not going to be successful. Sure, they may trick a couple people, but it won't take long for them to be shunned.

If such a company existed that could get me from A to B at half the cost of a regular cab and they had a decent reputation, I'd use 'em. Hell, I wouldn't even care if the vehicles had been inspected recently; I can wear a seat belt.

Who knows if it would even be a viable business; maybe none of the companies would do a good enough job vetting drivers or provide enough protection to get enough business, but the market should be allowed to decide that, not a bus company. If "Bob's Taxi" existed, I wouldn't care, so long as they weren't outright lying. If they said, "Hey, we don't have as many consumer protections or regulation as regular cabs but we're cheaper." I would have no problem with that at all.

Easy: because many of the problems the bad businesses will cause are externalities.

Your argument as stated is, "we should eliminate all taxicab and car service regulation". I assume you want to refine it a bit more. At the very least, if that's your stance, you can no longer argue that it is crazy for the state to shut down services like this: first, pass the law that deregulates cabs, then start the shadow taxi dispatch service.

No, I kinda like it the way it is actually. Look, I think cab regulation is a good thing; let it be regulated. Despite the inherent inefficiencies and abuse that comes with any sort of regulation, I'm sure it helps consumers by providing strict rules for cabbies and cab companies.

Except, we're not talking about a Cab company because it's not licensed as one. If I want to drive people around in my car all day for a fee and I put an ad in the newspaper that says "Tom's Kinda Cab Company; I Drive You Places" why should that be illegal? If someone asks "Is this a regulated cab service" I say "No, but it's half the price!" Either they use my service or they don't. If I get turned down by so many people that it's not viable employment, I guess it's time to look elsewhere.

And, perhaps I'm being naive here, but I have no reason to believe that if I were to provide a horrible service that it would somehow affect the bottom line of Yellow Cab. I'm all about giving people choices and letting the market decide. If you decide to order a cab from some deregulated company you've never heard of and you get kidnapped and tortured instead of driven to the bar, well, that's your own fault. It's certainly not "all the cab companies'" fault. And that cab company probably won't be around long.

I think I mostly agree. But then, we're talking about a condition that assumes PickupPal fails as an enterprise. If they succeed, and this is forced to scale, then there's a real issue.

My original argument is really just that "it's not crazy for there to be a legal concern about this service". I think my argument is holding up OK.

I have all sorts of concerns about such a service, I just don't think Government should decide if I get to worry about those concerns or if they'll just eliminate them for me by taking away the choice in the first place.

And, no, I would not classify a legal concern in this matter as "crazy."

"Hell, I wouldn't even care if the vehicles had been inspected recently; I can wear a seat belt."

Crashing isn't fun. I'd rather pay twice the price for a regulated licensed taxi than getting one off the internet :/

And that's your prerogative and I think you should 100% be able to do that.

Do you think practicing unlicensed plastic surgery via the internet should be fine also? If it's half the price?

You have to draw lines to protect the public.

I think that's perfectly fine. Probably not an option I would elect for were I seeking plastic surgery, but that's neither here nor there.

I am sick of those lines. Those lines have caused me to lose the ability to smoke in a bar (or basically anywhere else) for christ sake. Those lines have created "helmet laws" and all sorts of "protect Joe from himself" bullshit laws that exist for the sole purpose of annoying me, near as I can tell.

Nobody makes Joe sit at the bar any more than anybody makes him get in my Cab (which I intend to use as a battering ram). If, in the course of my cabbing, I were to break an actual law (speed limit, driving uninsured, etc.) then I should be punished. Until then, let me drive recklessly and force small talk with strangers in peace. If you don't let me do that then you've created a law to protect Joe from his own idiocy which is bad enough, but you've also ruined a perfectly good market opportunity.

Once you have kids, who might mistakenly choose an unlicensed unsafe taxi over a safe one, you might change your mind. Especially if it's your daughter - rape by unlicensed taxi drivers is a real risk.

This isn't about protecting joe from himself, it's about protecting vulnerable people who might make a poor decision just to save a bit of cash.

Similar to smoking - it's an expensive addiction (For the smoker and society) and should be actively discouraged. Also it's kinda nice not to have smokers blowing their smoke in mine+my kids faces any more.

My partner's reaction to this was similar but converse: "finally, hitchhiking murderers no longer have wait out in awful weather!"

I mean, this is all hyperbole today. Do I think this is the way deregulation should work, with someone just up and deciding to ignore it and forcing some ad hoc response? No. Do I think it's a big enough deal right now to waste time outlawing? No. Would I fund it? No.

You do realize that usually its the hitchhiker that gets murdered by the person with the car.

Yes, I believe that is his point, and the reason I used the word "converse". :P

> rape by unlicensed taxi drivers is a real risk.

Well, I'd say it's as bad as rape by licensed taxi drivers.

Not around here, but ymmv.

"minicab rape" was a frequently enough occurance in London that there were frequent public service announcements before movies just last year, asking people not to take an unlicensed cab, showing how you risk getting raped otherwise. ("minicab" here is any other cab than the usual bulky black London cab).

I don't say this very often, but: Are you insane?! First of all, any argument that starts with "Once you have kids" isn't an argument at all; I knew I should have stopped there and saved myself money on blood pressure medication.

Secondly, why is it the Government's job (or anyone's job) to "protect vulnerable people who might--" okay, I can't even do this. That phrase means the same thing as "protect them from themselves" -- the individual makes a poor decision which affects the individual. Since it falls to a parent to make responsible decisions for an ignorant child, you've once again failed to make a point. "Once" I have kids (I like your finality), I will probably make sure to avoid having them raped to save $10. I could be wrong.

As for smoking, it is once again an individual choice. Were there no smokers, I'm sure there would be others ready and willing to use tax dollars to pay their medical expenses (which I have never done, and since I've given years of service to this country everyone can fuck off anyway). If a private establishment decides they wish, for whatever reason, to permit smoking on their property, that is a right the company rationally deserves and in no way warrants regulation by the Government or any other regulatory body.

If you prefer non-smoking establishments, show it with your wallet. If such a time came when it was detrimental to a business to afford said luxury to smokers, they would stop. What you feel is "kinda nice" should not warrant a law. It's called personal preference and we all have it. If all of my personal preferences were turned into law, there would be many changes to the world, most of which many people would conservatively call "cruel and unusual."

"the individual makes a poor decision which affects the individual" - except in the case of smoking where the poor decision also affects anyone else in the vicinity of the smoker, including those who have chosen not to smoke.

Everyone else in the vicinity of the smoker chose to be there, knowing that person was smoking. Back when it was legal, there wasn't some great mystery to it; you went to a bar where smoking was allowed, people were probably smoking. It's not like they waited for nonsmokers to fill up the place and all lit up in unison, attempting to lower life expectancy by a few seconds.

The smoker is smoking; a poor decision that affects them. You're in a smokey bar; a poor decision that affects you. The only difference is the smoker isn't complaining. There's no sense complaining about a situation one puts themselves in; there's even less sense in making laws which attempt to keep people from putting themselves in said situations.

A private establishment could force compulsory games of Russian Roulette for all I care. As long as there's a sign on the door.

I see, it was really the non-smokers making bad decisions - they should have all stayed at home.

Nice Bulverism Logical Fallacy:

http://en.wikipedia.org/wiki/Bulverism

No, you don't have to protect people from their own bad judgment. There's an argument for better parenting, not for cartels protecting themselves through regulation.

Don't tread on me.

Yeah. Also, fucking stop signs.

How does a heavily regulated industry survive when it's forced to compete with deregulated competitors? Look how much better the LC carriers do than United and American. And that's just price deregulation; Southwest still has a crushing regulatory burden.

Short term, I agree, PickupPal is not the end of western civilization. But the "pitch" behind this service is basically the total deregulation of car service.

They'd compete the same way they always do... by providing something (guarantee, etc.) the deregulated companies can't. It'll cost more to be "regulated," but that cost is passed onto the consumer. If the consumer puts X guarantee about price, boom, competing. If the consumer doesn't then that means X guarantee isn't necessary and it's time to stop being "regulated" before they go out of business.

Then again, even if regulation doesn't help at all, it's still a name; something familiar; something proven. Why do people by OEM hardware packaged by a familiar company at twice the cost when they could just buy it OEM?

And, as you can see with United and American, the other thing they always do is fail. The answer to "how do you compete when you have a huge regulatory burden that a competitor providing the same value doesn't" is, you don't. And again, that was just price and route deregulation. Southwestern still has to comply with the FAA.

There's no regulation a PickupPal driver needs to comply with. You can't start a nail salon without jumping through more hoops than a cab driver would to sign up for this. How do you even tax it?

I'm not sure what you're arguing here. I don't disagree that if two companies are providing the same value and one has no regulatory burden, that company will succeed while the other will fail. That in no way proves that deregulation is bad, it merely proves that regulation was, apparently, unnecessary in that instance.

I just don't see the debate here. If you provide X under regulation Y and I merely provide X, if the average consumer doesn't care about regulation Y then you will fail because I can afford to provide X cheaper than you. If the average consumer only feels warm and fuzzy with regulation Y, I will fail because we are obviously not providing the same (perceived) value.

All your Southwestern analogy proves is that price and route regulation is really stupid and wasteful.

But if they're going for regulation, they're going about it entirely backwards. You don't start with a regulated service and deny others entry. You begin with an open market, allowing sites like these, and then other people create a niche business of offering reliability through the same venues.

Right? What am I missing?

That the phenomenon you're talking about happened like 70 years ago.

Aha! Color me ignorant, then, that makes sense.

:)

What? There was a thriving free market and suddenly the public taxi-regulation-and-rationing scheme out-competed everyone else?

No, there was a thriving free market and the public taxi regulation scheme shifted the negative externalities that it was empirically observed to generate back onto the cab companies.

Regulated businesses don't "outcompete" unregulated businesses. That's why they're called "regulations" and not "features". You can argue that regulation is stupid, but:

* We won't settle the argument, because every point you make about competition I'll respond to with a negative externality, like, "anonymous unmarked drivers killing people by running red lights".

* You won't be refuting my original argument, which is that states are not crazy for getting upset by PickupPal.

Taxi regulations generally involve limiting the number of taxis. This has two effects (1) they are more expensive than what a market price would be, and (2) you can't always get a taxi when you want one.

So taxi regulation definitely cause drawbacks to customers. Do these drawbacks outweigh the advantages that you enumerate? This could be determined experimentally, by allowing unregulated taxis to offer their services in the market alongside regulated taxis. Unregulated taxis would be obliged to clearly state that they were unregulated, and customers would be able to choose between the two.

If proponents of taxi regulations are right, customers will choose the regulated taxis over the unregulated ones.

That is a gross oversimplification of taxi regulation. You're just fixating on the one regulation that we all agree is ill-considered.

Surely my argument is more general than that? I.e. it applies to more things than just limiting the number of taxis.

A regulated taxi system will differ in some ways from an unregulated system. (If it doesn't then the regulation is so light-touch as to be virtually non-existant.) For example the regulated taxis might have safer drivers, or be less likely to rip off customers, etc.

Because regualted and unregulated are different, people will have preferences one way or the other. If an unregulated system is allowed to operate side by side with a regulated system, then each customer will be able to choose which one they buy from, like choosing which supermarket they shop at. (Obviously for this to work it must be easy to tell which is regulated and which unregulated).

So if people prefer a regulated service to an unregulated one, they'll continue to choose the regulated one even when there's a choice, won't they?

Perhaps you'd like to elaborate on why you think I'm making a gross oversimplification, because I think my argument applies to any differences between regulated and unregulated taxis.

We need to inject competition back into public transportation, but keep some of the regulation. I think that share-taxis are an important piece of the public transportation system that is missing in the USA and Canada:

http://en.wikipedia.org/wiki/Share_taxi