Instead of Erecting New Barriers For Ridesharing, Cities Should Deregulate Taxis

That allows for fair competition on a level playing field, and lets consumers choose which service they prefer.


Screenshot of Uber app (Eric Boehm)

Outdated transportation regulations might limit competition from ride-sharing services in places like Philadelphia, but in the long run those same regulations are spelling doom for taxi companies.

Right now, many cities and states are trying to find ways to jam ride-sharing services into old regulatory structures that have been around since the Great Depression. Often, they are doing so at the behest of taxi companies, taxi driver unions and other incumbent interests.

"It gives the established taxi companies almost a veto power over new taxi companies," says Michael Farron, a research fellow at the Mercatus Center. "We're kind of at a point where the old horse-and-buggy whip manufacturers are complaining about the new automobiles, except now it's the taxi drivers complaining about ride-sharing."

Is there a better way for public officials to deal with this conflict between taxis and Uber?

On this week's edition of American Radio Journal, I chat with Farren about how taxi companies could also benefit from broad deregulation in the transportation sector.

By requiring taxi medallions and using other regulatory mechanisms to limit the number of cabs, government agencies like the Philadelphia Parking Authority have protected taxi companies' bottom lines for decades. That's led to a stagnant market with little room for innovation or entrepreneurialism, Farren says. In short, that's why taxi services haven't changed much in decades: there's been no motivation to evolve.

Philadelphia is still trying to freeze out ride-sharing in the name of protecting taxis, but other cities, like Miami, have taken a smarter approach by removing regulatory hurdles for taxi companies rather than trying to erect new ones for ride-sharing. That allows for fair competition on a level playing field, and lets consumers choose which service they prefer.

Listen to my whole conversation with Farren here.

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  1. Deregulate taxis? So let me get this straight, you want passengers to be raped by Uber drivers and cab drivers. Without regulation, what’s to stop a taxi driver from parking a yellow cab packed with explosives outside a government building? OR A PRESCHOOL?

    1. You forgot to mention that many Uber drivers wear scary clown masks and have “Don’t Tread on Me” bumperstickers.

      1. And they are cultural appropriators!

  2. Ride sharing services are stealing jobs from good Americans! They’re probably Mexican immigrants or something! They need to be stopped! The economy must be frozen in place! To protect jobs!

    1. I don’t know about Mexican. Ulubgub was from one of the lesser -stans.

      1. I’ve seen a pretty good mix. The saddest was some guy who was driving to pay for his daughter’s cheerleading stuff. I kept thinking “just tell her no”. But he acted like he didn’t have a choice.

        1. “I kept thinking “just tell her no”

          You monster!

          1. I’m pretty terrible. That why I had him drop me at a beer festival. I drink so I can tolerate myself.

        2. I hate people who act that way. You may not like it, but you made the decision to do it, you decided that this was worth . . . whatever.

          Own that shit.

          1. I felt bad for him. He seemed trapped in his own life. That’s the only thing I don’t like about uber. I feel like I should ride in the front seat because it’s just a regular joe trying to earn some money, and they feel like we should talk since I’m sitting next to them.

            1. Everybody is a just a regular Joe trying to earn some money.

              Give him the same sort of respect and expect the same sort of service you would from a ‘professional’.

              Remember – you’re not giving him charity or pity.

              1. I get that, it is my own issue, but when I get in a cab I always get in the back and when I get in an uber I always sit up front. It’s a Pavlovian thing for me.

                1. Well, by that I mean you can tell him that ‘I’m not really a talker’ or ‘Come on, man. I had a rough night and I hate the fuckin’ Eagles, man!’

            2. He seemed trapped in his own life.

              My brother drives for Uber? Shit, he never told me.

  3. We have a new ride-sharing thing in town, called “steady fare” that’s supposed to be better, faster and cheaper than Uber, and pays drivers more. We shall see.

    1. The only time I’ve had issues with uber is in smaller towns. I had to walk home from the bar Sunday because there were no uber drivers out at 2 am in cocoa. I never have that problem in orlando.

      1. Can’t get from Havana to Tallahassee, or back, either.

        1. Why would you go to Havana. Now that Americans can go there all the “charm” is gone.

          1. I’m sure the capitalists have ruined it by now anyway.

          2. No, no. HAY-vana. A little town most of the way to the GA border north of Tallahassee where my mother-in-law currently resides. Just down from Coon Bottom.

              1. No, I was trying to Uber into Tallahassee and get shit-faced with some old friends.

                1. But I have been to the Coon Bottom Gun Club and its a nice place.

  4. Agree in general but it is not quite so simple as all that. Insurance requirements and verification? For instance, you can decline extra insurance when renting a car because your credit card provides the additional coverage. Not so if you rent a cargo van. So somebody needs to make sure that drivers are insured in a manner that insurance companies will actually pay out if a passenger is injured. Beyond that, yeah I like yellow for taxis.

    1. I don’t understand this ‘somebody must make sure . . . ‘ thing. Why don’t *you* make sure? Check the dude’s insurance paperwork if you think he’s sketchy. Only ride with trusted services – that’s what this whole ‘brand’ thing is about in the first place and why companies go through a lot of trouble (to the point of *buying* someone else’s) to create and protect.

      And its not like Insurance companies won’t pay out just because you had an accident ‘on the clock’ – plenty of people use their vehicles for work. Plenty of people transport others as part of that work – not as a transport service but taking clients to see a house or stuff like that. And they do that every day. There’s no special insurance needed here. Just need to let the insurance company know what you want your policy to cover.

      And, finally, you can always self-insure. if you’re worried that a service provider may damage you and not be able to afford to cover the bills you get your own insurance. If my AC repairman burns my house down its insured – by me. So I don’t have to worry about whether or not he can cover it.

      1. And let’s say that we have a government agency to ‘check the paperwork’ (and, don’t forget, to make up bullshit regulations every time there’s an opportunity – regulators gotta regulate and they’ve got to be seen regulating) and they screw up, or a guy cancels his policy after getting the OK from the agency. What do you get out of that?

        Fuck all because the regulating agency sure as shit will not fork over dime one even if the screwup is completely on their side.

      2. State Farm recently updated their policy to specifically exclude “for hire” services such as Uber.

        They will continue to pay out if you are driving “for work” but not “for hire.”

        I assume the other insurance companies are the same.

        1. If they’re no explicitly *excluding* ‘for hire’ in new policies that means that it wasn’t excluded before.

      3. Sure.. how long do you think it takes to call up on the phone to verify coverage? Asking that the appropriate coverage be in place is not exactly a huge regulatory barrier. My HOA requires home owners to provide annual proof of insurance meeting certain requirements. Most carriers just send an email to the management agent with the verification. Likewise, if a policy is cancelled that notification is sent automatially as well.

        Responding down comment to the State Farm coverage – they probably would have denied and and forced you to fight. Now they are explicitly including that exclusion. Which is appropriate. Why should I, as a casual driver or commuter subsidize your career as an Uber taxi/limo driver?

        This “ride share” stuff is non-sense. You are operating your vehicle in a explicitly commercial manner. Driving for Uber is not a rotating work car pool with Joe and Betty.

  5. Instead of Erecting New Barriers For Ridesharing, Cities Should Deregulate Taxis

    Is there any government spending you libertarians won’t oppose, even infrastructure improvements? Roads, bridges, barriers – it’s all off limits to you guys!

    1. Is there any government spending that you’re opposed to?

      1. I was doing a bit, Hyp. Like “barriers” are actual infrastructure projects.

        1. That was pretty good. It was the barriers thing that convinced me you were an actual prog come to edumencate us anarchists.

    2. If the road needs repaired, why don’t the owners pay to repair it then? The state owns it? Why? Because the state built it. Why did the state build it? Because the *state* wanted a road there.

      If it was privately owned it would either make enough money to cover operating costs or it would be obvious that not enough people use it to make it worth having a road there.

      People like you like to complain that we don’t use mass transit – and you guys *love* you some trains – yet it was your proggie government that built the boondoggle that is the interstate system.

      Think of how much more control you could have if all intercity cargo went by rail and cheap bus service wasn’t available – you either fly or ride the train.

      1. Eh, I should read the comments before commenting?

    3. I brought the tar and feathers. Let’s fuck up J R.

  6. Right now, many cities and states are trying to find ways to jam ride-sharing services into old regulatory structures that have been around since the Great Depression.

    It’s hilarious that proggies insist that we have a “living” Constitution–essentially meaning that the Constitution is just a blank piece of paper upon which any enlightened prog can write anything he wants–but government regulations are immutable and cannot be touched (unless it’s to add more layers of regulation).

    1. It’s ingrained in the general culture now, not just progs. The average American equates unregulated with unsafe.

      1. Well, yeah. Businesses are predatory. They will kill customers and employees alike to make a profit, and the only thing that stops them is government regulation. Everyone knows this.

  7. Instead of Erecting New Barriers For Ridesharing, Cities Should Deregulate Taxis


    The taxi companies DO NOT WANT TO BE DEREGULATED!

    Its like the fight between FedEx and UPS over unionization – UPS wants FedEx to be forced to be unionized like they are. They want that because they figure they have an immediate advantage if that happens (having their business already structured to deal with a union) and don’t want to de-unionize because that leaves FedEx with an advantage.

    Taxis do not want to be deregulated, they want their competitors to be hobbled by the same crap that they’ve already learned how to deal with. When asking for a ‘level playing field, nobody *ever* demands that the restrictions *on them* are removed. Only that those restrictions are applied to the competitor.

    And keep in mind that *taxi drivers* are fucking nobody. They got no say in this. They don’t own the medallion, they simply lease its use. Any one of them who has not already jumped ship to the Uber/Lyft platform deserves exactly what he gets.

    1. Fuck you squirrels, I closed that tag.

      1. If the squirrels were under proper Good Government Regulation that wouldn’t happen!

    2. Exactly. It’s Cronyism 101. How do you deal with a smaller, swifter competitor? By getting government to cut its legs off at the knees so you can bludgeon it to death at your leisure.

  8. The political problem here is that lots of little guys get screwed when their medallions become worthless. That’s the human sympathy angle.

    If it were just “Yellow Cab” losing a billion dollars, no one would care.

    1. Because they bought into a publicly supported monopoly that they were told would never lose money? Sorry, not sorry.

    2. 1. How any medallions are owned by “little guys” compared to players?
      2. Regardless of who owns them, medallions exist to allow their owners to use the power of government to crush their competitors. They were purchased because the owners relied on the government to continue to enforce the monopoly for the owners’ benefit. I have no sympathy.

    3. If the argument is that the existence of this regulation creates a property interest for the owner of the medallion then removing the regulation would be a taking. So the local governments should bite the bullet, recompensse the medallion owners and de-regulate.

      The local taxpayers take a hit, sure – but they’re the ones who elected idiots who thought that managing the number of taxis in a town was a legitimate government duty.

      But then we’d also never be able to repeal a law – think of the property interest employees of the DEA have. Sorry, can’t end drug prohibition because we can’t afford to pay these people to leave. Sorry, we can’t make prostitution legal because there are too many cops expecting free handjobs.

  9. Eh, I should read the comments before commenting?


  10. Instead of Erecting New Barriers For Ridesharing, Cities Should Deregulate Taxis

    Oh you!

  11. Shut up Mimsy!

  12. Some jurisdictions have deregulated taxis already, for instance, Sarasota Florida. I was at the city commission meeting where this happened. One commissioner asked “Why did we ever regulate taxis anyway?” and no one had an answer.…..d-for-uber

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