Chicago taxi industry sliding towards collapse • Hacker News Board

Re: Chicago taxi industry sliding towards collapse

#81

Post by wutbrodo » Fri, Jun 09, 2017, 10:15 PM UTC

tw04 wrote: post #34

nserrino wrote: post #25

I probably won't ever take a taxi again, but have some sympathy for the cab drivers who put their life savings in medallions. The city effectively promised them the exclusive right to give taxi rides, but didn't do anything about a non-medallion entity doing that same thing. They put hundreds of thousands of dollars into something meaningless.

Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it? Had taxi company owners not used those medallions as an excuse to provide absolutely horrendous customer service, they wouldn't have ever had to worry about uber/lyft/whatever in the first place. I've never taken uber or lyft because it's cheaper, I've taken it because I g…

> Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it?

This is the wrong analogy, for trivially obvious reasons. As I'm sure you're aware, the drop in value of taxi medallions wasn't contingent on the owner being a bad driver. Put plainly, even a driver who went above and beyond to provide honest, high-quality service was affected by the drop in values. To put it yet _another_ way, the fact that many taxi drivers provided shitty service couldn't be less relevant.

Your analogy would only make sense if it was talking about an entire apt block got condemned due to multiple slumlords, including the apt owned by the guy who kept his property up to code and livable.

Neither this nor the fact that the regulatory regime was horribly flawed change the fact that many drivers got screwed through no fault of their own because gov't policy was incompetent enough to create bad policy and fail to sustain it.

Economic ownership of real estate as property is pretty bad economic policy too (cf Georgism) but that wouldn't change the fact that suddenly implementing a 100% LVT would 1) be infinitely better policy and 2) screw over an awful lot of people playing by the rules of the previous system, through no fault of their own.

Re: Chicago taxi industry sliding towards collapse

#82

Post by cortesoft » Fri, Jun 09, 2017, 10:19 PM UTC

incongruity wrote: post #49

brianwawok wrote: post #32

Earlier quoted context omitted.

As long as Lyft is around, they can't.

You're right. There are no markets in which a few dominant players capture significant profits because there are only a few dominant players who exploit barriers to entry or network effects to stay on top... Except pharma, telecom, energy, airlines and one or two others...

Other than pharma, you just mentioned 3 industries that have very low margins. They aren't making a ton of money on their monopolies.

Re: Chicago taxi industry sliding towards collapse

#83

Post by brianwawok » Fri, Jun 09, 2017, 10:22 PM UTC

cortesoft wrote: post #82

incongruity wrote: post #49

Earlier quoted context omitted.

You're right. There are no markets in which a few dominant players capture significant profits because there are only a few dominant players who exploit barriers to entry or network effects to stay on top... Except pharma, telecom, energy, airlines and one or two others...

Other than pharma, you just mentioned 3 industries that have very low margins. They aren't making a ton of money on their monopolies.

Indeed I think he proved my point.

I am not sure who would like taxi industry to pharma?

Re: Chicago taxi industry sliding towards collapse

#84

Post by brianwawok » Fri, Jun 09, 2017, 10:23 PM UTC

switch007 wrote: post #53

brianwawok wrote: post #30

Earlier quoted context omitted.

+ 10000, the taxi system in chicago was _SO_BAD_ Can remember one case where I got a 5am ride to the airport. I suspect the guy was driving a friends cab, as his face did not match the registration. He blew through all stop signs we came across. There were no working seatbelts in the cab. I was literally afraid for my life. Oh and of course his credit card machine was broke, and he had no change, so I have to pay wit…

In that situation, shouldn't you underpay but leave your name and address, suggesting he take it up with the council/police? Do local/federal laws permit that? I know what it's like though: I arrived late in to Spain once, I got ripped off as it should have been a fixed fare (I had lived in the city!), but it was late and night and was too tired to argue in Spanish.

Yes in hindsight. But it was 5am and I was going on my honeymoon. Grandstanding to a can driver was low on my agenda...

Re: Chicago taxi industry sliding towards collapse

#85

Post by thephyber » Fri, Jun 09, 2017, 10:28 PM UTC

nserrino wrote: post #25

I probably won't ever take a taxi again, but have some sympathy for the cab drivers who put their life savings in medallions. The city effectively promised them the exclusive right to give taxi rides, but didn't do anything about a non-medallion entity doing that same thing. They put hundreds of thousands of dollars into something meaningless.

> have some sympathy for the cab drivers who put their life savings in medallions

Nope. Nope nope nope nope nope.

They were speculators in a bubble market. It didn't matter what percentage of their life savings they used. If you feel sorry for someone who purchased a $300k taxi medallion which had an intrinsic value (the total value a medallion can be used for rental to taxi drivers over X years) which is far less, you are enabling such behavior.

You also have to remember that the more distorted the medallion market, the more the average taxi driver suffers. Taxi drivers, by and large, rent time in a taxi or own a car and rent the medallion. They haven't been able to afford their own medallions for decades, if ever.

Taxis had a "monopoly" on unplanned fares, but "black car" and limo service was competition (and, therefore a price ceiling). The more distorted that the medallion market, the more the other competing services would chip away at their business, diluting the value of the medallions. I'm glad that a product like Uber/Lyft was able to destroy the price floor of medallions.

I'm somewhat saddened that taxi drivers are losing that means of making a living, but it benefits far more people in the US to have a cheaper means of transportation. "Concentrated costs but diffuse benefits." It's similar to the way US textiles, steel, cheap manufacturing have suffered under globalization to benefit the average US consumer household, which saves for more than $2000/year after China joined the WTO.

NPR's Planet Money did at least one episode[1] on "The Taxi King", a guy who built a house of cards by leveraging the equity in some of his NYC taxi medallions to get loans for others. After Uber started to erode their monopoly, the medallion market popped and he's begging the state and federal governments for a "bail out". I could care less about this human piece of trash. Obviously, "the average" taxi medallion owner probably didn't own dozens of them, but I still can't find much sympathy for someone who invests in a bubble product created by a government-mandated monopoly that should have been disrupted decades before it was.

[1] http://www.npr.org/sections/money/2015/07/31/428157211/episo...

Re: Chicago taxi industry sliding towards collapse

#86

Post by zanny » Fri, Jun 09, 2017, 10:29 PM UTC

gricardo99 wrote: post #59

degenerate wrote: post #7

Good, it's about time we let some crappy things die. Bailing out the banks and GM got me furious many years ago. Imagine if the government stepped in and saved Altavisa / Pets.com, and all the other dot-com boom companies? What good would that have done? Nothing. Let 'em burn and innovation will rise from the ashes.

"Let'em burn" with respect to "the banks" has been researched and cited as exacerbating the great depression[1]. I know there are folks legitimately concerned with moral hazard, and genuinely believe letting it all burn down would have been the better approach. I'm just glad they weren't in charge when everything went into a tail spin. I think it would have been a LOT worse for everyone. The Automaker bailout, in hin…

Except the great depression happened without FDIC insurance. It wouldn't be pretty, but nobody would have been destitute from a banking collapse. There are many more regulations put in place since the 30s to safeguard against the extraordinary degree of damage a collapse can have like that.

Instead of a trillion dollar bailout that went to rich coffers (and most of which was paid back) we could have just thrown the money, mixed, into VC to replace the dead banks (as investment stake, that the government could have sold back later and recouped the costs all the same) and unemployment protection to keep the people temporarily put out of work during the restructuring from destitution.

In that scenario, the robber baron crooks that should have been in prison don't get to waft off on golden parachutes paid with tax money.

Re: Chicago taxi industry sliding towards collapse

#87

Post by Paul-ish » Fri, Jun 09, 2017, 10:31 PM UTC

bitJericho wrote: post #64

TulliusCicero wrote: post #47

Earlier quoted context omitted.

Yeah, and I bet after Borders shuts down, you'll see Amazon raise book prices sky-high! People always claim this will happen, and it never seems to. If Uber tripled prices, a competitor would start up to cut into their market share.

VCs wont pay for rides forever.

True, but in cities with medallions supply was effectively restricted which probably had an influence on prices. That probably wont happen under a rideshare system.

Re: Chicago taxi industry sliding towards collapse

#88

Post by techsupporter » Fri, Jun 09, 2017, 10:31 PM UTC

bdalgaard wrote: post #69

jseliger wrote: post #33

Earlier quoted context omitted.

less likely to be crazy. Having taken many cabs and many rides via Uber, Lyft, and Juno, I'm not sure why you'd claim this. The drivers for ride-sharing services are far safer, saner, and more careful than cab drivers. The reason is not hard to ascertain: at the end of almost every trip drivers and riders rate each other.

I think there are similar related downsides that could be said about ride-sharing too. If we are giving anecdotal experience then I will say that ride-sharing drivers in Chicago are much more likely to blow through yellow/red lights or park in a cross-walk. The reason is not hard to ascertain: I can easily call 311 on a taxi as a pedestrian with the taxi number. Personally, I see a lot of people happy killing all of…

Same problem in Seattle, especially with the complete disregard for lane use. Uber and Lyft drivers seem to think that "bus only" is secret code for "all TNC drivers stop here for passengers, especially at peak times."

My personal favorite is how hazard lights have morphed into "I can do whatever I want, just go around me by veering a car / this 60' bus into oncoming traffic."

One of these days I'm going to start spending one of my days off just standing at a random major intersection and emailing SDOT/SPD and posting on Twitter the license plate numbers of every Uber/Lyft driver behaving badly.

Re: Chicago taxi industry sliding towards collapse

#89

Post by hrez » Fri, Jun 09, 2017, 10:31 PM UTC

gricardo99 wrote: post #59

degenerate wrote: post #7

Good, it's about time we let some crappy things die. Bailing out the banks and GM got me furious many years ago. Imagine if the government stepped in and saved Altavisa / Pets.com, and all the other dot-com boom companies? What good would that have done? Nothing. Let 'em burn and innovation will rise from the ashes.

"Let'em burn" with respect to "the banks" has been researched and cited as exacerbating the great depression[1]. I know there are folks legitimately concerned with moral hazard, and genuinely believe letting it all burn down would have been the better approach. I'm just glad they weren't in charge when everything went into a tail spin. I think it would have been a LOT worse for everyone. The Automaker bailout, in hin…

That was due to run on the banks before FDIC. So, yes, there was no reason to be saddled with moral hazard instead of orderly dismantling. Look at Lehman, Wamu etc.

Re: Chicago taxi industry sliding towards collapse

#90

Post by CydeWeys » Fri, Jun 09, 2017, 10:33 PM UTC

wutbrodo wrote: post #81

tw04 wrote: post #34

Earlier quoted context omitted.

Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it? Had taxi company owners not used those medallions as an excuse to provide absolutely horrendous customer service, they wouldn't have ever had to worry about uber/lyft/whatever in the first place. I've never taken uber or lyft because it's cheaper, I've taken it because I g…

> Do you also feel bad for the slumlord who spends a million dollars on a property that eventually gets condemned because he didn't take care of it? This is the wrong analogy, for trivially obvious reasons. As I'm sure you're aware, the drop in value of taxi medallions wasn't contingent on the owner being a bad driver. Put plainly, even a driver who went above and beyond to provide honest, high-quality service was af…

> Neither this nor the fact that the regulatory regime was horribly flawed change the fact that many drivers got screwed through no fault of their own because gov't policy was incompetent enough to create bad policy and fail to sustain it.

There's an important clarification here: Taxi drivers did not get screwed. It's medallion owners that got screwed. Yes, some of the drivers actually own their medallion, but many (most?) do not. Those who do not own their medallion didn't really get screwed, not more than anyone who gets laid off or has to change industries anyway. Many of them are simply driving for ridesharing companies now.

The medallion owners who got screwed do partially have themselves to blame, because they saw the outrageously inflated prices for medallions and chose to pay them anyway. It's like the mortgage crisis; at least some of the blame goes on the people who saw the absurd prices and chose to pay them anyway, and then got left holding the bag when the collapse hit.