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The Tyranny of Taxi Medallions

blog.priceonomics.com

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Re: The Tyranny of Taxi Medallions

#191

Post by brc »

codex wrote: post #146
brc wrote: post #130

Earlier quoted context omitted.

I find this a very weak argument. You're essentially saying that we have to limit car usage because too many cars cause congestion. Congestion has an explicit cost (wasted time) even if it is not priced in with some artifical time-of-use payment. Ultimately people will get onto the road one way or another if they need to get somewhere at a set time. So by limiting cab licences, all you are doing is limiting the mix o…

The idea is not to reduce cab counts to the point where people call towncars instead; that's likely a worse outcome, because the towncar spends only ~1/3 of it's time full: the other 2/3rds are spent driving to and from the towncar's parking space. Ideally cabs would spend near zero time driving around empty. Today this is solved by medallions, imperfectly, but tomorrow this can be solved by technology. What can't be…

>Just set the optimal number of cabs by fiat.

There is no person, committee or even algorithm that can set the correct supply better than a freely trading market. This has been known for a long time.

>In some respects, this is a natural monopoly.

No, it's an artificial monopoly. What we are talking about here is exchanging rides for money. That is the market - paying someone to drive you on a point-to-point basis.

If the market were left to it's own devices, and the only regulations were around traceability, security and the usual laws against blackmail etc, then you'd have a floating market with different prices per time of day and per trip. This would actually work against congestion by pricing it in.

Instead we have a central government committee deciding supply by whatever they use, and fixing prices. The natural outcome of fixed supply and fixed prices is sub-standard service and a shortage of available product. Which is exactly what cab users everywhere experience.

Re: The Tyranny of Taxi Medallions

#192

Post by philwelch »

enf wrote: post #89
argumentum wrote: post #79

Earlier quoted context omitted.

How might you propose to compensate people who, in good faith, bought taxi medallions I'm sure the following question was asked many times to abolitionists: How might you propose to compensate people who, in good faith, bought other people

It seems as disturbing to me as it apparently does to you, but it was recently in the news that the UK actually did a buyout when they abolished slavery. http://www.independent.co.uk/news/uk/home-news/britains-colo...

As satisfying as it might seem to just shoot the slaveholding bastards instead, that ends up being even worse in humanitarian terms.

Re: The Tyranny of Taxi Medallions

#193

Post by mh- »

rdtsc wrote: post #155
joezydeco wrote: post #143

Earlier quoted context omitted.

Condominium owners usually own a proportional share of the land that the building rests upon and the common areas of the property.

That seems almost like a scam. Kind of like time shares.

Not really.

Some more info: http://en.wikipedia.org/wiki/Fractional_ownership

http://en.wikipedia.org/wiki/Concurrent_estate

Re: The Tyranny of Taxi Medallions

#194

Post by rdl »

I wish all the cab-alternative companies using unlicensed drivers would get together and form some kind of industry association. Standardize a background check, safety check on the vehicle, incident reporting, etc., through this independent non-profit. Essentially they could neutralize the moral argument for licensing ("safety! think of the children") at minimal cost, then get back to innovating.

Re: The Tyranny of Taxi Medallions

#195

Post by rdl »

seanalltogether wrote: post #49
pg wrote: post #2

Structurally this practice is a lot like the preindustrial precursor of taxation, when governments would sell monopolies on the import or production of things in exchange for a lump sum. When obsolete government practices persist, they tend to be pretty sinister.

I've brought this up in another thread, but over in the UK, due to a lack of property taxes, its possible to purchase a home, yet stil have to pay a yearly ground rent to a private party. The cost to own land in nothing, so there's little incentive to ever sell it, and instead lease it out. People may complain about property taxes in the USA, but it prevents this very practice from happening. It would be better for e…

I thought council tax was property tax.

Re: The Tyranny of Taxi Medallions

#196

Post by roel_v »

mech4bg wrote: post #66
seanalltogether wrote: post #49

Earlier quoted context omitted.

I've brought this up in another thread, but over in the UK, due to a lack of property taxes, its possible to purchase a home, yet stil have to pay a yearly ground rent to a private party. The cost to own land in nothing, so there's little incentive to ever sell it, and instead lease it out. People may complain about property taxes in the USA, but it prevents this very practice from happening. It would be better for e…

We don't have yearly property taxes in Australia, just council rates which are usually around 0.2% of the house valuation (which is much lower than in the US AFAIK). However we don't have the split land/house purchasing like in the UK (or it's not very common at least) - I wonder why?

"However we don't have the split land/house purchasing like in the UK"

Of course you do [1], and it's even very common. My cursory Google search shows that in Victory, the state with the most private ownership, 40% of all land is lease hold. Other states even more! The whole city of Canberra is leasehold. That said, it's mostly leases of Crown land, so the economic incentives are a bit different from leasing land from a private owner.

[1] http://www.actpla.act.gov.au/topics/property_purchases/lease...

Re: The Tyranny of Taxi Medallions

#197

Post by arethuza »

brc wrote: post #190
gamble wrote: post #186

Earlier quoted context omitted.

The significant difference is that taxes are assessed on an impartial basis - usually a percentage of current market value. The classic problem with landlords is that tenants have no incentive to increase productivity when the landlord captures all of the gains by increasing rent. Even today, businesses often end up in situations where the landlord sees that they're doing well and jacks up the rent in the belief that…

Referring to 'lord' here is actual lords, like the Lord of Westminster. When I lived there, I paid something like 55 pounds a year into the lords pocket for use of the land. Landlord in your usage is a different terminology. In the UK a lord with lands either doesn't have the ability, or in practice, does not raise the land rents arbitrarily. Perhaps someone knowledgeable in UK properly law could weigh in. As other h…

There is no direct connection between being a landlord and being a Lord - you don't become a Lord by selling someone a leasehold neither are you required to be a Lord to do this (it's just a contract).

Of course, a number of famous landowners are Lords - notably the Duke of Westminster who owns vast amounts of London:

http://en.wikipedia.org/wiki/Duke_of_Westminster

Re: The Tyranny of Taxi Medallions

#198

Post by codex »

brc wrote: post #191
codex wrote: post #146

Earlier quoted context omitted.

The idea is not to reduce cab counts to the point where people call towncars instead; that's likely a worse outcome, because the towncar spends only ~1/3 of it's time full: the other 2/3rds are spent driving to and from the towncar's parking space. Ideally cabs would spend near zero time driving around empty. Today this is solved by medallions, imperfectly, but tomorrow this can be solved by technology. What can't be…

>Just set the optimal number of cabs by fiat. There is no person, committee or even algorithm that can set the correct supply better than a freely trading market. This has been known for a long time. >In some respects, this is a natural monopoly. No, it's an artificial monopoly. What we are talking about here is exchanging rides for money. That is the market - paying someone to drive you on a point-to-point basis. If…

I disagree: the number of cabs in circulation is a complex function of the market, but the ideal number of cabs is straightforward to calculate but won't be found by the market.

Why not? Given the choice between an optimal number of cabs (fully utilized) making a larger profit and an excessive number of cabs (underutilized) making a tinier profit, the market will always choose the latter. Markets will tend to attract competitors and thus supply until profit margins drop to near zero. In both cases prices are the same, revenue is the same, but in the latter case the pie has more slices, increasing congestion. There is less profit per taxi in the latter case, especially if prices drop with increased competition, but as long as there is at least an iota of profit, the number of cabs will not decrease to the most efficient level.

Taxing congestion itself is a good idea generally, and helps increase road efficiency, but this won't result in the optimal number of cabs, either. It will result in increased prices which will cut demand and thus supply, but given this new demand, it won't magically remove competion such that fewer cabs are servicing more passengers, relatively speaking. The number of cabs will still remain at the maximum number possible while still remaining profitable. For any given cab, the amount of time spent idling is still the same--too high.

Re: The Tyranny of Taxi Medallions

#200

Post by ericd »

JackFr wrote: post #147
ericd wrote: post #63

Earlier quoted context omitted.

You really can't compare the use-per-capita of cabs between 1937 and 2013...

Why not? An ellipsis isn't an argument.

I thought calling attention to it would be enough. Life, wealth distribution, transportation modes, etc. are very different now than they were 80 years ago. Treating it as a roughly apples to apples comparison is ludicrous.
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