I have to agree that there should be some sort of oversight and regulations in terms of commercial liability insurance and at least some sort of basic training.
That said, from my limited experience with Uber, I’m willing to pay more for it than cabs. For me, it’s been a much more reliable service, with cars actually arriving at the time they said they’d be, not 45 minutes later or never (as has happened to me several times with Yellow Taxi.) I know exactly where the cabs are, and what my options are, and the entire experience has been less stressful and more pleasant than cabs.
Like I said, I was a City Commissioner for over 20 years, so perhaps I “understand enough about the business to have an opinion”. :rolleyes: And all I have seen is the corruption and issues that come with over-limiting medallions, like SF does. I can’t see any *significant *downside to letting the free market handle this- *that can be worse than the SF problems. *
I don’t have a commission based job and never have. But I know people who work for commission and what you say here is their self-reported experience 100% of the time. That’s just how commission works. “It’s easy to sell $20,000 worth of product each hour. And if you do that 40 hours a week, 52 weeks a year, you’ll make $150k!” Good luck with that. In reality they’ll earn $20k a year, but stick around because occasionally they make a few grand more than that.
They’re trying, but it’s not a simple problem, and why it’s not is related to the OP’s question.
The primary reason that Uber is not generally regulated as a taxi company is that it can’t be hailed on the street. If you’re walking down the street and you put your hand up and a cab comes over, you generally want to know that the driver has been through some kind of vetting and that he’s not going to try to rip you off with fees. If you’ve ever hailed a cab in a developing country with less regulation, you’re used to having to negotiate the fee every time, and to the occasional argument over it at the destination. This is not a very efficient way to do things, so the state stepped in and regulated things to make the market more efficient and reduce the number of arguments and negotiations that block traffic in busy urban areas.
Those regulations generally didn’t apply to private companies that you contacted beforehand to provide service. Because you weren’t hailing them on the street, you could do the negotiation in a way that didn’t block traffic, and presumably you could decide for yourself if you wanted to do business with the company.
Over time, due to regulatory capture, the taxi regulations became a way to manage not just quality and price transparency, but to become a barrier to entry into the market, protecting the rents of the incumbents. Hence, the limited supply of taxi medallions.
Pre-smartphones, this sort of balanced out. Taxis had higher regulatory costs than private car services, but were more convenient. Private car services had higher transaction costs (more work to negotiate the transaction in the first place) and higher distribution costs (more deadheading it back from a destination), and generally went upmarket to compensate.
But, now technology has increased efficiency tremendously. It’s easier to get a car by smartphone than it is to physically see one and get its attention, and Uber has invested greatly in the logistics required to make their response time impressively good. So now Uber is a private car service with lower regulatory and transactional costs than taxis, and better network effects.
Competing with this is difficult for traditional taxi companies. Taxi companies still have their legacy regulatory costs that were meant to keep out competitors, and they’ve been lobbying to expand those regulations to cover the new entrant, but not very effectively. People are generally in favor of regulations requiring insurance and a process that ensures drivers aren’t criminals, but they’re not in favor of purely market-limiting protectionism. And, honestly, Uber provides a better service in most cases. The cars are cleaner and nicer, they arrive sooner, and the reputation system works way better than government inspections at keeping bad actors out.
The various taxis could try to duplicate Uber’s system and make an app (and there are several attempts to do so, but)
This is not a trivial technical problem. Uber has several years head-start and very smart people working on the logistics problem.
They’ll still be saddled with the old regulatory costs as long as they want to pick up fares without phone-hailing. Unlike Uber, they generally can’t change their prices due to demand, which makes them much less flexible and leaves money on the table.
There are massive coordination problems in going from an independent bottom-up system to a top-down control system. Taxis are traditionally driven by independent contractors who pick up fares or not. Uber rules with an iron fist. Going from one to the other is not an easy transition.
It doesn’t work that way. This case only involves state law. It’s possible a similar case will be brought under federal law, but hardly a given, and the law is different anyway.
I believe that ruling applies only to the plaintiff, not to any other Uber drivers. And I’ll bet that their legal team is going to tighten up the contract with the drivers.
I’m just wondering how the “bureaucracy is stifling entrepreneurialism” argument will fly when Uber’s founders decide they’re ready to sell out to, oh, let’s say Hertz, Exxon, General Motors or some other transportation megacorp.
I might also point out that smartphone and uber market saturation here in LA is enough that even if you were one of the 1/3 that didn’t have a smartphone, chances are you know someone who does and you could have them get an uber for you. I’ve done that for a few people. Or every other month when the wife loses or breaks her phone.:rolleyes:
But AB said “limiting,” and you’re talking about “over-limiting.”
If you hope to make the case that unregulated X is better than regulated X, you might want to avoid starting out by noting that the regulation was handled poorly.
:eek: