Skip to comments.Let the Taxi App Roll
Posted on 12/05/2012 2:08:34 PM PST by Kaslin
If Hollywood remade "The Graduate" and set it in 1980, the one word the businessman would have for Dustin Hoffman's character wouldn't be "plastics." It'd be "medallions."
That's because the single greatest investment you could have made over the last 30 years isn't in gold or silver or even Apple stock. It's in New York City taxicab medallions.
Since 1980, New York's taxi medallions -- essentially the license to drive a cab in the Big Apple -- have appreciated nearly 2,000 percent, according to one estimate. Prices rose on average 8 percent annually for 30 years, dipping significantly only once -- right after 9/11, calculates economist Ilan Kolet, a writer for Bloomberg.
Medallions have a better rate of return than Class A Berkshire Hathaway shares because New York tightly controls the number of medallions -- and hence the number of taxis -- permitted on city streets. In 1937, that number was 13,566, and it's hovered around there ever since. Medallions cost 10 bucks in 1937 (roughly $160 in today's dollars). Last year, two sold for $1 million each. Government-imposed scarcity and inefficiency created that value, nothing else.
So it's no wonder that New York's cab industry loves its regulators and vice versa. The Taxi and Limousine Commission exists to regulate taxicabs. If taxicabs -- as we know them, at least -- go out of business, what's the point of having a commission?
Such thinking has given birth to a national movement to kill Uber and companies like it. A San Francisco start-up, Uber is a car service that you "hail" with an app on your smartphone. In Washington, where I live, it is a life-changer. It's a bit more expensive than conventional cabs, but because I can't hail a cab in my suburban neighborhood and calling for one can take hours (if they show up at all), a fast and reliable car service is a real boon. The fact that it's a much nicer car that has been cleaned more than once since Jimmy Carter was president is a bonus.
When Uber enters a new city, the last thing it does is ask for permission. Instead, it just adheres to existing laws and hopes it can build up enough popularity before the regulators come to shut it down.
"If you put yourself in the position to ask for something that is already legal, you'll find you'll never be able to roll out," Uber founder Travis Kalanick told the New York Times. "The corruption of the taxi industries will make it so you will never get to market."
In Washington last summer, it was a very close call. The entrenched interests were desperate to kill Uber. The customers -- a.k.a. local voters -- loved it and successfully got the company a reprieve until the end of the year. In 2013, champions of the old way on the D.C. council will take another stab at it, in both senses of the word. And the council will have new ammo on its side. The International Association of Transportation Regulators (who among us doesn't love their work?) met in Washington last month to formulate ways to restore the status quo ante.
Matthew W. Daus, former head of the N.Y. taxi commission, is the president of IATR, and he talks about Uber the way Iranian censors talk about satellite dishes. It's a dangerous "rogue" app, Daus claims.
These big-city regulators nationwide proposed guidelines that have nothing to do with making things better for consumers. IATR wants to ban using GPS devices as a meter to determine fares. Why? Because that's how Uber does it. Another proposed rule would ban receiving a hail over a smartphone while driving. My favorite proposal would simply ban luxury sedan drivers from taking a job that was requested less than 30 minutes ago.
This is like banning a pizza company from promising to deliver in 30 minutes or less because that would be unfair to the established pizza shops that can't manage to deliver hot pizza.
Of course, one frustration I have is that Uber's core customers are precisely the sort of affluent and hip urbanites who routinely vote to empower regulators to meddle in more important parts of our lives -- in health care, manufacturing, etc. And while the thought of them getting what they deserve has its appeal, I'd rather Uber survive and its customers learn from its example. That would be a lesson worth its weight in medallions.
Uber has the right idea in today’s America. Don’t ask for permission until you get caught.
I wonder: How do the traditional car services fit into this picture? What’s the difference between car services and Uber, vis a vis the regulations?
It’s like my hip liberal NPR listening friends in California complaining about traffic on Route 50 because the new lanes are for car pools only.
We stay friends because we barely touch political subjects, but this was low hanging fruit.
I replied simply: watch who you vote for.
If you are going to take taxis, you may as well buy a car.
In 2002, I bought a lot in WV, on the side of a mountain. I wanted to build a pond on a dry stream bed (Pics 1&2 below) in a partial cleared area, but permits were required since they classified this as a "wetland". I was at 1600 ft, and this thing only ran water when it rained. I did have some weepy springs adjacent, but they were only wet WHEN IT RAINED or for a few days/weeks after.
I checked on the process and found that there were fees of more than $8,000, plus about two years of WAITING FOR THE PROCESS and MAYBE (or maybe not!) GET THEIR APPROVAL. I was told I would probably not be able to build it!
In December, I hired a young equipment operator, rented a trackhoe and dozer, and began the pond construction (pic 3). My location was sorta private, so I barged ahead. Along the way, a big snow and rain followed, which washed away about $15000 of work. $8000 later, I had a pond (pic $). That summer, I stocked it with fish, frogs, and turtles. Around August, I got a letter and summons. Oops (not!).
The result was a $5000 fine and a nice pond. I recently sold the lot, after divorcing my young wife! I live full time in my RV now and love it!
Ha, so you got it 3 years ahead of time and $3K cheaper just by ignoring the regs. Good for you!
That’s Bureaucracy for you
I knew it would get their attention at some point, but it was finished 9 months before they saw it. I had also checked on the POSSIBLE penalties beforehand!
It was a no-brainer!!! I HATE beaurocraps!
I'd guess none. But Uber's getting the biz.
I think you’ve nailed it.