I’m often surprised by the responses I get here and elsewhere on topics such as Uber or Apple. I don’t think my opinions on these subjects are particularly outlandish. I’m not an Apple fan-boy so I accept that my general indifference to the MacCult is off-putting to those people, but Uber? How can anyone say anything outrageous about a car service?
You live and you learn so I’ll address some of the objections.
Objection #1:
competition (Uber) against a staid industry (taxi cab cartel) is ultimately beneficial, even if there are some kinks that need to be resolved. About passing on the costs, why do these costs need to be so high? Regulation is the problem, not Uber.
Me: I’m all for competition, as long as the rules are applied equally. Put one boxer in a ring with an anvil tied to his leg and another without the anvil and you don’t have competition. These new services are clever ways of evading the rules, which puts their anvil laden competitors at a disadvantage. Maybe there’s an argument for unfettering the traditional cab companies, but let’s not pretend that Uber is out-competing anyone.
Object #2:
“Now, the reason for those rules may no longer be operative. [True] Those rules may be corrupted or have become corrupted. [True] We can’t know that Until we think about why the rules exist. [Inoperative]” We didn’t much think about it until Uber poked that bag and dollars and customer satisfaction began falling out. And it’s not Uber vs, the establishment.
Me: Regulation of taxi services goes back a long time. One reason was to crackdown on robbery. Another was to relieve pressure on public roads. In modern times, cab companies welcomed regulation for selfish reasons, but so did the public. In fact, the public demanded it. Having a clear way to distinguish legitimate services from less scrupulous operators was best done through licensing. Maybe that’s no longer necessary and I am open to that argument.
Objection #3:
I agree with you 99% of the time, but…..
“I’m fine with that just as long as all of the services pay their share of taxes and abide by the same rules. ”
very Disappointing Zman…….is that the cityboy in you coming out?
Me: I don’t get this at all. You cannot have a human society without taxes. Taxes pay for government, a necessary bit of civilization. How much government we have is debatable, but taxes are not. Tax revenues must be enough to pay for the desired amount of government. Otherwise, you get vastly worse corruption than anything you see with taxes.
Roads are a public good. We build them and maintain them with government. Ideally, each of us pays for what we use of public resources. You pay for water based on your usage and you should pay for your road based on usage. Big scary trucks pay more than bicycles. Taxis pay their share of road use through licensing fees. Figure out how to bill Uber drivers for their road use as we do taxis and everyone is on the same level.
How can you object to that?
Objection #4:
The Zman hates UBER.
I frankly don’t get this.
UBER is just a car service that you contact thru an app on your phone,
rather than thru a phone call.
To me, pretty much a distinction without a difference.
It’s just easier for the riders and more efficient for the drivers
This is no different than hating on Amazon because it destroyed the brick and mortar book store model. (Just as blogs destroyed the letters-to-editor model.)
Me: I have no opinion on Uber as a service. I’ve never had a reason to use it. I’ll also note that I never heard anyone ever state an opinion about taxi regulation until the last year. For a century people were fine with traditional cab service. Then a tax dodging hipster alternative comes along and everyone is fishing around for a reason to hate taxis.
As to the comparison to Amazon, that’s not complete nonsense. Amazon avoided paying sales taxes. That was certainly part of their appeal. They also had access to zero interest money. Oligarchs hate small business so they cheered as Amazon gutted traditional retail. Now that retail is dead, Amazon is back collecting sales taxes. There’s a lesson there.
Objection #5:
UBER lets ambitious drivers get out from under the thumb of the medallion cartel.
That sounds good to me.Before UBER, the yellow cabs had a monopoly and provided monopoly quality
service – just like dealing a certain well known cable company.How can the Zman not like the break-up of this monopoly?
Me: I have never once defended the current arrangements. Frankly, I don’t care. If the people of NYC want to have a North Korean style taxi department, that’s their business. I don’t like most of what Obama does in his job, but if someone created Uber for assassins, I’d be against that too. Civilized people have civilized, orderly ways of solving problems.
My observation about Uber is they are simply a sophisticated attempt to circumvent local self-governance. That I will always oppose as it is the road to fascism and tyranny. Taxi regulation in NYC may be a mess in need of reform. Tearing up the rule of law to reform taxi service sounds like bad trade to me.
Objection #5:
The idea that cities everywhere do the same thing–proof that government must be serving their citizens–has not been supportable since NYC did everything it could to keep Thomas Edison’s electric light safe from the gaslight monopoly. What governments of all shapes and sizes can be relied upon to do everywhere–except Sandy Springs, Georgia–is obey some irresistible urge to reach out and touch everything. If it moves, tax it, if it keeps moving, regulate it, and if it stops moving, subsidize it.
Uber, Lyft, Curb, Sidecar. They may all become MySpace because we cannot know the future. Who cares? Now that Uber has cracked that calcified wall of inertia things will work themselves out because markets do that, and not because of but in spite of the cab companies and regulators.
Me: That all sounds great, but my complaint is not addressed here or anywhere. If you have a leak in your roof, you will call a roofer. If the roofer, after inspecting your roof, tells you that the whole roof must be replaced, you will demand an explanation. If his reply is “the guy who put the roof on was a crook and terrible at roofing” you’re going to want some proof of that. You are going to want him to show he knows who did the roof, when he did it and so forth. In other words, he will have to demonstrate his knowledge of the subject.
On this issue, I want to someone to explain why we have these regs? When were they passed? What were they intended to address? What are the consequences of getting rid of the regs? What are potential downsides of deregulation? In other words, an affirmative argument always addresses both sides of the ledger.
I’ll also note that deregulation is a massive screw job to the guys playing by the rules. Here we have a system setup by the men with guns and you did everything you were asked. Now, all of a sudden the men with guns change the rules and make your investment worthless? That has to count for something too.
Objection #6:
Regulation is just a power grab in the name of “the general welfare.” It’s never been anything else.
Me: Not always. The lack of regulation is no walk in the park either. By now you should know I’m no utopian. I think human populations evolve their problem solving mechanisms over time and often they dead end or worse. Maybe taxi regulation has reached such a dead end. I don’t know and frankly I don’t care all that much.
My only objection to Uber is in pretending they are some sort of innovative job creator. That, I think, is nonsense. They are privateers cannibalizing an existing business that thought it had paid sufficient protection money to the men with guns to keep privateers under control. Calling Uber “disruptive” is like calling Bonnie and Clyde disruptive to banking.
As I’ve said, if NYC decides to crush Uber or stop providing protection to their clients, that’s none of my concern. My preference would be for the city to open it up to all comers and see what happens. Cell service does change a big part of the service so it is worth letting that run its course before killing or celebrating it.
Now, get off my back about Uber ya bastards!
Your first post about Uber was a good one, quite shareable. Your defense, however, is a retreat into stilted theory. In reality, liquor licenses and taxi medallions are famous examples of guilds that extort excess profits and deliver shit service. And you know it’s virtually impossible to kill the guilds (change the laws). Now some people, using new technology and sharp lawyers, have created a way to skirt or route around this legal guild structure, and you call foul.
Well, maybe, but maybe not. If there are any smart conservatives out there who know which part of the taxi rules should be saved, let him speak now or take his old guild-fatted moneybags with him when he goes.
Many times in life, the way of progress is not to battle the existing rigged game, but to start your own new game and see if it can succeed. So no, they are not playing by the exactly the same rules, but maybe in this case, they shouldn’t be. They aren’t in jail, so apparently they haven’t broken federal or state LAWS. Maybe they are competing properly to that extent ….
And I’ve never understood why the anti-jitney laws are in force either. What kind of sense does that make? Inquiring minds want to know!!
This is the reasoning of the progressive. You declare your position as the right one by default, without even trying to make a case for it. Then you rig the game further by declaring you win unless someone can convince you otherwise.
Let’s flip it around and see how well you do. Pick one taxis regulation you would like to abolish and make your case for it. Explain the benefits, the potential downsides, the ways in which we can measure the success or failure of your change. Go ahead. I’m all ears.
The only observable point is that Uber, like all the trendy modern libertarian innovations, are an attempt to game the system, precisely as the groups that they replace were doing. They just game the system in a different way.
The problem is that there is a system that needs gaming. If it wasn’t, then those pesky libertarians wouldn’t have to game it while trying to make a living
Increased road usage fees based on consumption seems reasonable, but my uninformed assumption is that most of the taxes and licensing obstacles are not being used for the maintenance of infrastructure or the safety of customers.
All taxes end up in the general fund. Even tolls ultimately end up there because money is fungible. But, taxing on the basis of usage has the benefit of tying costs to usage. Gas taxes are an attempt to do that. Big scary trucks used to have state road taxes based on mileage. The taxi license is another attempt to peg costs to usage.
First, Z-man, I want to say that I *really* enjoy your blog posts. Your writing is clear and concise, delivered with a nice zing. I hope thousands of people will be reading and benefiting from your words for a long time.
However, this time your case is weak. Arguing against economic liberty and for a bloated, extortionate, tyrannical government bureaucracy is not a conservative position – just the opposite. Economic liberty has been tried here in America – and it’s been a smashing success. We’ve been moving away from that for the last hundred years, and that’s causing lots of problems. I’m sure you know this as well as I do. And as I said last time, this particular setup is *famous* for its mafia-like origin – and character – and results. These taxi licensing regimes are cronyism – period.
Because this situation has been so thoroughly explored, I feel like you’re asking me to defend why it’s a bad thing to get rid of my Stage 3 cancer. Yes, I suppose it would mean I’d still have to pay my bills every month, and continue being nice to my mother-in-law. Other than that I’m not seeing much of a downside.
Again, I think I already made this case in the first paragraph of my previous post, and you just ignored it. But since you don’t think so, I’ll play.
My pick: I think US anti-jitney laws should be repealed. That’s my thesis. And I don’t need to make up any theories as you suggest. There’s already plenty of evidence. Here are two stories that support my case thoroughly and clearly:
https://www.mackinac.org/2536
This 1999 article discusses how Detroit hadn’t issued a taxi license in 50 years, and how jitney services thrive anyway. They fill a need. They operate efficiently and they don’t cause trouble.
The benefit is lower prices, more efficiency and consumer choice at the low end of the market. Also the benefit is an avenue for low-entry-cost capitalism. That’s huge!
The measure of its success? Thousand of providers keep doing it.Thousands of people keep using it. I’m sure we can take more measures, if we like.
http://ij.org/dismantling-libertys-slaughter-house
This 1995 article discusses economic liberty more generally, and notes how disgustingly futile it is trying to fight city hall. In section IV, it gets down to cases, and mentions how jitney services operate worldwide, and then discusses how the streetcar monopolies lobbied against jitney services here in the US and exterminated them. It discusses how NYC hasn’t issued any taxi licenses since WW2.
No doubt we could update both of these stories now, but I expect our conclusions would be the same. And I’m sure we could find more of this with very little effort. This licensing bullsh*t is nothing but government-enabled racketeering. I’ve never used Uber, but I’m glad they are finding a way around the the guild + city hall gangsters.
To me, Uber has little to do with progressive ideas (except on style points, as you mentioned) or methods, but is merely another enterprise seeking economic liberty, which is certainly one of the main things our founding fathers devoutly wished (and worked) for.
If there truly is a concern about any qualities of the new services, I’m sure a simple, clear regulation requiring them to have certain precise insurance coverages would do quite nicely. There’d be no need whatsoever to have a massive, corrupt, competition-killing, gun-toting bureaucracy to stink up the joint. Matter of fact, I bet insurance companies could help the taxi companies the same way they would all the jitney drivers. Now that dash cams and iPhones, etc, are so cheap, eh? If there’s a few problems, well, that’s what insurance claims and the court systems are there for, no?
As far as paying taxes goes, they already pay gas taxes, at extortionate levels. They pay ad valorem taxes, i.e. vehicle licensing. Don’t they pay sales taxes and income taxes, too? What more is really needed here?
Once again, I enjoy your work. Love to see you tweak the proggies and the other confused idjits. Just couldn’t let this one go unchallenged. Thanks for the invite.
Interesting discussion. I feel I’m a man of the world, but I’m not familiar with jitneys- explain, please? And Z-Man- you must be a Howie Carr listener- with terms like ‘moonbat’ and ‘big scary truck’ making their way into your posts.
From the 2nd article I listed:
“Jitneys are a transportation mainstay in large cities around the globe. They run fixed routes and charge a flat fee, like buses. But they pick up and discharge passengers anywhere along the route, like taxis. They are smaller and more efficient than buses and less-expensive than taxis. They also are ideally suited to low-capital entrepreneurship.”
Thanks for the clarification- interestingly, the program won’t just let me say “thanks”!
Yes. I have been listening to Howie since he was filling in for Jerry Williams.
The dominant means for paying for the use of roads in the US is through fuel taxes at both the state and federal level. There is a very tight closed loop on usage and funding there.
The notion that medallion or license fees are in some way proportional to taxis use of the roads is generally absurd (a high six figure to low seven figure for a medallion in NYC – please show me the math on that one). The cost of a license should be set at the level that covers the admin costs of a licensing system and nothing more than that.
The other thing I do not think you are adequately considering is the distinction between the interests of the medallion owners vs the interests of the taxi drivers. I agree that the taxi drivers should be given a level playing field against Uber drivers in terms of insurance, etc. And the best way to level the playing field is to remove the cap on medallions so that lease prices come down to the point where a driver is indifferent between driving a medallion cab vs driving for Uber. San Diego recently went this route. Georgia has passed a bill in its Senate to do the same. The idea has been proposed in opeds in other markets. You can now, in the age of smartphones, have orderly markets with an appropriate degree of accountability from the people providing the service without resorting to a cartel type structure that prevailed for the last 80 years in many big cities. We now have alternatives to create trust, expose reputations and enforce accountability than the leaden, heavy handed bureaucratic model that was co-opted by the rent seeking crony capitalists, who would continue to constrain our transport options to crappy, overpriced and unreliable service were it not for Uber.
A decent analog for this situation is the phone network and AT&T’s efforts to squash anyone attempting to plug third party equipment into the network or to set up competing facilities. It took MCI the better part of a decade and what is likely the equivalent of several hundred million dollars in legal fees to break the iron grip of Ma Bell on phone service. Is that what you are advocating as the market entry model in situations such as this?
Fred Farkle is spot on in every particular. Then you say “This is the reasoning of the progressive. You declare your position as the right one by default, without even trying to make a case for it. Then you rig the game further by declaring you win unless someone can convince you otherwise.” His is the position of Smith, Hayek, von Mises, and Hazlitt. It is yours which is the progressive defense of government. Farkle has said that we have moved so far beyond the calcified state of an ancient arrangement that no reform is possible. Reform is consumed upon contact with the cartel, just as all reforming politicians are when they reach Washington. Businesses are not reformed, they are eliminated from existence.
All of the things which passengers in phone-app ride services will learn through experience are important to them will be instituted through the vehicle of customer satisfaction and the competition for that satisfaction, not to mention legal liability. And as to the roads, everyone who is using roads is paying through gas taxes, which are very substantial. In DC it is 23 cents. If a Lyft driver does 50k miles that is five grand, more or less, plus yearly registration fees. Add the federal tax. Throw an extra tax on Lyft drivers, if that’s what is in the public interest. Cars do not destroy roads, trucks do.
CLAY CHRISTIANSEN The best run and most successful businesses are precisely the ones that are least able to change when change becomes necessary.
VON HAYEK The astonishing fact revealed by economics is that order generated without design can far outstrip plans men consciously contrive. The socialist mind can conceive of order only as the result of deliberate arrangement.
KRUSHCHEV Economics is a subject that does not greatly respect one’s wishes.
GARET GARRETT By its very nature private capitalism limits government.
ELEANOR ROOSEVELT It has been a long fight to put the control of our economic system in the hands of the government.
VON HAYEK It is a revealing fact that few planners are content to say that central planning is desirable. Most of them affirm that we are compelled to substitute planning for competition by circumstances beyond our control.
HILLARY CLINTON The unfettered free market has been the most radically destructive force in American life in the last generation.
MILTON FRIEDMAN The market gives people what they want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really a lack of belief in freedom itself.
Few people even know what liberty actually is, much less economic liberty–it’s source. True capitalism is the greatest expression of liberty. As Garrett wrote, the ghost that now inhabits the words laissez faire was once an unconquerable fighting spirit. It did not belong to capitalism. It belonged to liberty; and to this day its association with capitalism is valid only insofar as capitalism represents liberty. Capitalism is a talent, not a theory. Most capitalist are ignorant of the theory, and as likely as the nest man to be socialist.
This is a great teaching moment to be seized, and it’s not going to be taught by Bill Gates, the entrepreneurs of the ride services, or even their customers. Your readers clearly thought it would be you. That is your vibe, but apparently not your ride.
Great points on this thread everywhere, from the Zman through the commenters. The intellectual honesty and genuine back and forth are what makes this blog special. No I don’t agree with everything said here but I sure as hell enjoy reading it. Keep up the good work all. And if I have to have a default position, it would be let the markets evolve, as government bureaucracies have never invented anything.
It would seem that Uber is one of those things that not only crosses party lines but cult lines as well.