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UberCab to disrupt the Taxi/Limo business

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Re: UberCab to disrupt the Taxi/Limo business

#51

Post by jfager »

Eliezer wrote: post #45
tptacek wrote: post #19

Earlier quoted context omitted.

Disagree. The policies behind medallions may be stupid and unfair, but their existence provides a mechanism of accountability (you can lose them, and they're hellaciously expensive) that doesn't exist with iPhone dispatch. It doesn't surprise you that cab drivers in Chicago basically never drive you to random destinations, or change fares midway through the ride? The goodness of cab driver hearts isn't what's prevent…

You missed the part where the taxi gets rated. Problem solved.

You missed the part where the cabbie gets together with his friends to pad his stats and/or only screws 1 in 10 fares, and the part where people aren't going to perceive the same social incentive to review a cab as, say, a trendy restaurant.

Re: UberCab to disrupt the Taxi/Limo business

#52

Post by ajju »

patio11 wrote: post #26
tptacek wrote: post #19

Earlier quoted context omitted.

Disagree. The policies behind medallions may be stupid and unfair, but their existence provides a mechanism of accountability (you can lose them, and they're hellaciously expensive) that doesn't exist with iPhone dispatch. It doesn't surprise you that cab drivers in Chicago basically never drive you to random destinations, or change fares midway through the ride? The goodness of cab driver hearts isn't what's prevent…

I do more of my traveling from airport to suburbs than inside the city, so I get to use a car service. It is pretty simple: I call American Taxi (by way of Bangalore), they send me an Eastern European immigrant with a car, and he whisks me home for the published flat fee. Their incentive to not screw me is that they value my continued custom (and chargebacks are a beast). His incentive to not screw me is that he valu…

When you say "by way of Bangalore", do they have their call center in Bangalore? /just curious how many taxi dispatch services do this.

Re: UberCab to disrupt the Taxi/Limo business

#53

Post by tptacek »

jfager wrote: post #51
Eliezer wrote: post #45

Earlier quoted context omitted.

You missed the part where the taxi gets rated. Problem solved.

You missed the part where the cabbie gets together with his friends to pad his stats and/or only screws 1 in 10 fares, and the part where people aren't going to perceive the same social incentive to review a cab as, say, a trendy restaurant.

People will absolutely provide negative reviews when they get screwed by a cab; they'll be sputtering and looking for anything they can do to equalize the situation.

But that doesn't matter, because this is the eBay problem; a reputation adequate to do business in the system is too cheap to establish from scratch to make losing one a major deterrent.

Re: UberCab to disrupt the Taxi/Limo business

#54

Post by jfager »

tptacek wrote: post #53
jfager wrote: post #51

Earlier quoted context omitted.

You missed the part where the cabbie gets together with his friends to pad his stats and/or only screws 1 in 10 fares, and the part where people aren't going to perceive the same social incentive to review a cab as, say, a trendy restaurant.

People will absolutely provide negative reviews when they get screwed by a cab; they'll be sputtering and looking for anything they can do to equalize the situation. But that doesn't matter, because this is the eBay problem; a reputation adequate to do business in the system is too cheap to establish from scratch to make losing one a major deterrent.

I didn't say people wouldn't leave reviews, I said they wouldn't have the same social incentive to do so as with other things that get reviewed. Other incentives (revenge) of course still exist, but the result is probably a heavy bias towards negative reviews, which can still make the system pretty unusable.

And this isn't necessarily the eBay problem, if you have to provide a driver's license or some other set of credentials to set up a driver account, and you can't just switch your handle in the system. The post was kind of light on those details.

Re: UberCab to disrupt the Taxi/Limo business

#55

Post by yummyfajitas »

tptacek wrote: post #49
yummyfajitas wrote: post #41

Earlier quoted context omitted.

A very simple replacement system: unlimited medallions will be issued. The cost of a medallion is the cost of policing 1 driver (e.g., 1 random inspection per month, background check, car safety, etc) + 15% profit for the city. Prices will be set at market rates, but must be fully disclosed to passengers before the ride.

How is it a win for consumers to let taxi fare rates float? Taxis are very cheap (many reasonable drives inside the Chicago Loop are within 100% of what it would cost to take the CTA). Floating rates would almost certainly rise . If a regulatory change harms consumers , what's the point of deregulating? San Francisco might benefit from deregulation, because there are political problems and structural breakages in the…

Allowing fares to float while maintaining the current artificially restricted supply will cause prices to rise. Allowing increased competition will almost certainly lower costs.

Taxi revenues are currently $91k/year in NYC. Breakdown: $18k medallion, $50k labor, the rest is maintenance/insurance. If labor costs were reduced to $35k/year due to competition (taxi driving isn't exactly high skill labor) and medallion costs were cut in half, that's a 25% reduction in taxi cost.

http://www.nyc.gov/html/tlc/downloads/pdf/presentation.pdf

I think my proposed $9k/year would be sufficient to pay for taxi inspections to get rid of blatantly unsafe vehicles. As for running people down, current incentives not to do that seem sufficient. It's no more a problem to be run down by a taxi than by a Dominos driver, who has the same incentives as a taxi driver. In fact, Michael Q. Lateforwork has even less incentive than any taxi driver to not run people down - he won't lose his job for doing so.

Re: UberCab to disrupt the Taxi/Limo business

#56

Post by rsingel »

tptacek wrote: post #38
patio11 wrote: post #26

Earlier quoted context omitted.

I do more of my traveling from airport to suburbs than inside the city, so I get to use a car service. It is pretty simple: I call American Taxi (by way of Bangalore), they send me an Eastern European immigrant with a car, and he whisks me home for the published flat fee. Their incentive to not screw me is that they value my continued custom (and chargebacks are a beast). His incentive to not screw me is that he valu…

Putting it on the iPhone scales the process up. Some things work fine at Patrick McKenzie scales, but not so fine at 40 fares per day per cab. There is immense competition for airport fares (it's one of the big problems with cab service in SF) and more incentive not to play games. The same can't be said of random fares on city streets. The only time I've ever been screwed with by a cab driver was with an unlicensed c…

Actually, airport fares aren't that great and they are getting worse for drivers (fee changes and cops on 101). But for the drivers who don't want to work much it's fun to hang out there. The problem with cabs in SF isn't SFO, it's simply there aren't enough cabs on Thursday to Saturday nights.

Re: UberCab to disrupt the Taxi/Limo business

#57

Post by tptacek »

jfager wrote: post #54
tptacek wrote: post #53

Earlier quoted context omitted.

People will absolutely provide negative reviews when they get screwed by a cab; they'll be sputtering and looking for anything they can do to equalize the situation. But that doesn't matter, because this is the eBay problem; a reputation adequate to do business in the system is too cheap to establish from scratch to make losing one a major deterrent.

I didn't say people wouldn't leave reviews, I said they wouldn't have the same social incentive to do so as with other things that get reviewed. Other incentives (revenge) of course still exist, but the result is probably a heavy bias towards negative reviews, which can still make the system pretty unusable. And this isn't necessarily the eBay problem, if you have to provide a driver's license or some other set of cr…

Nope:

(a) There will be more than one of these dispatching services, so you'll just hop.

(b) There's an inherent TOCTTOU problem, since they're only checking licenses when you sign up, not every time you pick up a fare. You'll just "rent" someone else's license; there are presumably tens of thousands of people who don't care what their cab dispatch reputation is.

Re: UberCab to disrupt the Taxi/Limo business

#58

Post by tptacek »

rsingel wrote: post #56
tptacek wrote: post #38

Earlier quoted context omitted.

Putting it on the iPhone scales the process up. Some things work fine at Patrick McKenzie scales, but not so fine at 40 fares per day per cab. There is immense competition for airport fares (it's one of the big problems with cab service in SF) and more incentive not to play games. The same can't be said of random fares on city streets. The only time I've ever been screwed with by a cab driver was with an unlicensed c…

Actually, airport fares aren't that great and they are getting worse for drivers (fee changes and cops on 101). But for the drivers who don't want to work much it's fun to hang out there. The problem with cabs in SF isn't SFO, it's simply there aren't enough cabs on Thursday to Saturday nights.

Last time I had this discussion with a cab driver in SF, he explained that there's some issue with the way cabs are dispatched in SF that pulls drivers to SFO, and that SFO is overserved at the expense of the city. I wish I could remember the details.

It wasn't "cabs are lazy".

Re: UberCab to disrupt the Taxi/Limo business

#59

Post by tmsh »

Just thinking about what forces might prevent the industry from being disrupted (regardless of whether/how this is good for the public):

I think the biggest innovation is the drivers rating the customers. It seems like a joke, but if you think about it, professional car service drivers aren't going to want to pick up just anybody for short rides. That's the real obstacle for scalability among that group. The obstacle for getting all cab drivers to join UberCab is probably the risk of alienating the customer base that might just want town cars, etc., without having to think about the complexity (i.e., it's a software problem, and a pretty easy software problem if done right). The other obstacle is the cost of an iphone, etc., for cab drivers. The obstacles for anybody with a car to join are medallions, licenses, etc., as mentioned. The other obstacle is, even with licenses, the fairness and effectiveness of the rating system is tough. Service history is a mixed blessing. When I step into a cab, I may not actually want to know about the driver's history. I may just want a nearly 100% guaranteed level of service (which theoretically the medallions provide). Though on the other hand it would be crazy to see like average on-time trips, average speeds, customer satisfactions, etc., in one big visual thumbprint before you step into a cab...

Re: UberCab to disrupt the Taxi/Limo business

#60

Post by tptacek »

yummyfajitas wrote: post #55
tptacek wrote: post #49

Earlier quoted context omitted.

How is it a win for consumers to let taxi fare rates float? Taxis are very cheap (many reasonable drives inside the Chicago Loop are within 100% of what it would cost to take the CTA). Floating rates would almost certainly rise . If a regulatory change harms consumers , what's the point of deregulating? San Francisco might benefit from deregulation, because there are political problems and structural breakages in the…

Allowing fares to float while maintaining the current artificially restricted supply will cause prices to rise. Allowing increased competition will almost certainly lower costs. Taxi revenues are currently $91k/year in NYC. Breakdown: $18k medallion, $50k labor, the rest is maintenance/insurance. If labor costs were reduced to $35k/year due to competition (taxi driving isn't exactly high skill labor) and medallion co…

Michael Q. Lateforwork is probably not economically marginal in the same way most cab drivers are, so the incentives are not the same.

Similarly, most people who deliver pizza are not career pizza delivery drivers. A pretty big chunk of them are students. Their incentive not to wreak havoc isn't the loss of their pizza job, it's in not screwing up their lives and bankrupting themselves.

That said, you have a good point. And I'm not HN's official advocate for taxi medallions. I just want to point out that while it certainly wasn't the intention of the medallion system, or even its primary effect, artificially-limited medallions do create a scarcity value to them that incentivizes drivers to play nice with the rest of the system.

There are plenty of unlicensed cars out there, and there is a clear difference in how reliable they are.

I wouldn't vote against any sensible replacement scheme, and yours sounds sensible.

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