Apart for selling the right to operate in a government sanctioned monopoly what service does this man provide? This looks like the worse example of rent seeking I have seen.
o A poorly tracked rider/driver interaction in which it's somewhat obscured which riders I road with in case I have a bad interaction and need to follow up.
o A poorly designed hailing system in which I need to physically see the taxi in order to request its service.
o A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all.
o Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction.
Without the medallion, of course, he couldn't afford to provide those "non-services", and would therefore have to compete for business. The medallion is what allows him to provide such a horrible level of service - and, such poor service is frequently seen in most monopolistic markets. See Comcast.
* Price reliability: Prices in most taxi systems follow strict rules. Customers can use this knowledge to estimate what they will spend, and drivers what they can earn.
* Service dependability: Because medallions are limited and prices are regulated, taxi drivers can make a living, and the service does not boom/bust. This means customers are not gouged in good times and unable to find taxis in bad times.
* Non-discrimination: Taxis are usually required to respond to all hails, and to not refuse service because your ride is too short/long.
* Driver tracking: because a taxi driver must have a medallion and follow rules about posting information in/on their cabs, passengers can distinguish between 'taxis' and random people offering ride services. While there may be no built-in reputation system, there is incentive and recourse. How do passengers know if a non-taxi is a guy who makes his living from offering rides, or a guy who just stole a car and is going to rob them? A taxi driver is risking a lot by robbing his passenger.
Many of these points are matters of preference, or can be solved by technology (reputation). Do we, as a society, want to incentivize a stable transit system by limiting the number of drivers or by paying more than 'market' prices in slow periods, and more in busy periods? Do we want drivers to be able to refuse service? If not, how do we compensate drivers who make short/long trips that have low profitability and high opportunity costs?
Aparently, that's not true in the US - I've read about many times how white people hail cabs for their black friends, because cabs won't stop for black people.
The 3 times our friend in SF ordered a Uber, it never failed, even though one of these rides was shorter than the one we requested to Lombard St.
To me it's clear who is providing the non-discrimination service and who is not.
In reality this does happen. I've frequently been refused during 'feeding frenzies' at my local train station based on the fact that I'm not a tourist (and thus know the rules), my trip is too short, etc. In theory by rejecting a legitimate fare a cabbie is risking more than a scab would be risking (historically). Under an Uber/Lyft/etc system this problem is mitigated, probably even better than the medallion system.
Service dependability - I take cabs exclusively, and, while I can't comment on other markets, I have deep knowledge of the bay area taxis. First, it's important to note, that even when they are operating in "normal mode" - you can never, ever quickly get a taxi on the peninsula. Minimum time is always about 15-20 minutes, and frequently 30 minutes. Also, when it's busy, or late - forget it, you will not get a taxi. Compare this to Uber, that works hard to ensure you will always have a ride, regardless of time, level of busy. And yes, basic economics therefore suggests that in order to make that happen, you will have to vary the price. But, I would definitely like to have the choice of taking a more expensive ride, then no ride at all.
Non-Discrimination: You've got it backwards. Taxis discriminate all the time based on every conceivable factor. Uber doesn't even let the driver know where you are going, and the driver is committed to picking you up before he sees if you are young or old, black or white, male or female. About all they can discriminate on is how well you treat them (Drivers rate passengers).
Your Driver tracking thing is a long stretch. A better example would be, "Taxi Drivers in general have been doing their job for a while, there is little churn, so it's unlikely you will get one that will rob or rape you, (though it's not unheard of, particularly with drunk passengers.) as those drivers who do that are probably going to get fired, and it's less common to get new drivers with taxi services than with uber.
Of the 200 or so RideShares, the worst one I got was a Driver who had only been working for Lyft for a week, and used her cellphone to get GPS directions to the airport, and came to a hard stop at a stop sign. Every other one has been excellent, courteous, and clean safe cars. I have no end of horror stories of psychotic taxi drivers driving cars that sometimes wouldn't open from the inside.
But they do rate the passengers after they discover their destination, age, race and gender, so they could discriminate on that if they want to.
Don't Uber give you an estimation? I took a taxi a single time in my life, I can tell you, I had no idea how expensive it would be (and it was) and it took me multiple call and about 45 minutes before getting inside the taxi. I still have no idea how to estimate the price, I'm still not interested in taking a taxi after all that.
> * Service dependability: Because medallions are limited and prices are regulated, taxi drivers can make a living, and the service does not boom/bust. This means customers are not gouged in good times and unable to find taxis in bad times.
This is something that I never liked and I don't understands how people can be for that. What purpose does it make to have a unique price when you can't even get it at that price. I will sell you a new amazing smartphone for 1$, the best price of the world and I will never change it's price, but I only have 100 of them and I don't plan to make more. It's great for the one that get it but at the end of the day, if you really need it and you can't even get it, it's amazing price won't help.
> * Non-discrimination: Taxis are usually required to respond to all hails, and to not refuse service because your ride is too short/long.
I can't see how you can believe that.
> * Driver tracking: because a taxi driver must have a medallion and follow rules about posting information in/on their cabs, passengers can distinguish between 'taxis' and random people offering ride services. While there may be no built-in reputation system, there is incentive and recourse. How do passengers know if a non-taxi is a guy who makes his living from offering rides, or a guy who just stole a car and is going to rob them? A taxi driver is risking a lot by robbing his passenger.
That's depends of the service. If people require it, if it stop people from taking that service because they are afraid of it, then the offering will change.
With a monopoly it doesn't, it stay the same, it doesn't have to change, I still have no idea what's the price, I have no easy way to make sure I will really get one fast enough. I'm a potential market but they don't freaking care about me. At least, with competition the market can affect how it work, they have an impact on it. If we need more taxi during rush hour, it's possible, if we need less, it's possible, if we need more security, it's possible.
If there's still enough people interested in your monopoly taxi system, they will keep using your monopoly taxi system and it will survive but we both know it's not the case and currently it's subsidized by people who have no other option than taking that crappy service.
- I can get a cab even if my phone battery days (or if I don't have the phone)
- in theory, they can't say no (apparently, they sometimes do in NY, but haven't had that happen to me in London yet)
- they know the city, and don't need to be constantly looking at the GPS while driving.
- no surge pricing
Lyft and Uber both let me set my destination in the app and send that to the driver's phone, but regardless of service, these days I'll tend to tell the driver how to get there if it's a city I'm familiar with.
In Berlin there's a popular app called MyTaxi that's used by taxi drivers and end-users which builds all of that on top of the city's licensed cabs. (It exists in other cities as well, though I can't speak for it there.) You can order, pay, tip, estimate costs, see them approaching, review and make a call to your driver from within the app.
From that perspective I think it's just a missed opportunity to have built some of those features on top of existing taxi systems.
There's no incentive to implement that sort of innovation. The prices and number of cabs are both more-or-less set. The medallions are fairly well utilized and the revenues have a hard ceiling, so there's not enough incentive to scale up or introduce new business models.
I actually prefer taxis if I'm in Manhattan because it is about 10x faster to hail one of the many taxis rolling by than it is to wait and watch on your phone your Uber driver slowly make its way to you.
>A poorly designed (non existent?) tracking system, in which the taxi that I've requested may, in fact, be service another passenger, and have no intention of coming directly to me for the next 30 minutes. Or, never at all.
In New York, the cab's center lamp is lit up when vacant and available for hails.
>Almost no feedback, and certainly no "default opt-in" feedback mechanism on the driver, providing no incentives for the drivers to behave professionally or courteously for every ride, resulting in frequent rude or abrasive customer/rider interaction.
Tipping is the main incentive. Reporting of bad behavior goes through 311 (in New York). If you pay via credit card, the cab's medallion number is even on your receipt, so you don't have to remember it when you're in a huff leaving the cab.
I'm not saying the taxi cabs are the best system, but I want to quell misinformation.
Although yellow cabs in NYC are required to take you where you request, some will break this rule, or just do it begrudgingly. Same with taking a card, they will do it but make a big show and a stink about it. One even said I better give him a "big tip" for taking me to the airport.
Sounds great on paper, but these are abused. They'll leave them on accidentally or want to know where you're going before they let you in the cab. And that's saying nothing of bright, sunny days that render cab lights pointless.
> Reporting of bad behavior goes through 311 (in New York). If you pay via credit card, the cab's medallion number is even on your receipt, so you don't have to remember it when you're in a huff leaving the cab.
311 doesn't care about bad service. I get drivers ranting to themselves because they don't like my destination. It's also hard to snap a pic of a medallion when a cab refuses to pick up you up and drives off.
...that's to say, yes, there are answers, but there is room to innovate here and writing solutions into the legal code is a recipe for poor performance in several dimensions.
You can see all the middle-men in any business as useless if "XYZ" was better.
Now in the case of that guy in particular, he is just becoming obsolete, replaced by a better medallion system and a modern/leaner middleman: Uber. He disappears in the name of progress so there is nothing sad about that, but that does not mean he was never useful.
Also, I guess somebody will point out that if he wasn't adding flexibility to the medallion system, Government would have been forced to fix it. That's wishful thinking: there is nothing that the government could not provide but Uber does, despite that it does not move at all in that direction. Government is not pressured by the market like people and businesses, this guy is greasing the part where government policies meet people reality.