Posted on 08/26/2015 4:29:44 AM PDT by Kaslin
Here's my taxi question. If a person is law-abiding, has a driver's license, has a car or van that has passed safety inspection, and has adequate liability insurance, is there any consumer-oriented reason he should not be able to become a taxicab owner/operator? Put another way: If you wish to hire the services of such a person, what right does a third party have to prevent that exchange?
Many cities have granted monopoly power to taxi companies -- the right to prevent entry by others. Sometimes this monopoly takes the form of exclusive government-granted rights to particular individuals to provide taxi services. In other cases, the number of licenses is fixed, and a prospective taxi owner must purchase a license from an existing owner. In New York City, such a license is called a taxi medallion. Individual medallions have sold for as high as $700,000 and corporate medallions as high as $1 million. In other cities -- such as Miami, Philadelphia, Chicago and Boston -- taxi licenses have sold for anywhere between $300,000 and $700,000. These are prices for a license to own and operate a single vehicle as a taxi.
Where public utility commissions decide who will have the right to go into the taxi business, a prospective entrant must apply for a "certificate of public convenience and necessity." Lawyers for the incumbent taxi owners, most often corporate owners or owner associations, appear at the hearing to argue that there is no necessity or public convenience that would be served by permitting a new entrant. Where medallions are sold, the person must have cash or the credit standing to be able to get a loan from a lender, such as the Medallion Financial Corp., that specializes in taxi medallion purchases. Medallion Financial Corp. has held as much as $520 million in loans for taxi medallions.
So what are the effects of taxi regulation? When a person must make the case for his entry before a public utility commission, who is likelier to win, a single individual with limited resources or incumbent taxi companies with corporate lawyers representing them? I'd put my money on the incumbent taxi companies being able to use the public utility commission to keep the wannabes out. Who is handicapped in the cases in which one has to purchase a $700,000 medallion in order to own and operate a taxi? If you answered "a person who doesn't have $700,000 lying around or doesn't have the credit to get a loan for $700,000," go to the head of the class.
A natural question is: Who are the people least likely to be able to compete with corporate lawyers or have $700,000 lying around or have good enough credit to get such a loan? They are low- and moderate-income people and minorities. Many own cars and have the means to get into the taxi business and earn between $40,000 and $50,000 annually, but they can't overcome the regulatory hurdle.
Enter Uber and Lyft, two ride-hailing services. Both companies use freelance contractors who provide rides with their own cars. The companies operate mobile applications that allow customers with smartphones to submit trip requests, which are then routed to Uber or Lyft drivers, who provide taxi-like services with their own cars. The legality of these companies has been challenged by taxi companies and politicians who do the bidding of established taxi companies. They allege that the use of drivers who are not licensed to drive taxicabs is unsafe and illegal.
Uber and Lyft drivers like the idea of working when they want to. Some have full-time jobs. Picking up passengers is an easy way to earn extra money. Everyone is happy about the arrangement except existing taxi companies and government officials who do their bidding. Taxi companies retain much of their monopoly because Uber and Lyft are prohibited from cruising. They are also prohibited from picking up passengers at most train stations and airports. But that monopoly may not last much longer. Let's hope not.
Well, the insurance company should know that the insured vehicle is being used that way.
Everyone needs to know that these rules are for SAFETY reasons.
The government will ensure your safety through licensing of taxi drivers and better yet, the companies that get these licenses will ensure financial support to the corrupt government “contact point” for requiring that individuals use their services ONLY.
Remember “SAFETY” is now the “buzzword” for all restrictive laws granted by our government.
Interesting article, but it was probably out of date almost before Walter Williams started writing it. Ridesharing services like Uber and Lyft are an industry in major transition, and as things change a lot of the information that may have once been true will no longer be true. Uber's recent doings in New York City are a good case in point, to the extent that I'm surprised the author cited NYC to make his case. In NYC, you have a scenario unfolding that defies almost every point raised in this article:
1. If you check out Uber's customer portal for NYC riders, you'll see that for fixed-price routes for the airports, Uber actually charges more than the NYC taxi "monopoly" charges.
2. Uber is now PART of the "monopoly" in New York City ... to the point where Lyft is facing legal challenges from both Uber and the NYC Taxi & Limousine Commission who are trying shut Lyft down.
Personally, I think these companies are only successful in the short term because their business model is built on having access to a huge pool of drivers who have no idea how to properly value the services they provide. As more and more people figure out the game Uber and Lyft are playing, these companies will no longer be competitive in the market.
I agree. If the insurance company wants to know—assuming it’s part of the policy—if the vehicle is being used for business, the owner/operator should tell the truth.
So much stuff in the Taxi debate.
Hailing at Curb-side pick-up vs called radio dispatched.
Medallion systems vs Black Car vs Hybrid vs Van Service.
Drove a cab in high-tone neigborhoods shuttling maids and tutors to mansions. Drove an overnight shift in the ghetto when BBK was big, before the Latin Kings and Bloods came in. Stopped driving after I came home with a cut on neck. Mrs Hero asked me what happened. When I told her a 5” tall, 14 year old tried to rob me she freaked.
Driving a Taxi is dangerous. For the most part, drivers don’t make much. Fleet owners and medallion owners make the money. It’s a rough buck, but it is what it is.
Two pieces are most important here.
Liability - If an accident occurs, who pays? Without adequate (Livery/Taxi) insurance passengers won’t be covered. Part of state issued licensing is certification of insurance and bonding.
Security - “Most” drivers have to provide identification, some are finger printed, are issued a unique ID and at least have a rudimentary understanding of a locale. Fleet cars are often uniquely decaled and numbered. A passenger knows a taxi on sight.
>Here’s my taxi question. If a person is law-abiding, has a driver’s license, has a car or van that has passed safety inspection, and has adequate liability insurance, is there any consumer-oriented reason he should not be able to become a taxicab owner/operator? Put another way: If you wish to hire the services of such a person, what right does a third party have to prevent that exchange?
The question is outrageously hypocritical - before even being asked, the prelude concedes three different ways a third party could prevent the free exchange of services, all of which are payoffs to the government and its favored special interests.
If it can deny a license (for not meeting government standards), deny certification of safety (to government standards), force a payoff to an insurance company (who lobbied the government to force you to do business with them whether you want to or not), then adding yet another condition is a trivial step.
I’ll make the counter argument for you... With services such as uber the transaction is done completely electronicly. Eliminating the need for cash. That one point makes uber safer. Riders use their credit cards and tied to a phone. Assuming a crime takes place everyone is known before entering the vehicle.
One could argue that uber and lyft are much safer than a normal taxi transaction.
Yup!!.....For safety's sake we need more muzzy immigrants to drive the cabs Americans wont drive........./s
While handing out ‘licenses’ to illegals and continuing the revolving door policy for drunk/impaired drivers....
And here I thought the Law was to be applied equally and evenly. I see no authority for ANY monopoly; especially those headed BY govt.
I’m a big fan of sunset clauses in laws. Set it at 3 years and see what change happens when it expires for a year. I’m a bigger fan of liberty, though. Let me decide and leave me alone to face the consequences.
They’re successful because they’re responsive to market forces. In a free market the consumer is king.
I'm sure that's what a lot of people tell themselves for reassurance when they hire illegal aliens to do their landscaping work.
There’s a guy that drives an old beat up pick up truck around the neighborhood before garbage pick up. Sometimes it’s the day before or the day of. Americans throughout the community come out and give him their scrap metal willingly. It saves them a charge for bulk pick up. It is market based recycling. It’s done without any government meddling. Shockingly, in Illinois there is no licensing requirement to pick up scrap metal. It’s a win/win/win.
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