Cab Drivers Angry About Having To Compete With Free As Well

from the it's-called-competition dept

There’s just something about having to compete with “free” that gets people really, really angry. It’s silly of course. In traditional competition, if someone lowers their price and it’s lower than your own costs, you simply have to figure out other ways to compete (such as by adding more benefits and value). It’s the same thing when you compete with free — but for some reason, people see that big $0 and they stop thinking, not realizing it’s no different if someone is charging $0 or if they’re just charging less than you. You need to figure out some way to compete. EEJ points us to a story from a couple months back, noting that in Tampa, Florida, some entrepreneurially minded folks have started up free transportation services using electric vehicles. The operators of these vehicles make their money by wrapping the cars in ads and accepting tips. Other than that, the ride is free.

But… wouldn’t you know it? Local cabbies are pissed off and demanding regulations to stop this sort of competition. Rather than coming up with better ways to compete, they feel the need to run to the government and get protectionist help. Doesn’t this sound familiar? Amusingly, it’s actually taxi regulations that have created some of this problem in the first place. At least one of the electric car owners notes that he approached the city about getting a license, but he was denied, because of the artificial scarcity the city places on cabs via such regulations (which help keep the cost of a cab ride artificially high). But… the loophole is that the regulations only apply to hired transportation. If the transportation itself is “free” then there are no regulations.

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Comments on “Cab Drivers Angry About Having To Compete With Free As Well”

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42 Comments
Ryan says:

Re: Re:

That’s the entire point of innovation and capitalism–entrepreneurs constantly attempt new business ventures to gain market share and earn profit, to the benefit of consumers who get a better service. If they fail, then others can study the attempt and come back with something better. How can you possibly be critical of a venture in which entrepreneurs take on risk themselves by providing a better service, whether it lasts or not? You will certainly never be a success in life with that attitude, unless it is given to you.

On another note, this is instance #34,076,914 in the last year that I have read why most regulations are idiotic, anti-business, anti-consumer, and anti-taxpayer, yet I continue to read so much opinion that the fix to seemingly everything is “more regulations”…are people just stupid or what?

Someantimalwareguy says:

Re: Re:

Interesting…but the next question would be: “How would this affect TAX revenues?”. The scarcity of the cabs ensures higher fees, which in turn, guarantee higher revenues for the local government.

If you can solve the TAX issue for the government here, my take is that the cities would be linning up to get on the “free electric taxi” bandwagon so fast you would need to call in the Time Warp guys to record it…

JMHO
Mike

Freedom says:

What a great concept...

I had no idea that cabs numbers where artificially controlled to keep prices up. These free cabs are a great innovative idea. It may fail and it may hurt existing business, but what new idea in business doesn’t ALWAYS do that. I constantly lose business to some new idea/provider that comes in – some succeed, most fail but in all cases I adjust to make money where we excel and roll with the punches. Why should cab drivers be any different than any other business.

If an idea like this flies, it could literally replace a good portion of public transportation and have it be financed in an ad supported way which is a game changer.

It is hard to believe this is America. Sounds to me like we are a bunch of protectionist whiners. Then again, I heard something about change. Awesome, change from a sound independent rugged society with a heavy dose of freedom to one that is losing freedoms every day, becoming totally dependent on the government, and with an ever increasing amount of entitlement thinking – yeah America!

Freedom

Anonymous Coward says:

Since they are being used as cabs (even though free) or public transport (like a free bus), they should be subject to all sorts of interesting rules. Certification, driver license requirements, tags, etc. I think this one is pretty much doomed from the get-go, looking good only because nobody has decides what class to dump them into. Once they get classified, the costs will go through the roof.

Steve says:

Re: Re:

No shit. If you don’t watch where they’re going like a hawk, they’ll do their level best to run that meter up. As soon as you ge3t on the phone or something, all of a sudden you turning down some side street that’s bumper to bumper with construction or some such thing. Fuck cab drivers. Compete or go home.

Chris says:

i live in tampa and these rides are not everywhere. They are in a very small portion of town and are more in areas that you will need a quick 5 minute hop or at most 10. The cab companies still get enough business elsewhere and the only place i see them really affected is the weekend night hotsposts. I recently got a dui and have been a cab user pretty regularly since then. they are more widespread and faster than the small electric cars. This is simply an example of the cab companies not willing to change thier opperating style to encourage thier use over the electrics in areas where the electrics are present. I have taken a few electric rides and the drivers are polite and courteous and the ride is generally more pleasing than a cab. take those drivers and give them a cab company and that company would probably have no problem competing with the electrics.

Rekrul says:

I remember reading a story several years ago about a woman who decided to make a little extra cash by baking small things like muffins and such, then selling them around her neighborhood from a cart. Naturally the cops stopped her and told her that what she was doing was illegal if she didn’t have a license. She looked into getting a license and the various fees she would have had to pay were so high that there was no way she could make a profit. Besides the business license, she would have had to have her kitchen certified by the health inspector, upgrade the kitchen to commercial standards, etc.

So she went ahead, baked another batch and headed out with her cart. When the cops showed up again and tried to stop her, she explained that she was giving the baked good away, not selling them. The cops said that was ok…

America, land of opportunity.*

*For those who can afford it…

hegemon13 says:

Re: Re:

There are very good reasons for health regulations, and it is not to create artificial scarcity. After all, you don’t see any shortage of restaurants around, do you? Restaurants cut corners whenever possible to save overhead and food costs. Without health regulations, I shudder to think what we would be eating. The regulations keep restaurants “honest,” and shut down those who threaten the health of their patrons.

It is very possible to make money by selling baked goods. This woman just was not willing to make the necessary commitment. She was a hobby baker, and she cannot possibly have expected to make much money that way. The opportunity is there, she just chose not to take it. The opportunity she had was just a hobby, nothing more.

Ryan says:

Re: Re: Re:

Who are you to tell her what she can do or how good an opportunity she has? It’s not an ‘opportunity’ if you don’t give it to her. Let her customers decide whether they trust her health precautions. How does it make sense to prevent her from selling at cost, but not to give them away? She’d surely get as many or more people eating her food in the second instance, it just wouldn’t be sustainable unless she wanted to take a loss.

Also, like I said above, there’s no reason why we need government regulations; optional private regulations would work just fine.

Eldakka (profile) says:

Re: Re:

the article addressed this:

At least one of the electric car owners notes that he approached the city about getting a license, but he was denied … the loophole is that the regulations only apply to hired transportation. If the transportation itself is “free” then there are no regulations.

i.e. you don’t need a taxicab license.

Online Sports Betting (profile) says:

I agree with Coward

The free model will need to evolve into something different or will die out. Either electricity and maintenance costs will be higher than tips from passengers and advertising dollars or cabbies will bully them out.

If you just put a sticker on a bumper for advertising – there is no way to measure its impact, and in these hard economic times unless you prove that those ads are working – the ad dollars will dry up fast. One way would be to do more proactive advertising by selling in these free vehicles advertisers products – that could be selling tickets to the shows, exhibitions, etc..

Rosedale (profile) says:

What about walking is the competition as well :-)

The other day I was stuck about 3 miles from my place in Boston just after the public transit closed down (Don’t know why they do in Boston, but 12:30 is last call how ridiculous is that?). Anyway it was late, 1:00AM and 3 or 4 miles is plenty of distance to go. Needless to say that this is a huge time for cabs. They rake in tons of money from stranded movie watchers or drunk people. I didn’t bite. I would rather walk, for free, than ride in a cab. Fortunately I ran into a late going bus, the very last one, and made it home. But hey by their logic they should have sued me. After all since I am an able bodied person I competed against them with free with my own two feet (how dare my feet do that). Maybe they should have people come by and whack people in the knees to get their business back 😉

No says:

F the cab drivers

If driving a cab wasn’t profitable no one would do it.
They need to do this in NYC. They should put monitors that play commercials – CAPTIVE AUDIENCE!
In many elevators they have monitors that show news items surrounded by advertising (and sometimes full commercials) and they make money.
NYC gov makes money by charging a lot for taxi medallions (hundreds of thousands) because they know cabs make a lot of money. I know someone who quit an office job to drive a cab because he made so much.
FREE transportation should be an option.

Sean says:

Cab Drivers

That’s it! I’m going to start CashCart and make this idea popular again! Citizens will fully support this as long as they have the opportunity to answer some easy questions on their way to a bar where they will then have plenty of fresh cash to trashed at the local pub.

At this point, the Tampa, FL government has made sure that these “Free Cabs” do not have a license to conduct business. Someone now needs to sue the local government to bring these carts back to us as free market capitalists who are losing out to lazy socialists/Obama democrats who want nothing more to control your healthcare.

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