Boston Cab Dispatch queues up to sue Uber | Hacker News Reader

Boston Cab Dispatch queues up to sue Uber

bizjournals.com

15 pointsilamont49 comments

Ever tried to order a cab in Boston/Cambridge? I've missed two early-morning (i.e. before the subway starts running) flights because the cab I arranged 48 hours ahead of time never showed up, apparently because they didn't feel like it. Uber isn't "unfairly" replacing a functioning taxi service in Boston. They're simply the only game in town if you actually need to get somewhere.

I am often at MIT and after being burned a few times I completely switched to Uber for all my travel there and it has been nothing short of awesome.

How does Uber compare, price-wise, with taxis?

I've personally used the black car option more than the taxi option so as you would expect, always more. Most rides I took were ~$15-20 Cambridge-Back Bay. For business travel there I'm considering reliability and consistency as worth the extra $.

Why are "black cars" more? What is the difference?

I just assumed a black car was just a taxi that was unlicensed with the city (so couldn't legally call its self a taxi).

Also $15-20 is insanely cheap. I took a black taxi in London, less than 30 minutes (20 of which was traffic), $55.

A black car in US usage usually means a Lincoln Town car or similar, basically a non-stretch limo. Uber has several classes, including Hybrid (cheaper) and SUV (more expensive).

They also have crazy union rules where a cab is only allowed to pick up in the (tiny) area it's chartered in. So if you catch a cab from Cambridge to Boston (across the river) the now empty Cambridge cab is not allowed to pick up anyone in Boston but is supposed to drive back to Cambridge empty to find a new fare. Same goes for Somerville, etc. Rules like this further reduce the availability of cabs and make getting around unpredictable and super frustrating.

If you're in Boston, arrange with Metro Taxi. They're quite reliable and on-time. If in Cambridge...yeah, good luck with that.

I love how the US claims to be the home of capitalism but yet to the casual observer lack of government intervention seems to result in a /less/ competitive capitalist market.

For example, two or three broadband providers, two or three cable providers, one or two taxi companies, three large cellular operators, just a small handful of insurers, one children's toys company, etc.

Seems like the US's capitalist model is great for big corporations or whoever the incumbent is but terrible for real grass roots competition. You want to go out and start a new business today there are simply tons of sectors you cannot compete in at all.

Technology has been largely immune to this but patents have crashed that party and with trolls everywhere a lot of smaller businesses are shutting their doors when threatened.

The US seriously needs to up its game. They need to say "no" to corporate money and actually encourage/force competition. This is why the US is losing its competitive edge to China.

I think you're getting the wrong idea about this. These Taxi companies (of which there are many in Boston, not one or two) want to sue precisely because they have something like a government-granted monopoly. The problem here is government intervention, not lack of it. Taxi medallions are worth about $500k in Boston because the city limits the number of taxis and has outlawed Taxi companies from other cities picking up passengers.

How's that for lack of government intervention? If there was no government intervention here Uber would be free to do its thing. But thanks to the Boston government the taxi rates are high and there are never enough taxis to serve everyone.

> because the city limits the number of taxis and has outlawed Taxi companies from other cities picking up passengers.

And why do you think that's the case?

The same reason architects are forced to knock 10 stories off of every building constructed here. The Boston City government has no interest in overturning arcane zoning laws that force companies to provide it with concessions (or kickbacks) to get anything done. And this bad behavior is supported by myriad neighborhood groups from the wealthier areas of the city who want to preserve the city as a quaint little museum sitting on the front steps of their Beacon Hill and Back Bay brownstone mansions instead of letting the city grow. See: Shadow Laws.

Do you think it's possible that the few major cab companies are also very much in favor of laws limiting cabs? Perhaps in favor enough to help keep certain people in office?

Of course the taxi companies want to protect the status quo. Imagine if you had to invest half a million dollars per employee so they could legally operate and then some company claims they don't need to abide by the same system. Nobody wants their investment devalued. But if you think these companies care about keeping Menino in office, you're mistaken. They engaged in a decades-long legal battle to increase the number of available medallions, the limits of which were set in the 1930s.

Many of the people with medallions have not invested a half million dollars, they have just had them for a long time and have greatly profited by selling them off from time to time.

Is it though? I mean Boston city aren't the one doing the suing here. It is the large private companies who are being beaten at their own game.

Plus as other posters said elsewhere, a lot of private taxi companies actually intentionally push for rules which protect their market. So they're essentially buying off local politicians who then pass rules so smaller business cannot join in for "public safety" or similar.

The government-granted "monopoly" here has forced medallion prices so high that of course the companies would sue to protect the investment their drivers make (which they subsidize). They're like a union in that sense. Each medallion is a huge investment because certain neighborhood groups have fought for decades to "preserve" Boston by never increasing the number of medallions. And yes, because of the investment it has become self-perpetuating, with taxi companies protecting their own interests by not being in favor of increasing the number of medallions either.

No matter how you look at it, if there weren't medallion limits in the first place there would be healthy competition right now. There are many natural monopolies. Hackneyed carriages (their official name here) are not one of them.

Lobbying to pass off regulation is the ultimate form of capitalism.

That is crony-capitalism. Capitalism without government intervention/regulation = free market. Of course I will always advocate for private property protections etc. base protections.

Capitalism and interventionism are orthogonal in purpose, although interventionism discriminates against some capital enterprises and for other capital enterprises.

Buying off politicians who make rules is about as far from "laissez-faire" as you can get. Lobbying regulators and politicians who make big Federal-sized rules just the same thing, but at scale. But with regards to market segmentation, economies of scale may make it easier (and presumably more efficient) to run several large, rather than dozens of small organizations.

I love how the US claims to be the home of capitalism

It is, but the largest corps and for the richest people. Try stepping on their stones and you're fried

It's the age-old discussions of what we can and need to do about corporate monopolies.

Just look at what Honeywell tried to do to Nest. They had grown complacent doing what they always did, and suddenly they woke up to a new competitor with an enticing proposition.

It's fucking unbelievable to me in 2013 that there are still so many businesses who just don't get it. Y'know your profitable 20th century business model? The internet is coming for it, and you can either get on board or you can get crushed out of existence.

I just can't fathom why these idiot cab companies wouldn't just copy the service that Uber provides, which is a really basic idea nowadays.

Build an app that summons your cab. Problem solved. Competitor thwarted. Stop trying to hide behind lawsuits or you'll end up just like these sad sacks in the music business.

From what I've read, the taxi companies are mad that Uber's cars are acting as taxi's, but aren't paying the upfront cost to get a medallion, use a meter, that sort of thing. It's not the app that is causing problem, it's the unfair playing field.

I'm totally down with that part of the argument, but wouldn't it be a complete non-issue if it were as easy to hail a normal cab as it should be in 2013?

Especially when you consider that they're not going after Hailo, who are operating in Boston. Hailo's drivers are licensed taxi drivers.

I find the two companies to be really interesting: they're both competing for roughly the same space (especially now Uber switched to a meter rate model in Boston), but Hailo takes a much more 'softly softly' approach. I suspect one reason for this is that Hailo's been co-founded by taxi drivers, so they're probably more sympathetic to existing market concerns.

That information is in TFA, but you have to click over to the second page of it to read it. That pisses me off just as much as the taxi companies using protectionist tactics to protect their outdated business model.

Decisions to bury important information like the legal reasons of why the taxi companies are suing is why I think that most media companies are fundamentally broken.

I'm no student of journalism, but shouldn't best practice include guidelines like: "Make the best case for every side of an argument as soon as possible in an article. Do not bury important points that could be made early on in order to force the reader to turn the page or give the impression that one side is being favored."

Paragraph 4 on the first page:

"The taxi company argues Uber operates a taxi service without bothering with any of the rules and regulations that govern the industry."

I too hate the page breaks in order to get more eyes on more adds - but this article seems fairly balanced to me.

Granted, they put that vague line in there on the first page, but really all of the meat that made the taxi companies look like greedy corporatists protecting their turf was on the first page.

I still think that slanting articles - whether it's to get ad views or whether it's to express the bias of the reporter/publication is highly unethical and should be called out wherever possible.

"Unfair playing field" is exactly what taxi companies have built for themselves erecting government hurdles to keep out competition. Why are medallions necessary to protect the public? They are not. They are necessary to protect the above-market rates charged by the taxi companies.

As a regular HN reader the number one thing I've learned about business from the comments people post here is that every business is so nuanced that applying sweeping generalisations without any domain knowledge is ultimately pointless. HN has so many smart, knowledgeable and experienced people in every business you can imagine that you should take the opportunity to learn why Boston Cab Dispatch are doing this. Furthermore the issue Boston Cab Dispatch has (as explained in the article) is not that Uber has an app, it's that Uber is breaking cab regulations that Boston Cab Dispatch must abide by if they want to continue to operate.

    Barenholtz pointed out that Boston Cab also has a smart phone app, 
    but nevertheless has to comply with industry regulations.

If those regulations actually protected riders and cabbies instead of entrenched cab company profits, don't you think Uber would have folded by now under the weight of consumer complaints? By giving the rules a run-around, Uber has done a great job of proving the hypocrisy and self-serving nature of those rules in the first place.

Taxis have existed for more than half a century, the current regulations are built around the current model and are the culmination of over 50 years of knowledge, to discount the value of those regulations because a new company is having success by ignoring them is a mistake, just like it's a mistake for the regulations to not be revisited in light of the options new technology is creating.

What Uber is doing is interesting but there are real problems that need to be addressed, labelling every opponent in the business as "idiots" ignores the problems. Let's say hypothetically Uber becomes the biggest source of taxis in Boston, they drive out the incumbent "idiot" companies[1] that can't compete with the service Uber provides and then once Uber has an 80% market share they decide to increase their prices 50%? They decide to ban rides of less than 1 mile because that is hurting their bottom line? They decide that if you want to ride in an Uber cab you need to provide ID and have your fingerprints taken in case of crime? If they're a company built around ignoring regulations and have effectively killed all alternatives, then what? People can't just boycott Uber, because they have no other choices.

The current taxi companies cannot compete with Uber; if they try to they will lose their licenses to operate and they're not big enough to swallow the losses and evolve into an Uber alternative... by ignoring regulations Uber is making it impossible for anyone to compete. The regulations now are not perfect, as many articles have explained there are problems with them (such as restricted licensing to operate, huge start up costs...) but just ignoring them is not the solution.

As others have pointed out in this thread, there are ways to innovate within the taxi business while respecting the regulations and there are businesses doing that now, if Uber wants to genuinely protect consumer interests in the long term they should be pushing for the regulations to be addressed; not ignoring them and putting consumers at risk in the long term.

[1] Companies that have identified the regulations as not being perfect.

I agree about not throwing the baby out with the bathwater, however what prevents other Uber-like competitors from popping up to compete with the evil-Uber you describe?

How do you capture the market in taxi rides in an unregulated market? It isn't like a telecom where there is only so much physical infrastructure.

The regulations are not there to protect consumers. They are there to protect the existing cab companies from competition. It is instructive to note that it is not the consumers who are suing Uber, it is the cab companies.

Yes, it very likely that the regulations have worked great so far and that the customers have gotten used to its benefits and accept the status quo as a given natural state of nature.

Its very unlikely that customers will complain if a law isn't framed and they are enjoying a benefit. Customers will complain later though, once something goes wrong.

You can have a general law against monopolies (or near monopolies), e.g. if a company gets 80% of the market share, then the company is regulated. You don't need to proactively use regulation to prevent that from happening, because the chances are that the regulation is not necessary and factually speaking decreases competition.

If the internet is going to crush your business by avoiding rules you are legally bound to, then yeah, I think you have a right to complain.

Uber (or whoever does Uber's PR) does a fantastic job of making every single one of their legal problems look the same. They really aren't.

Cab companies and local government have had a good thing going. The cab companies pay the government big fees and in return the government keeps out competition, forcing consumers to have to pay above market rates. Uber threatens this model and this is why they are having legal problems.

While I am all for internet enabled disruption, what about the local laws that Uber and other IP/Mobile-web services do not follow?

Private sedan services are still limited by the local cities regulations, and this is not a bad thing. Localities deserve the rights to regulate themselves.

Where we obviously get into mud, is where the local commercial establishment thinks it's income is a prerogative of participating.

Local regulations worth adhering to, that do not break contract law: What about maximum fares? What about legislated accuracy of meter/GPS for billing? What about posted signs for reasonable health precautions, like smoking? like the local licensing board for complaints (oh wait you don't have licenses....)

Not that I am establishmentarian, but it is completely unreasonable for a market disrupting services to NOT follow local regulations for said given commercial activity.

That being said, one does not have to be a big business to be able to give a random a ride. However, cabs of today are shaped and outfitted with specific hardware for obvious reasons.

The purpose of government is to preserve liberty. For example, government should protect citizens from mafia-style extortion where people are forced to pay protection money in order to practice a certain occupation. But when government becomes the mafia, when it extorts money from people in who want to practice an occupation, as it does with taxi services in boston, then government is acting illegitimately.

This isn't an answer to the question though, if anything its a gross over simplification of the role of government.

Incidentally, iirc the mafia used to be interested in cab companies, since it gave them access to controlling unions and a lucrative cash based economic niche.

When the established industry starts suing you, you know that they're starting to become scared of your disruption.

Or they're pissed that they're playing by the rules and you are not.

Well, they spent a lot of money buying the rules.

My brother was driving his beater as an unlicenced hack in Baltimore for a year. I observed a number of issues.

I think a barrier between the passenger and the cabbie is generally good.

I think a meter system or a zone system that is externally verifiable is better than some dude's cell phone.

After you spend 40-60 hours in one week schlepping people in your un-designed hack, an understanding will form of why modern cabs have fairly universal accoutrements.

Greater Boston is mostly non-barrier cabs, but I don't recall the specifics for Boston proper vs Cambridge, etc.

I was referring to the idea that the medallion in Boston is a safety feature rather than a monopoly piece.

I guess the US (or at least Boston) has nothing like "Mietwagen mit Fahrer" [1] (German for "rental car with driver", usually called "Funkmietwagen", something like "radio called rental car") as that seems pretty much what Uber is doing here?

We have Taxis that are official and thus are allowed to drive on special roads, can wait for customers in public places and have a big Taxi sign. They are usually more expensive.

The "Funkmietwagen" are only allowed to drive where everyone else is allowed to drive, they can't wait for customers and can only be called by calling their central number and they don't have the sign. As they are less regulated and don't have to pay for being a taxi, they are usually cheaper.

The only major requirement for Funkmietwagen is the "Führerschein zur Fahrgastbeförderung" [2] (license for transporting passengers).

(both links in German)

[1] http://de.wikipedia.org/wiki/Mietwagen_mit_Fahrer_%28Deutsch...

[2] http://de.wikipedia.org/wiki/F%C3%BChrerschein_zur_Fahrgastb...

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