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Comment by tossacct | Hacker News Reader

>>>even if it stole all the customers of a current one

Many taxi companies are required to serve anyone at any time(24/7/365) for fixed prices, regardless of the cost of the trip. It is unlikely that the new transit service will steal all the unprofitable customers.

Many of the regulations around transportation are very utilitarian. There are people who can not drive and are unserved by public transportation, but will die if they do not have access to transportation. We the people(you too) have decided to contract out their transportation to cab companies. In exchange for this incredibly unprofitable mandate, cab companies get price fixing which is essentially a monopoly on many routes.

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Regulators want to make sure, above all, that the drivers are paying taxes and paying for the use of their vastly (and artificially) expensive taxi medallions. So the regulations tend to require the use of an expensive and finicky and limiting piece of equipment - a taxi meter. Private jitneys don't need a meter, so they're immediately less expensive. The private alternative to a meter that works as well or better for a nearly zero cost is a "zone card". Draw a stylized map of the area divided into "zones"; there's a fare for within-zone travel or a higher fare to cross some number of zones to get to another area. The zone map and price schedule can be printed on a card handed to the passenger or (where jitneys are legal) put on a sticker on the door of the car, so the passenger knows the charges before they get in.

Now the cab driver has no incentive to avoid passengers who want to cross a bridge to a less profitable area (ever try to get a cab to Brooklyn from downtown manhattan?) and no incentive to take the long way around to bump up the meter charge in slow periods - the driver's interests and the passenger's are aligned. Better yet, drivers have the flexibility that they can negotiate other fares when that's appropriate - for instance, charging more in a hurricane.

Rigidly fixed prices are NOT a good thing for customers if you want there to be service at any time to/from any region. Fixed prices mean many areas get little or no service - the cabs stick to the more popular routes and people who live in poor neighborhoods get shafted.

The regulations on cabs are not at all utilitarian - they are pure rent-seeking. Concentrated benefits accrue to the few who own medallions; distributed costs are paid by drivers and passengers everwhere.

Taxi laws are different in different places. Many places you have the option of calling a taxi company, and they are legally required to send you a cab. Obviously not NY.

Your "zone" idea is logical. So logical that it is the law in some places, like the Bay Area which is the subject of the comment you replied to.

(2) Out-of-Town Trips. Drivers are authorized to collect 150 percent of the metered rate for out-of-town trips exceeding 15 miles beyond City limits. http://www.amlegal.com/nxt/gateway.dll/California/transporta...

>>>Rigidly fixed prices are NOT a good thing for customers if you want there to be service at any time to/from any region.

This holds true for NY, where you can't call a cab with a phone. Other places you can call, and the cab is legally required to come and pick you up.

>>>The regulations on cabs are not at all utilitarian - they are pure rent-seeking

I agree that some are, but I think that I have listed some laws do service the public good. Am I wrong? NY tip: you can implement the zone system yourself on an ad-hoc basis - give them enough money and they will take you to Brooklyn. I hope you have a lot of money though :) .

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