With a Straight Face, Taxi and Limo Trade Group Warns of the Dangers of Car-Hailing Apps Like Uber


San Francisco start-up Uber has a simple concept, use their phone app and they will help you find a car. Usually it's a vehicle that's a little nicer than a regular old taxi, but the point is still the same, a legal, licensed limo, cab, or towncar will come pick you up. 

Uber exist in 20 cities, including Washington DC, Toronto, and New York. Once again, it hooks consumers up with licensed, regulated cabs, towncars, or limos. Uber does not drive, it does not do anything except help its users use services that already exist. So why is the Taxi, Paratransit and Limousine Association (TPLA) acting like Uber consists of a fleet of Flintstones-esque vehicles, driven solely by child molesters and serial rapists? Why is Uber, and lower-priced like-models such as Get Cab and Ground Link, a "rogue service" where "the passenger is placed at-risk for personal safety, uninsured accident claims, fare gouging and other illegal activity"?* 

Because the free market ain't free, and the the transportation industry is a great place to find this demonstrated in particularly unsubtle fashion. Take New York City, where yellow cab medallions turn out to be better investments than gold. In order to acquire a medallion (which allows drivers to pick passengers off the street when they hail), as of June 2012, you must pay $700,000. Who is benefiting from that kind of restriction? Obviously the people already driving cabs or owning companies. Though 100 or so New York City drivers out of 13,000 are now trying out Uber, it may not be legal at all.  The head of the Taxi and Limousine Commission's current word on Uber is that drivers who use it to find passengers could have their licenses revoked or suspended. 

Absurd restrictions on the most basic of transportation modules is not just a New York thing. Pittsburgh, a city of 300,000 has 300-odd cabs (mostly Yellow); none of which can be hailed from the street, and many of which don't bother to show up except for pricey trips to the airport. Of course this has lead to the steel town having a burgeoning, illegal jitney cab industry, which mostly serves the black and lower income communities. This should come as no surprise, because the procedure for starting a new company in Pittsburgh is basically having to convince the Public Utilities Commission (PUC) and existing companies that your new company will not compete with the already comfy cab business. A few years back, I called a spokeswoman from the PUC, who oversees taxi companies for Pittsburgh and surrounding counties. She admitted that lack of cabs were a problem in Pittsburgh, but that they encouraged consumers to "try to use licensed cabs." She also pleaded that whenever the state government has floated the idea of lifting barriers of entry into the market, lobbyists for the cab companies made such an outrcry that it was just never going to happen.

DC, by contrast with Pittsburgh, feels like a dream for transportation (you can actually, no, stay with me here, get a cab — in under ten minutes! — by simply raising your arm!). Still, it has had its problems, namely that Reason TV producers occasionally get arrested when trying to report on potential changes to DC taxi laws. The current fee for a DC cab license is an extremely affordable annual fee of $125. However, as Jim Epstein noted in December, the 60-hour, $375 course to ge a license has been indefinitely suspended since 2009. If DC politicians wanted to "fix" the system in DC, that would be a terrific place to start. 

Progressives who ostensibly care about teeny entrepreneurs and opressed minorities occasionally realize that if they're on the side of the little guy, they should be against cab medallions. But mostly they don't seem to notice that taxi regulations are just another type of restriction that has almost nothing to do with safety or fairness. Indeed they just harm consumers and workers, and reminds us, as in the case of the the TPLA's fear-mongering over Uber, that trade groups and even other business owners tend to have about as much interest in an actual free market as do government bureaucrats. 

Check out Reason TV's awesome piece from last summer on the threatened DC taxi cab restriction that would require NYC-like medallions and would have capped the number of city cab drivers at 4,000, cutting taxi numbers by about a third. 

*[Update] The full press release from the TPLA can be found here, and it's rich with fearful detail about how these apps create "an uneven playing field."