Regulation

Travis Shrugged

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New York's cabbies go on strike to protest new city regulations:

Since Oct. 1, all yellow cabs have been required to carry an onboard GPS and credit-card machine, as well as a television on the back of the driver's seat that plays advertisements and short programs. The devices were required as part of a 2004 deal that increased fares by 25%.

According to [Taxi Workers Alliance chief Bhairavi] Desai, there are glitches with the GPS devices, which she said slow the meters and take minutes to load. The TVs heat up the driver's seat, and credit cards lead to a 5% surcharge for cabbies—problems she said the city has ignored.

[Via Roderick Long.]

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  1. Someday a real rain will come and wash all this scum off the streets.

  2. Perhaps those cabbies would prefer a more thorough deregulation of the industry. That way, they could make nothing, and probably still have to have credit card machines and GPS. Of course, those TVs are just stupid.

  3. I get what they’re saying.

    As a native new yorker, I can see the GPS used to keep people from getting ripped off, but most of us New Yorkers know where we are going, so I assume that i’d be more of a tourist tax.

    But what the heck, deregulate the entire thing… this way on rainy days I can make a few extra bucks by slapping a sign on the window of my car!!

  4. Lamar,

    I’m confused as to your point:

    Are you asserting that if they deregulate the taxi industry, are there are enough drivers who like driving so much that they could supply the entire demand for taxi services for no charge?

    Or do you just think that people who aspire to be cab drivers are so stupid that they would operate at a loss indefinitely and would enter the industry even when it is unprofitable?

  5. Lamar,

    I totally agree with you that the cabs should be less regulated. And they would probably all have credit card machines then, because otherwise they would lose customers pretty quickly. However, I doubt they’d have to have GPS. I don’t think anybody’s ever going to turn down the cab in front of them because they want to wait for one with GPS.

  6. tarran,

    The biggest barrier to entry for cabbies is the medallion, which is obscenely expensive. Take that away, and taxis could operate at a somewhat lower fare and still make money.

    The number of drivers would stabilize at a number that allowed most drivers to make a decent profit.

  7. I don’t know any of them, but I doubt there are many John Galts amongst the union members. Their concept of “economic justice” probably does not extend to a total deregulation of the industry. And I doubt their union welcomes non-union competition. Not that all the layers of regulation are not imbecilic anachronisms.

  8. This should be interesting. Usually New Yorkers tend to side with the strikers in transit matters–for about 1 day. Then they experience one awful day of transit and their sympathy goes straight down the tubes. Striking transit people spin as hard as they can to blame the city but the resentment almost always ends up on the strikers.

    The city over-regulates the cabs, the medallions are super-expensive, and the drivers whine now but if you opened up the market to anybody who wants to pick anyone else up for money, they will scream bloody murder. They’re all jerks.

    Who will get screwed here? Commuters, mostly.

  9. Tarran, Brian24 gets what I’m saying. With competition will come more services, such as credit card machines and, arguably, GPS. While I wouldn’t wait for a GPS equipped cab to go crosstown, I might if I were going to the airport.

    With the number of cabs not limited by medallions, there would be more drivers willing to accept less money. Taxi corporations would hire people desperate enough to work for bottom of the barrel wages. Their money would be made on volume. Independents would get pushed out (to the extent they haven’t already been pushed out).

  10. Doing away with the medallion would work miracles for NYC

  11. Brooklyn should secede from NYC.

  12. What’s the nature of the 2004 deal? Was it unfairly imposed or something? Otherwise it seems like the Taxi Worker’s Alliance is trying to back out of a deal they agreed too. At the very least, I hope they are also demanding that the rate increase be postponed until the situation is worked out.

  13. Brooklyn should secede from NYC.

    If it gets us some damn cab service, I’m all for it.

  14. it seems like the Taxi Worker’s Alliance is trying to back out of a deal they agreed too

    That’s exactly what they are doing.

  15. I got into one of these cabs the other day, and I thought it was a joke. For me it served no purpose. I knew where I was, and I couldn’t see my destination on the map. I didn’t notice a zoom feature. Maybe I missed it.

    It does more than GPS. It’s similar to the video they put in elevators these days and only slightly more interactive. You can push “news” and get the news.

  16. “The devices were required as part of a 2004 deal that increased fares by 25%.”

    Were drivers complaining then?

  17. Brooklyn should secede from NYC.

    If it gets us some damn cab service, I’m all for it.

    I go all over. I take people to the Bronx, Brooklyn, I take ’em to Harlem. I don’t care. Don’t make no difference to me. It does to some. Some won’t even take spooks. Don’t make no difference to me.

  18. a television on the back of the driver’s seat that plays advertisements and short programs.

    So now I have to pay extra to get yammered at by an ad machine? WTF?

  19. “However, I doubt they’d have to have GPS.”

    I thought the GPS was there to keep the cabbies from screwing off. If you know where all your cabs are at any given point, then you know who is really working and who isn’t. I know that truck drivers went balistic over GPS for that reason; no one wants their boss knowing they are hanging out at the local strip club rather than working. I don’t know how cab drivers are paid. Maybe they work strictly for tips or a cut of the fares which means they have no incentive to screw off. But if they work by the hour, my guess is that is the reason they object to GPS.

  20. Ahh, so if more cabs are owned by corporations, the more likely they are to want GPS.

  21. You ever seen what a .44 Magnum can do to a GPS unit?

  22. Were drivers complaining then?

    No, because they already got what they wanted.

    I go all over.

    That’s because you’re a crazy skinhead whackjob. You’d have to be to actually follow the rules and take people where they want to go.

  23. Why not just open up the cab business to anyone who can pay a nominal fee to the city and has a car that can pass a safety inspection? In return for that, I would gladly not require the cab drivers to have GPS or TVs or anything else they don’t want to besides a safe car. Something tells me the cab driver’s union wouldn’t like that very much though.

  24. I rarely take cabs, but I would think the GPS to be a value to the customer who can find his location and his destination and see how many miles it is so he can get a decent approximation of what the fare is going to be.

  25. “I rarely take cabs, but I would think the GPS to be a value to the customer who can find his location and his destination and see how many miles it is so he can get a decent approximation of what the fare is going to be.”

    That makes it difficult to scam the tourist by taking a crazy rout. I have taken cabs in cities all over the world most of which I didn’t speak the language and have never had that scam happen to me. I wonder if that is just an urban myth.

  26. That’s because you’re a crazy skinhead whackjob. You’d have to be to actually follow the rules and take people where they want to go.

    The days go on and on… they don’t end.

    All my life needed was a sense of someplace to go. I don’t believe that one should devote his life to morbid self-attention, I believe that one should become a person like other people.

  27. John, I’m not sure the routing scam is the point, it’s more a case of just knowing the cost makes the cab a better option in some cases. If you’re going 20 miles, maybe public transit is a better option, but if you’re going 3 miles maybe a cab is a better option. Why wait around 20 minutes for buses and trains when for only a few bucks more the cab can get you there in less than 10 minutes?

  28. The incentive is against wild rides because, at least in NYC, they get more money by taking more people short distances.

  29. Nah, I got scammed in Rome. Although I doubt GPS would have helped any. And I’ve had guys try to scam me in New York, as they mistake my southern accent for a sign that I’m new in town. Mostly, I think GPS could help the drivers, because the days of a cabbie knowing where the fuck he’s going seem to be long gone.

  30. Good point Russ. You are right to Lamar. I never thought about that.

  31. Oh — and the strike was a dismal failure. The picketers, few that there were, kept yelling about scabs. Isn’t a scab someone who is hired to replace a striking worker, not just a worker who refuses to strike?

  32. “Mostly, I think GPS could help the drivers, because the days of a cabbie knowing where the fuck he’s going seem to be long gone.”

    Unless you are in London. That is not a myth. Those guys really do know their stuff. Two hardest jobs in the world are London cabby and Park Ranger at Gettysburg. One has to know every tiny street in one of the largest most complex cities in the world and the other has to play and win stump the chump with every civil war geek in America.

  33. The city over-regulates the cabs, the medallions are super-expensive, and the drivers whine now but if you opened up the market to anybody who wants to pick anyone else up for money, they will scream bloody murder. They’re all jerks.

    Typically, the drivers are not medallion owners, so I don’t think many of the drivers would scream bloody murder if the medallion system were scrapped. It doesn’t benefit the drivers–it benefits the fleet owners.

    Describing the device the city has required as a GPS tends to cause confusion. Most people here believe, reasonanbly enough, it’s like the GPS for cars, to plan a route from one point to another. But as John suggests, it’s actually a device to track the driver’s location at any given moment.

    Finally, claiming the Taxi Workers Alliance is backing out of a deal made with the city to raise fares 25% is also misleading. The Alliance is not like typical municipal union; it does not have a contract with the city. It’s really more of a voluntary association than it is the kind of union most H&R commenters love to hate.

  34. If the private cab companies wanted to put in devices to track their employees’ locations, more power to ’em. But where the HELL does the city get off ordering businesses to keep Orwellian tabs on their employees at all times?

  35. There are some surprisingly anemic defenses of free-market taxis here today. What about the power of branding to raise taxi standards? If you’re a tourist worried about getting ripped off, you might look for a brand of taxi with a best-route guarantee. If there’s a demand such a company would spring up. What else might we expect? How about nice cabs that don’t smell or make you feel like a criminal behind glass? Ones available at all hours of the day, especially around rush hour?

    Taxis are easily the least free market in most municipalities. It should be a libertarian project to free the taxi market in one or more cities to demonstrate just how much better it could be.

  36. It’s really more of a voluntary association than it is the kind of union most H&R commenters love to hate.

    True; and this Alliance only represents a fraction of drivers. The major parties are the fleet owners and the Taxi & Limousine Commission.

    Unless you are in London.

    Yeah, a starker contrast with the situation in NYC is hard to imagine. Here they are supposedly required to know Manhattan thoroughly, and the “major destinations” in the outer boroughs (which in practice means “the airports”). In my experience most drivers know almost nothing about the outer boroughs. Which is not surprising since most of them refuse to travel there.

  37. I have taken cabs in cities all over the world most of which I didn’t speak the language and have never had that scam happen to me. I wonder if that is just an urban myth.

    I was in Greece this summer, and I took a cab from a major hotel in Athens to my mom’s condo. I had done the route 5 times in that week, and the fare was never over 5 Euros. The final time I did the route I picked up a cab at the hotel.

    Once we arrived at the condo, the driver quickly reset the meter (luckily I had been watching the meter — for some reason this guy seemed shady) and turned and said the fare was 10 euros. I explained to the cabbie that in fact every other time, the fare was 5 or under. He said that well the meter read 7 (it didn’t, it read 5 before he turned it off) and because this was a radio dispatched taxi (depsite the fact that I picked it up at a cab stand outside the hotel) there is a booking fee of 3 Euros.

    I told him to pound sand and said he can take 5 euros or leave it cuz that’s all the route was worth or we can wait for the cops to sort it out. He took the 5 and left.

  38. I have the perfect big-government solution to the GPS and credit card swiper: Make the cabs follow strict routes like the buses and subways have to. Problem solved. First in line, first served. One fare for all. Tokens only. You no likee the route, you no have to takee the cab. And if you want the TV off, that’s another token. Because I’m all about choice.

  39. I guess I have been lucky warren. Either that or too stupid to know I was being robbed, which is always a possibility.

  40. Them aiports in NYC should have enough bargaining power to decide upon taxi standards. I do not see why government should get involved. The only thing what is needed is for airports to decide what taxis can enter the terminal ramp, and which not. Problem solved.

  41. Lamar,

    Having read your response, I am even more puzzled:

    First, brian said something different; that a deregulated market would have more drivers until the prices fell to the point where becoming a cab driver didn’t look attractive anymore to new entrants. Of course, this means that the guys already in the market are making enough money that they are still willing to drive a cab.

    Your original post implied that people would be driving for nothing.

    What I am taking away from this conversation is that you are insisting that people willing to work for less money than you approve of be denied jobs just so that a lucky few who have access to medalions can live comfortably. Which is a pretty vile bit of elitism, if you ask me. Perhaps you don’t realize that medalions are generally rented out to poor lunks who do the actual driving but kick back a significant portion of their fares to the guys who have the medalions? Thus, instead of a lucky few drivers who get high wages, you have a situation where many poor people are denied access to jobs, and a lucky few get to slave away so that the politically connected of New York City can make money off of their backs.

    I think you consider yourself a leftist (it’s hard to keep everybody straight reading a spottily as I do and I apologize if I am wrong) which means that you think you are helping people out by calling for restrictions on the supply of taxis. Honestly, though, that policy has the effect of hurting the poor not helping them, and I think you should reconsider your support of it.

  42. I have taken cabs in cities all over the world most of which I didn’t speak the language and have never had that scam happen to me. I wonder if that is just an urban myth.

    When I lived in Chicago I knew where I was going and I had taxi drivers frequently try to pull that scam on me, until I corrected them. I must have looked like a tourist to them.

  43. Tarran,

    That is how all schemes to restrict supply end; with a few politically connected people getting rich at the expense of everyone else. I don’t care how well intentioned such schemes are, it is inevitable that the politically connected will benefit most. I would rather take my chances with the market and let the smartest or the hardest working benefit. But I am not a connected choney.

  44. I would rather take my chances with the market and let the smartest or the hardest working benefit.

    The smartest and hardest working will inevitably collude to restrict supply. Government, in its desire to break up the trust, inevitably becomes a third party in the trust.

  45. Re: Jerry’s comment about the NY/NJ metro area airports.

    The Port Authority is the lessee of JFK, Newark and LaGuardia. The PA is an agency co-owned by the states of NY and NJ, so expecting “the government” to stay out of running the airports is perhaps wishful thinking.

    According to the PA’s website:

    The Port Authority is a financially self-supporting public agency that receives no tax revenues from any state or local jurisdiction and has no power to tax. It relies almost entirely on revenues generated by facility users, tolls, fees, and rents.

    I’d like to have a forensic accountant squint at both their operating and capital budgets before I accepted that “no tax revenue” claim. Frex, I have my doubts that the PA is paying market rents to the states and cities for the various facilities it operates. There’s also the question of the PA’s access to state bonding power and other governmental functions.

    Cancelling the medallions would bring up the problem of extinguishing their owners’ property rights. IIRC, the medallions trade for a hefty price, and according to this page

    Three-quarters of all individual cabs are now owner-driven.

    Last time I was in NYC, I had to take a cab from Manhattan to Roosevelt Island. RI has about 2 roads, and the driver got lost! Judging by his accent, he may never have been there before.

    Kevin

  46. “”””Mostly, I think GPS could help the drivers, because the days of a cabbie knowing where the fuck he’s going seem to be long gone.””””

    As far as I could tell, the GPS map was only in the backseat. This would not help the driver. It’s hard to get lost in Manhattan anyway.

    “”””The incentive is against wild rides because, at least in NYC,”””

    Wild rides? All the rides seem normal to me, but my visiting friends always hang on as if it’s something too scary to ride at the state fair.

  47. Tarran,

    I think you might misunderstand me. I was pointing out that cabbies like to fight against regulation, but it is the regulation that puts them in such a sweet position. The artificial scarcity created by the medallions allows them to charge higher rates and get away with less service than if there were true competition. If they claim that regulation is killing them, they should wonder what it would be like without regulation. I suspect they’d have to incur the expense of the credit card, GPS and tv gadgets to keep up with competition, but they’d also be getting paid less (i.e., a market wage).

    I wasn’t suggesting that I have a particular wage level that I approve of. If anything, I think driving around town is worth very little, and cabbies earn too much right now.

    The truth is that people who drive a yellow cab for a living are screwed either way. Restrictions and rules result in corporations hogging the medallions and many times they are the only ones rich enough to navigate the restrictions. Take away the regulations, and the wages will go so low, that the only money to be made will be in volume.

    If its a wash, why not at least give competition a chance and give NYers a break?

  48. Im a NY’r and rode in a cab (well, 2) last night, and had a little firsthand education on the ‘strike’

    I dont know what the gizmos really have to do with it – if you asked riders, they’d say, ‘who gives a shit about GPS? Credit card machine, OK, but please dont put a TV in the back.’…. seemed to me the cabbies werent really participating in this ‘strike’ anyway. The city was clogged with em last night. BUT = the first one I get in, he tells me its “$10 PLUS the meter”. Im like, “What?” he says they’re on strike. I say, you’re on strike? Then why are you out here working. He kicks me out of the cab. I wave over a cab right next to me. I get in, he takes me home, and charges me only what’s on the meter. After I pay I ask him about the ‘strike’… he says, “oh, right, yes, they are on strike…” I ask why he’s working. He seems to fumble a bit, then goes, “well, it’s all a bunch of bullshit. I went to the cab stand and all the cars were gone. Everyone is working. But some companies are not. We dont talk about it.”

    I dont really get it. The GPS and CC machine things are not necessary… nice, but not necessary… and the TV in back is stupid stupid stupid. They’ve tested them before and customers just want to turn them off. THe city wants to create ad revenue. They’re not happy with the shithole subways covered in advertisements… they want to pump them in your face while you’re trying to get crosstown. The whole thing just smells stupid

  49. John,
    Me thinks you were too ignorant to know the difference. If you don’t know the usual prices, cabbies, especially in countries where there are no meters, will happily rip you off. Or they could pull on you what a cabbie in NY pulled on me once, which was take a route that was similar mileage-wise, but far worse traffic-wise. Instead of going down from the East 80s on 2nd, he decided Central Park West to Times Square was the ideal route. I yelled at him for whole route and gave him $0 tip*.

    Oh and the owner operated thing is b.s. There are “benefits” for being owner operated, but most owner operators drive something like 2 hours a month to keep the status and the associated benefits.

    * This is contrasted by a cabbie that accidentally drove past my destination, turned off the meter and offered me a lower price than what it should have cost.

  50. I have 3 friends who own-operate cabs… they’re actors. 🙂 They feel it’s a good deal. They work less than 40hrs a week…but still, its not some token deal

  51. the first one I get in, he tells me its “$10 PLUS the meter”.

    Pretty sure that’s illegal in NY, and could cost him his medallion.

  52. Last two times I had to take a cab in NYC they tried to completely screw me over.

    One of the times I had a late-evening flight that was cancelled, and they weren’t getting me out until the next morning. All of the LGA-area hotels were full because of the multiple cancellations, so I had to go out to my grandparents’ house in Nassau County. Fare to Nassau County is supposed to be equal to the fare to the county line, and then 2x the fare from that point on. He turned off the meter once we got on the LIE and refused to stop off anywhere or turn it back on, and then looked up in whatever “book” he had to say the fare was $80. This was back when I was young and naive, so I paid it without fighting. Filed a complaint with the licensing board, they told me I had to go to a hearing in NYC, which was no good considering I didn’t live there.

    Second time was more recent. Spent a month in NYC for business back in February, going back and forth to home on the weekends. Generally travelled via the car service my employer provided, but for some reason they had forgotten to call for it one afternoon, so I had to grab a cab (always fun at 5 PM on a Friday, considering shift change times and all). Was headed to JFK. Consider that the fare to JFK is supposed to be fixed at $45. Consider that my office I was working at was at around 42nd & Madison, right near Grand Central. Picked up there. He not only had the meter on for a normal fare, he went the complete opposite direction he should’ve been going, ending up at about 54th. Then told me that he couldn’t take me to JFK because there was something wrong with the cab’s brakes. Tried to collect a $10 fare for that. Told him to screw himself, didn’t pay.

    Not quite sure the point of that rant, except for it’s the reason why I don’t empathize with the cabbies too much, and why I always prefer to use the private car services.

  53. Pretty sure that’s illegal in NY, and could cost him his medallion.

    It could have been part of the extra fares they put in place during the strike in order to cut demand. Or yeah, it have could have been a scam.

  54. In MN – if I plan on going out at night I usually always take a cab home. No matter what time of the day or night – the cost of that ride from downtown to my house will be between 14 and 16 bucks. I always keep a $20 bill for this very purpose. Last weekend I got in a cab and was paging through a paper. When we got my house the meter read $24 and realized he took the longest possible route around the lakes between downtown and my house. So yes – scams happen. And he only got paid 20bucks.

    Minneapolis just got rid of the laws limiting the number of cabs allowed to operate in the city. Within a couple of years – there will be no limit. It will be interesting how that changes things.

  55. I think “putting extra fares in place” is itself illegal. The meter is there for a reason in this quasi-monopolistic market – if you want the benefits of highly restricted entry, you get the burden of price controls.

  56. “I always keep a $20 bill for this very purpose.”

    That’s what I always did. I figured, if the cabbie wants to lose his cash tip, fine with me.

  57. “””I dont really get it. The GPS and CC machine things are not necessary… nice, but not necessary… and the TV in back is stupid stupid stupid. They’ve tested them before and customers just want to turn them off. THe city wants to create ad revenue. They’re not happy with the shithole subways covered in advertisements… they want to pump them in your face while you’re trying to get crosstown. The whole thing just smells stupid”””

    Remember the recordings of the celebrity voices telling you to buckle up? That was real annoying. No idea too stupid.

  58. Wait a minute, they added invasive in-cab advertising simultaneously with a huge fare hike? What amazing gall.

  59. There’s also a law that says cabbies have to have an EZ Pass for the bridges (and pass along the savings to the customer). They rarely do, and that ends up coming out of their tip. Of course, they always try to charge the higher amount…

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