Ron Sherman: Yellow cabs vs. Uber: Tale of the tax tape

It's easy to take yellow cabs for granted. Taxis are ubiquitous in the city, moving 500,000 New Yorkers, tourists and business travelers daily.

But what do they really contribute to the local and state coffers? With new competition like Uber and all kinds of assertions and assumptions being made about the value of these businesses, it seemed like a good time to provide New Yorkers with the facts.

In 2015, yellow-taxicab owners, drivers and passengers are estimated to contribute to the city and state:

-$94 million to the Metropolitan Transportation Authority (through a 50-cent per fare MTA surcharge).

No matter how you calculate it, Uber drivers and passengers contribute far, far less than yellow-taxicab owners, drivers and passengers.

Unlike taxis, Uber does not pay a direct MTA surcharge. Unlike taxis, Uber has no requirement to make any of its vehicles wheelchair-accessible. Unlike taxis, Uber does not pay $1,000 a car in city road tax. And Uber pays no medallion or medallionlike fees whatsoever.

How is it not a legitimate business?

The burden of proof is on you here.

An app that connects people who need a ride with those offering rides is brilliant, innovative, and exactly what America is all about.

The government backed taxi monopoly is the kind of crony capitalism all conservatives should strongly oppose.

In my state, all Uber and Lyft drivers are required to have a minimum of $1,000,000 liability coverage for death, personal injury, and property damage per occurrence and uninsured and under-insured motorist coverage of at least $1,000,000 per incident. So, the insurance issue is a canard, at least where I live.

I agree that conservatism is about limited government. I just don't see a valid role for government in establishing and enforcing the monopoly provision of local transportation services, under the guise of protecting “safety” or “reliability.” In jurisdictions like NYC and Philadelphia, the government (through a taxicab authority) has established a ceiling on the number of licensed “official” cabs. In Philly, for example, there is a limit of 1,600 taxi licenses. That's why the licenses or “medallions” often cost $1,000,000 or more. As a result, very few medallions are owned by the drivers. Instead, they are owned by investors, who then contract with drivers. The drivers, in turn, “lease” the vehicle from the investors for between $80 and $100 per 12-hour shift. The drivers keep the fare revenue in excess of the lease amount and the cost of gasoline. Typically, there are two drivers per day, per vehicle, each working a 12-hour shift.

Um, no.

Legitimate defined: Look it up.

Facts on how uber entered various markets and ran roughshod over existing local laws are public record: Use that tool in front of you.

If San Francisco, Seattle, Portland, NY, Chicago — and other liberal dens of cronyism and whatever metaphor is applicable — want to run their cities that way, then how is it Conservative to tell them how they should run THEIR cities?

If it’s YOUR city, then DO SOMETHING ABOUT IT, but do NOT tell me that our area needs to return to the sh!t quality services, smelly taxis, questionable drivers and wildly-varying fares just because idiots want to support a liberal, San Franciso-based company that really does NOTHING insofar as you are describing other than skimming off the top, themselves setting the guidelines that local government does in the absence of uber. WE don’t have a monopoly, yet fellow Conservatives see fit to assert that our area must march in lockstep with a blanket view of services DESPITE our ‘local’ control. How is that ‘Conservative’?

I’d rather have my local elected government dictate the services, licensing, rates and insurance requirements than a for-profit enterprise that cares nothing about local laws (ALSO public record).

To assert otherwise isn’t Conservative, it’s anarchy. PERIOD.\

One more thing: How pathetically-stupid is it to resign to ONE corporate app to control ALL taxi services wherever they see fit to put their rubber stamp (does anyone truly believe there’s no cronyism involved in many of these transactions? Puhllllllease!) when the same could be offered locally if anyone saw fit to do it?

Microsoft suddenly becomes a euphemism for uber...analogous, imho...and hypocritical to support a burgeoning corporate entity that demonstrated right out the gate it wasn’t going to follow local laws...i.e., ILLEGITIMATE.

The insurance isn’t worth the paper it’s printed on: It’s all from offshore...no domestic carriers will touch it.

If it were, uber wouldn’t be settling 100% of its legal cases. In essence, they are self-insured with no legal requirement to do so and only PR dictating payment of claims.

I really don’t understand this emotional attachment to a liberal corporation that demonstrates illegitimacy at every turn by breaking local laws. As a Conservative I don’t run around telling others how to run their cities yet many at FR do exactly that, thereby promoting anarchy whereas in our market it is an exercise of local control.

What really befuddles me is the absence of entrepreneurialism insofar as competitive products and services. Many areas should have seen taxi companies adjusting to providing services to a market if there were genuine public demand, but it has never developed that I have been able to find, resulting in an ‘uberesque’ monopoly of services from where I sit.

Competition normally fills in the gap; I’m head-scratching why it has failed to materialize if uber-type services are really in such demand...

Supply & demand...that’s supposed to be the model yet there are no competitive services to uber. We’re not talking about a high-tech gadget...just livery services. If uber
-type services are in such demand as most supporters assert, where are it’s competitors? Seems un-American to me...

Here, the insurance carriers have to meet fairly stringent capital requirements, customer service standards, etc. set by the Commissioner of Insurance. A nice piece of legislation was passed in the Spring and signed by the governor that represented a compromise among uber, the traditional licensed cab companies, and the insurance companies. The customer was the big winner, as the law eliminated minimum, but not maximum, fares, set higher insurance requirements for all drivers (formerly, licensed cabbies only had to carry $25,000 of property insurance and $50,000 in liability), and prohibited local jurisdictions from setting limits on the number of licenses issued.

As for the absence of transportation entrepreneurship in large cities, there is little incentive for innovation and entrepreneurship in a heavily regulated, monopoly environment. That's why the uber model had to circumvent the existing framework; it provided no room for profitable innovation. I have some sympathy for incumbent cabbies who have seen their business eroded by uber and lyft. They are now just as much victims of the broken system in many cities as the customers have been for decades. (My sympathy is limited, however, by the fact that many of them benefitted in the past from the monopoly power granted them by local politicians.)

I don’t know how it is in you state, but in ours there are domestic (admitted) and foreign carriers. Those that are domestic are vetted by the insurance commissioner just as you assert and have to meet financial requirements to keep that rating.

Those that are ‘non-admitted’ are not vetted and considered ‘non-standard’, never being vetted for capital requirements.

I would be shocked to learn that uber in your state isn’t also using James River, a Bermuda-based carrier (offshore). No domestic, US-based carrier will touch the risk of uber.

If you didn’t know it, uber also hides its liability behind a shell corporation called Raiser to protect the app-based uber from its drivers’ liability.

It sounds like your area had a similar problem to ours before our locally-elected leaders stepped in to make things safe for the public.

Again, in our area there are at least 6 different cab companies (no monopoly), decent rates and services (AND insured by vetted carriers) and we told uber to eff-off. I think the lesson for many areas is already demonstrated out there without capitulating to a lawless corporation riding an emotional wave of what I term an irrational wave of public support...

The state legislature stepped in to design a compromise between über and the existing cab companies. The local governments, who profited from the local monopolies they granted, would not have otherwise given up their control of the market.

You say you have no taxi monopoly in your area. Is there free entry as long as the new entrants meet insurance, vehicle-safety, and driver-background checks? Is there a fixed number of licenses? What are the annual or one-time license fees? Is there a minimum fare? Do the companies have to provide 24/7 dispatch service. Do the cabs have to pick up customers who hail them on the street? How much freedom, in other words, do the companies have to operate as they see fit, assuming they meet insurance and safety standards?

Your area appears to have a very pro-consumer approach to taxicab operations. That has been the exception, rather than the rule, in most jurisdictions (large and small). It seems like uber could, if it wanted, meet the requirements established there. What was it that caused your city to reject them? Concerns about insurance, background checks, vehicle safety? Our recent experience suggests that all of those concerns could be addressed, at least in principle, but maybe it was their basic business model.

They refused to be defined as a ‘taxi service’, which was the standard by which they amended the regulations, requiring each driver to be licensed and uber being the ‘taxi company’ (in essence).

Net result: Their business model is insulating uber from the liability of its drivers technically employed by Raiser LLC and they can’t accede to having uber being labeled a ‘taxi firm’ (app firm only).

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