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For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

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Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#61

Post by AnthonyMouse »

qq66 wrote: post #39
panorama wrote: post #9

This is an especially poignant story, and it's hard to not feel bad for this driver. On the other hand, people face investment risk all the time, i.e. when franchising a restaurant. When Chipotle or whoever comes in and devours the fast food market, I wonder if the local struggling burger franchisee asks the city for help? I can't speak on behalf of other cities, but anyone who has lived in SF pre-Uber has no shortag…

People face investment risk all the time, but medallions are a case of a city setting explicit expectations when selling the medallions and then changing the terms of the deal post facto. Chipotle devoured a huge chunk of the fast food market, but the city didn't collect money from McDonalds for a guarantee that Chipotle wouldn't be allowed to enter. Notably, this is illegal by federal law for auto manufacturers and…

> Taxi drivers are a form of franchisee, and they are asking for similar protections.

You can't make a contract with a legislature. Exchanging anything of value for changes to the law is literally illegal. Imagine what would happen if you could bribe Congress to pass some corrupt legislation granting you untold powers and the next Congress was prohibited from undoing it. The only thing that binds Congress is the constitution.

Obviously that leaves you in a tough spot if you have to rely on the state of the law, but legislatures know that. If they make huge unexpected changes to the law it tends to have a negative effect on the markets, so they try to avoid doing that, and people then rely on them trying to avoid doing that. But sometimes they have to, or sometimes they do it when they don't have to, and you take your lumps (or vote the bums out).

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#62

Post by ryanobjc »

randyrand wrote: post #54
rsl7 wrote: post #6

Earlier quoted context omitted.

If the medallion is the only way you can be a taxi, then enforce it. If Lyft and Uber are legitimate, then lose the medallion and pay this guy back his $250K.

A medallion is not and never was the only way to be a "taxi." Yes, there is little difference between street hailing and dispatch these days. But the law never guaranteed them immunity from dispatch innovation. No one was scammed. But you can still feel sorry for the guy. If there is one thing to learn - DIVERSIFY YOUR INVESTMENTS!

fair enough, but it's often hard to diversify your time and employment.

How do you diversity your investment in your employer?

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#63

Post by x5n1 »

mkhpalm wrote: post #59

It's hard to feel bad for people who chose to invest in rigged markets. Their frustration should remain squarly with local representation. Show me the public vote that decided to implement medallions. It's like voting to regulate the number of restaurants in a given city and leaving half that market to mcdonalds. (For safety of course) People would laugh at not leaving that up to supply and demand. The only reason it…

Most, if not all, of the people holding the medallions had nothing to do with their institution or even maintenance as a monopoly. They are simply entrepreneurs playing an existing game. A game whose rules have drastically changed.

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#64

Post by rohansingh »

mistermann wrote: post #58
SilasX wrote: post #51

Earlier quoted context omitted.

Hold on -- there's a big difference between "the government reneged on its promise to keep squatters off your land" vs "no one wants your land anymore". If they start turning a blind eye to squatters, it's fair to criticize that government for reneging. If the other city becomes such a vibrant spot that no one wants to live near you -- different story entirely. While local governments are arguably failing to require…

Everything you say is technically correct, but when something has been valuable for a very long time primarily due to government regulation only , and then it suddenly loses most of its value in the span of just a few years, I don't think it's fair for people who just recently entered the market after years of waiting to suffer all the loss (while their predecessors, purely by chance, made their investment back many…

Why should the loss be spread around? There are a number of rights and privileges you can purchase from the government, which are an investment risk. You go into them with a hope of profit and accept a risk.

For example, if I pay for rights to drill for oil somewhere and oil becomes obsolete, should I be reimbursed by my competitors?

The upside potential of one of these medallions was unlimited. After buying it once, you could use it to make an unbounded amount of money. Part of that is accepting the risk that it might make no money. Otherwise you're asking the rest of society to subsidize a private interest.

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#65

Post by SilasX »

mistermann wrote: post #58
SilasX wrote: post #51

Earlier quoted context omitted.

Hold on -- there's a big difference between "the government reneged on its promise to keep squatters off your land" vs "no one wants your land anymore". If they start turning a blind eye to squatters, it's fair to criticize that government for reneging. If the other city becomes such a vibrant spot that no one wants to live near you -- different story entirely. While local governments are arguably failing to require…

Everything you say is technically correct, but when something has been valuable for a very long time primarily due to government regulation only , and then it suddenly loses most of its value in the span of just a few years, I don't think it's fair for people who just recently entered the market after years of waiting to suffer all the loss (while their predecessors, purely by chance, made their investment back many…

The medallions did not have value primarily due to government regulation (in terms of limiting how many). The value was equally due to the regulation and the fact that street hails are so convenient relative to the other options. Just like property value is due equally do to the exclusive usage rights to it, and to utility of using the property itself (and I'd appreciate any feedback regarding how I can better communicate the dynamic in that analogy).

Therefore, it is well known that both a) regular property and b) medallions can lose value from either 1) governments not enforcing exclusivity or 2) legal alternatives becoming better. Governments never made any promise (either for property or medallions) that thy wouldn't lose value from 2). (To extend the analogy further to the car dealership case, the manufacturer makes no promises about eg Chevy demand falling because public transit gets better.)

To be sure, it certainly does suck when you put all your net worth in one asset and it loses value, but it does not thereby follow that your rights were violated or that a promise was broken. Nor does it necessarily make sense for the government to spread out the losses from this, because, well, why stop there? Why not socialize the losses from tepid real estate markets for leveraged homeowners, or for leveraged investors in local industries when their foreign counterparts get better?

There isn't a lot you can do about limiting investment downside risk beyond preventing people from having too much net worth in any one thing ... which maybe they should have done for medallions (or should start doing for homes, for that matter).

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#66

Post by SilasX »

x0x0 wrote: post #20
derekp7 wrote: post #7

Here's the thing I don't understand -- if the main attraction (from a customer point of view) is the app (with everything that comes with it), why haven't the cab companies got in on the same game? Either put out their own app to hail rides (and maybe give their cabs a more luxury look to them), or sign up as Uber/Lyft drivers themselves? Or is there something I'm missing?

in sf, specifically, the taxi companies are utter shit (and evil, to boot). I badly broke my leg and, because I lived too far from public transportation to crutch over, had to take taxis to work 4-5 times a week, often both ways. No taxi company in sf will reliably come, even if you make it clear that you are going to take a cab at least 4 days a week for most of the next year. Instead, even when you are in the middl…

I'm so sorry to hear that! I wish more people heard your story to put things in context, especially regarding the disability access issue.

With that said, I have to nitpick a few things:

1) This is a problem in many U.S. cities besides SF.

2) Uber has also shown a bizarre reluctance to deal with advance, regular booking. One employee even insisted that it would be anathema to Uber and against everything they stand for. Even though it would a) be trivial to implement, b) let them know of hails sooner, and c) give them greater knowledge of request patterns.

No, not making this up: https://www.quora.com/Why-doesnt-Uber-allow-customers-to-pre...

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#67

Post by wpietri »

derekp7 wrote: post #7

Here's the thing I don't understand -- if the main attraction (from a customer point of view) is the app (with everything that comes with it), why haven't the cab companies got in on the same game? Either put out their own app to hail rides (and maybe give their cabs a more luxury look to them), or sign up as Uber/Lyft drivers themselves? Or is there something I'm missing?

Cab companies have done that, at least in SF. I've been using Flywheel [1] for nearly 2 years. I press a button, and a cab turns up in a few minutes. When I'm done, they bill my card. And unlike stories I hear about Uber, these drivers know the city well.

[1] http://flywheel.com/

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#68

Post by jackvalentine »

I feel bad for the guy, but no way I would have made that purchase in 2012.

A basic SWOT analysis would have made me hightail out out of the taxi business instead of taking on debt to spend $250k committing myself to it.

If he gets his $250k back less the processing fee that feels like justice to me. He shouldn't have to wait for a buyer to come up though - it should just automatically be an option now that not regulating Uber seems to have become policy.

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#69

Post by Scoundreller »

Scoundreller wrote: post #44
Multiplayer wrote: post #37

Earlier quoted context omitted.

It's not quite the whole story. Medallions used to be almost free, which is why the waitlist was 10 years. They started charging 250k, but you can give them back for 200k. From the MTA site: By capping the sale price of medallions, the MTA insulates medallion holders from market fluctuations, either up or down. When drivers want to resell, the price is what they paid, minus a 5 percent transfer fee. The agency said i…

> For those cabbies who paid nearly nothing for their medallions... I'd argue they did pay for them, they worked for below-average wages for 10 years in the hopes of a payoff. Long-term drivers tend to see getting a medallion as a retirement plan.

Not understanding the downvotes:

Since cab drivers are bidding against each other for a medallion-car, if they bid more to get a car that shift/day/week, they earn less.

If, after 10 years of driving a cab, one could get a $250k wind-fall, one would be willing to earn less during those 10 years than if the wind-fall did not exist.

Re: For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

#70

Post by Scoundreller »

jonny_eh wrote: post #46
Scoundreller wrote: post #45

Earlier quoted context omitted.

In Toronto, it feels like the entire public is on Uber's side. But that could be good PR as well, since I can only poll my circle of friend-users.

Good PR or superior product + service?

Possibly all 3. Venture capital can buy a lot of things.
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