Comment by ShabbyDoo | Hacker News Reader

Comment by ShabbyDoo | Hacker News Reader

One thing of many in Uber's favor is that its customers are of relatively high socio-economic status, and the company treats them well. When they hear that the company is being sued by the taxi industry, they take note. It's personal. Taxi service has been bad for years, and everyone's been a victim of the absurd regulations which have lead to this sorry state. Elected officials have been accustomed to taking advantage of regulated industries through corrupt actions (anything related to building or zoning permits as an example) without significant blow-back via news coverage or loss of reputation. This time, it's different. Look at how Washington DC's attempt to draft anti-Uber legislation lead to a national response via phone calls and emails. The proposed legislation was dropped. I suspect Uber will eventually prevail in most of its markets, but the politicians will take awhile to realize that the public is taking interest in seemingly esoteric taxi regulations -- the sorts of laws which have been used for years to transfer money from the pockets of the electorate into the hands of those close to power. I feel like I'm supporting democracy and freedom when I hit the "request taxi" button in the morning -- it's an action more powerful than my vote.

Umm i think regulations came because the of the sorry state of taxis. I don't know how many times i've been ripped off in a taxi. I assume people complained and the taxi industry got heavily regulated. Just look outside the US for comparison.

Nope, the medallion systems exist to block new competition. Sure there are some regulations that seem to favor consumers-- such as price controls-- but these are a short-term benefit, and at the cost of reduced innovation. Far better to allow competition, and customer service will improve through market action rather than government rule-making.

Unregulated innovation often innovates fraud and crime when you're talking about unmarked, unregulated cars driven by unknown people, picking people up off the street.

If you go anywhere in the world with less strict taxi regulation, you'll run into this. In Prague, my wife and I hopped into a cab only to find that the meter seemed to exist in a time bubble that ran 10x faster than the rest of the known universe.

I appreciate being able to hail a random car on the street and know exactly what I'm going to get. Safety and fraud issues are exactly why the industry was regulated in the first place.

I can agree with what you're saying though I want to share an anecdote from Moscow where there is pretty much no regulation and pricing varies by car company. Instead of having a meter you negotiate the price in the beginning.

To help users out with ordering cabs Yandex released an app that actually let's you order cabs and shows you pre-negotiated prices, you can pick whichever one you like (economy, premium, luxury). They include user ratings and some sort of due-diligence for taxis to get accepted to their network.

But apart from that, a Lyft-like system has existed in many cities for years. In Moscow just holding up your hand on the side of the street prompts anyone to just drive over to the side of the street and offer you a ride. Most of these are full-time or part-time drivers, but also people getting home from work who don't mind a small detour for a bit of extra cash. At a fraction of the price this is the most popular way for people to get around, although some cars look like they date back into the USSR era.

This is a perfectly acceptable scenario and I think with modern technology the market will start to regulate itself.

I can share an anecdote from the reverse perspective. When traveling in Morocco, I didn't speak any local languages (eg, French or Arabic). I also was entirely unfamiliar with the city, the distances between points, or even how much something should cost. If there was a Yandex app, I wouldn't have known about it (... although the last time I was in Morocco predated smart phones by about 10 years).

This meant that negotiating a price was pretty much out -- I paid what they asked, and had no real way to gauge whether that was reasonable other than asking a local. I also had no recourse if they overcharged -- what was I going to do?

Information asymmetry is a potent weapon for taking advantage of people, whether it involves taxi rates, or just how clean the restaurant's kitchen is, or how fresh the ingredients are. This is why we have regulations that attempt to provide some of the symmetry required for fair exchange.

"This is why we have regulations that attempt to provide some of the symmetry required for fair exchange."

In the case of Ebay, Uber, Airbnb, etc., technology can replace regulation as a means of providing power to the previously disadvantaged party. And, technological solutions almost always are more efficient than the regulation they replace.

And hailing a random car on the street should be regulated. Uber is not something you hail randomly on the street though. You hail it through their app, so you know that the car picking you up is actually an Uber car.

"customer service will improve through market action"

Ever been somewhere where taxis appear to be completely unregulated? It can be a scary nightmare.

Why not enforce regulations on vehicle safety, accurate and fair charging and driver safety and remove the artificial restrictions on the number of people competing in the market? A lot of places outside of the US go with that approach and it can work pretty well.

I don't have a huge problem with your suggestion although I wonder if several competing Uber-esque services would solve these sorts of problems much more efficiently. The idea of "fair" prices is a difficult one because the definition of the idea varies so widely. I happen to like Uber's variable pricing strategy, but many people don't regard it as fair.

I work in Chicago and have a condo in the Near West area (basically Ashland and Madison). Cabbies who are already in the area love seeing me hail them for a downtown trip because they earn a few dollars driving where they would have gone anyway without a paying customer. If the industry was un-regulated, I might consider competing with Uber by offering people with less money than time a way to get an inexpensive cab ride from one of these "backhaul" areas. Imagine an Uber-esque service where a senior citizen who wanted to go to the grocery store sometime in the next hour but only wanted to pay $3 for her trip could place a bid for a pick-up. Cabbies who dropped off a premium customer nearby could at least pay for their fuel to reposition themselves for the next premium customer. Everyone wins. It's this sort of innovation which is stifled by laws deemed to be in the best interest of consumers.

Well, my idea around "fair" pricing are simply that if you have a meter that it is accurate and calculates according to displayed rates. I don't think the actual values charged should be regulated.

Any law or regulation exists because of a variety of interests trying to make it happen for their own reasons.

Certainly, the initial reasoning for medallion systems was quality of service and safety. As time goes by and taxi lobbyists become more powerful, they find ways to subvert this into limiting competition. Maybe some city councillor traded his vote on this issue to get a park built in his district, or for support in a primary.

It's not like some Big Government Socialist sat down, twirled his moustache, and said "I think today I will limit competition in the taxicab industry".

You probably are correct. Initial regulations likely were earnestly enacted for the public good. I believe NYC implemented the medallion system (the first in the US?) because it was concerned that taxis would become so numerous that they would clog-up the streets. Over time, politicians figured out how to exploit their increasing power for personal gain. There's nothing unique to taxi service in this pattern.

> Nope, the medallion systems exist to block new competition.

That might be why they persist, but the main historical reasons that led to the introduction of tax licenses were: 1) to ensure a certain level of scrupulousness and geographical competence among drivers; 2) to reduce safety incidents caused by poorly maintained vehicles (initially carriages, later automobiles); and 3) to reduce taxis' contribution to traffic congestion by limiting their absolute numbers.

The British Parliament introduced the first such system in the 17th century, responding to concerns expressed by Londoners that thousands of "hackney hell carts", driven by unscrupulous fellows and poorly maintained, were overrunning the city.

Of course, there are now alternate approaches, so maybe the idea should be modified. Vehicle safety is today taken care of separately by mandatory vehicle inspections for all roadworthy vehicles. Congestion could be dealt with through market forces by charging tolls to drive in the busiest areas during peak times, as London has already started doing.

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