Taxi Owner Copies Innovative Business Model Of Free Shuttles He Just Forced To Shut Down

from the regulatory-capture dept

Earlier this year, we wrote about how some of the taxi companies in Tampa, Florida were upset about free competition. Some smart business folks had setup local transportation options, that subsisted on advertising and tips, rather than fares, and thus were able to avoid having to buy a (sold out) taxi cab license. But, of course, the existing cabbies freaked out and complained, and convinced the city council to declare that the free cabs had to buy licenses as well… while conveniently noting that none are available. Basically, the cab drivers got the city council to drive this competition out of town.

But, now there’s a bit of a twist. A bunch of folks have sent in the news that one of the guys who pushed the city council the hardest has now suddenly set up his own free shuttle offering in place of the competition that was run out of town. He makes no qualms about the fact that he’s copying the idea of the shuttles he just knocked out of business, saying they had a good idea — he just didn’t like the fact that they didn’t have to buy a taxi license. Neat trick, huh? Get the government to drive your competitors out of town, and then copy their best ideas.

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Comments on “Taxi Owner Copies Innovative Business Model Of Free Shuttles He Just Forced To Shut Down”

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Anonymous Coward says:

Re: Re: Re: Sounds like...

Patents should protect the first guy but they hardly ever protect the innovators. Instead, the law usually protects the status quo be it by patents or otherwise.

Another example of this is e – cigarettes.

The innovator of the product ends up getting his product banned by various FDA’s and the U.S. allows a local company that did not come up with the invention to make it while banning the competition that invented it under health and safety pretexts but that’s all just lies.

Patents have done almost nothing for innovators, they hardly ever do. They’re used by rich and powerful corporations to exploit people.

Overcast (profile) says:

Re: Re: Re: Sounds like...

Not quite. The first guy “invented” the free service. The second guy legally eliminated the first guy, and then “stole” his invention, which was also perfectly legal since the first guy had no protection for his implementation. Now, extrapolate to patents…

Well – for one, the battle may not be over – and two – patent or no, I would never use this copycat ‘free’ service just on principle after knowing this. Patents aren’t everything – but to business ‘reputation’ is.

Derek Kerton (profile) says:

Re: Re: Re: Sounds like...

Sorry. Comprehension Fail on your part. If you want to extrapolate to patents:

The first bunch of drivers “invented” taxi service in Tampa, got medallions for their cars. Now they are the ONLY ones that are allowed to perform livery service in Tampa, because they have these medallions. These are the equivalent of patents, because they exclude any subequent innovators from the market…as they did in this case.

The taxi cabal then simply abuse the monopoly power they have, reduce supply, and use the government to squash their competition. They also adopted some of the best practices of the innovator.

You’re saying, “If only there had been some kind of protection for the innovator, things would be better.” But make no mistake, there WAS patent-like protection in this story. The original ‘innovator’ was the Taxi cabal. And a gov’t-granted artificial monopoly allowed them to screw the new innovator.

Ryan says:

And the 100 millionth example of how mandatory licenses and regulations are primarily tools for the government and incumbent businesses to slow innovation, stifle competition, and maintain control. People think they make them safer(the massive perpetuation of myths that “under-regulation” caused the housing bubble/toxic assets mess was sickening), but they don’t.

Derek Kerton (profile) says:

Re: Oversimplification!

You don’t think banking needs a little more regulation than the taxi market?

Banks can “create money” through multipliers and loaning it out. When they fail, they have confidence repercussions that ripple through the economy. Regulations are required to limit the amount of money they can lend out, based on the assets they hold to assure us that they remain solvent. Especially since the risk of failure is (so clearly) socialized.

An economy, and the value of a dollar, is a church of faith. FIAT money needs regulations to maintain that faith. Taxi service in a city, less so.

Disagreeing with you is starting to feel like a habit.

Anonymous Coward says:

Re: Re: Oversimplification!

It has nothing to do with safety, taxi cab drives already have drivers licenses just like everyone else. We know the laws of the road and what we can and can’t do to keep everything working smoothly and safely. I can pick up a friend with my car and that’s fine because I have a drivers license. What’s the difference between if I pick up someone or someone else does it. If anything it encourages carpooling. Otherwise it should be illegal for anyone to pick anyone else up.

Alan Gerow (profile) says:

Re: you know...

Yeah, that first guy who had the idea and started doing it then had his life ruined when the government stepped in to enforce arbitrary licensing requirements … that’s not a big deal at all, screw him, everyone else is still getting free cab rides. o_O

The people get free cabs in the end, which is good, but the government ruining more lives, not so good.

PrometheeFeu (profile) says:

Re: you know...

Except for the fact that there used to be a lot more of that free service provided.
This story is sickening. Most protectionism we hear about here is about inventors, creators and innovators trying to prevent others from using their ideas. Now, I’m opposed to IP, but at least I can understand the human desire to benefit from what you worked at. It can be tough to invent something and not make anything off it because you didn’t have a good business model to go along. But here, this is just plain theft. What’s the difference between theft and IP infringement? When someone infringes your IP, you still get to keep the ideas and use them. Here, someone invented something good and useful, and someone else, came along, and took it away from them. This is a morality tale. The asshole always wins.

Anonymous Coward says:

Re: Re: you know...

and this is exactly my point. My point is that the rich and the powerful are often rich and powerful not because they are somehow smarter and more innovative than the rest of the population, it’s not because they are somehow more hard working than the rest of the population, but it’s often because they are more willing to act unethically than the rest of the population. On an individual scale ethics is an obstacle to prosperity, it artificially limits your actions making it more difficult for you to succeed and puts artificial limits on how much one can succeed. But there is nothing wrong with that because if everyone is unethical then as a society we are worse off than if everyone acts ethically. But the problem is that if some people are unethical and most people act ethically the people who are unethical are better off and they get rich and powerful at everyone elses expense. The difference between being rich and being poor is often that the rich simply have lower ethical standards than the poor so they are less restricted in terms of what they can do to acquire wealth.

Valkor says:

"sold out" cab licenses

The issue here isn’t business model protectionism, it’s an artificially scarce good. This cab company that is using the different business model is simply taking advantage of the fact that he already has access to the “scarce” good of cab licenses.
Most of the companies are being protectionistic, the adaptive company is being opprotunistic, and the little guy is getting screwed by the city council.

Anonymous Coward says:

It comes back to the same thing every time:

If you have a business model where you don’t have to conform to the rules, you don’t have the expenses of existing services, and you aren’t subject to any regulations, then yes, you can operate at a lower cost than the existing companies.

However, if the “green hop” units were subjected to normal taxi laws they would be out of business. Just like running a business that gives away someone elses IP without charge, this is just trying to operate without paying attention to the rules.

I suspect if the Tampa council worked out it, they could come up with regulations for this type of service, but the costs of being “legal” would likely run them all out of business in the end. I would also say that the council would still be forced to issue permits and limit the numbers just to keep the situation from getting out of hand, and so they could assure that the services are safe, secure, properly insured, and that the drivers have the appropriate permits to be transporting “paying” passengers.

In the end, the existing taxi services are probably in the best position to offer this sort of service, where they can also make sure that they aren’t competing against themselves for no reason.

Alan Gerow (profile) says:

Re: Re:

Except the licensing and regulations aren’t instituted for safety reasons. They’re usually backed by companies in that industry for the primary reason to raise the cost of entry for competitors.

Licensing & regulations do nothing for safety, because keeping your customers safe & happy to return does more for companies than government regulations. Licensing & regulations are mainly used by companies to prevent new players from entering the market and essentially freeze an industry from disruptive players.

In the end, this means less innovation, less invention, less progress, and higher costs to consumers. Licensing & regulations hinder progress at the expense of padding the pockets of those who were in business before the licensing & regulations were enforced on an industry.

There’s no reason a cab needs a special license other than for the already established cab companies to prevent new competition and keep prices artificially inflated. This example proves that:

A new player attempted to disrupt an existing market. The existing players leveraged licensing laws to force the new company out of business. Now, one of the existing companies took the disruptive business model after it was shown to be plausible, but it took someone trying that WASN’T one of the established players to even try. Free cab rides could have been done it years ago, and if this person didn’t try and ultimately had his life ruined by the government, then the market never would have evolved on its own. It was stagnant. If that guy played by the rules, there would be no free cab rides for anyone ever.

Enrico Suarve says:

Re: Re: Re:

“Licensing & regulations do nothing for safety, because keeping your customers safe & happy to return does more for companies than government regulations”

Exactly how much repeat business do you think the average stand based driver relies on? If he takes your money and kicks you out in the middle of nowhere what are you going to do?

It’s a good job that this site and many others aren’t full of truly awful examples of various companies attitude to customers and their safety otherwise your comment would be laughable…

Bring back the zinc in my toothpaste I say…

Anonymous Coward says:

Re: Re:

The taxi cab lobbies who were lobbying against the competition do not care about safety and order, they were not lobbying that the competition be outlawed because they care about what’s best for society, they were doing it because they care about their own profit margins. It has nothing to do with safety and order or anything like that and it has everything to do with politics.

Killer_Tofu (profile) says:

Re: Re:

AC you are one of the biggest idiots to frequent here. The only other person to keep arguing such baseless arguments was weird harold. Even angry dude makes more sense than you.

However, if the “green hop” units were subjected to normal taxi laws they would be out of business
The ONLY rule they weren’t following was the stupid city issued license. Other than that they were a taxi, and making a profit.
In short, you’re an idiot and can’t understand anything. You argue just to argue against anything Mike says, no matter what it is. AKA Troll.

CastorTroy-Libertarian says:

Re: Re:

Wow do you need the government to get you a blanky too…
FFS a guy innovated, got successful, so of course you need to regulate it, i mean we can have “little” guys getting uppity and thinking for themselves…the city council and the taxi guys should be pounded into the sand for doing this, what do you need to regulate on a taxi, charge too much? out of business, charge to little, out of busines, unsafe? people get hurt because of YOUR choice to be unsafe and guess what your out of business THE MARKET AND THE PEOPLE WILL DECIDE..

regulation breeds oppressive restrictions to freedom and created this “entitlement” craze… People have to be responsible, they have to choose, not have the choice made for them…

Ronald J Riley (profile) says:

Morally Reprehensible

“He makes no qualms about the fact that he’s copying the idea of the shuttles he just knocked out of business, saying they had a good idea — he just didn’t like the fact that they didn’t have to buy a taxi license. Neat trick, huh? Get the government to drive your competitors out of town, and then copy their best ideas.”

This is the essence of the fight between inventors and what Mike likes to call innovators. Of coarse, the word innovator is being misused and the meaning twisted.

This kind of dirty dealing is not acceptable. It does not matter if it is done in transportation or the invention business. It is still morally reprehensible.

Ronald J. Riley,

I am speaking only on my own behalf.
President – – RJR act
Executive Director – – RJR at
Senior Fellow –
President – Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 – 9 am to 8 pm EST.

dorp says:

Re: Morally Reprehensible


Next time you comment with your shilling and obnoxious signature, how about you read the article?

Here is a list of your failures:

1. You provided no explanation for what you understand as “innovation.” Mike uses well defined description. You use none.

2. You do not explain this “nature” of the fight.

3. You are failing to see that an artificial monopoly is what is being used here to get rid of competition. Yet, you imply that some other type of artificial monopoly would solve this problem.

4. Your empty attacks are also reprehensible, may be we should limit your right to printing 362 characters a day as part of your right to “invent.” That’s the length of your ridiculous signature, by the way.

Derek Kerton (profile) says:

Re: Re: Morally Reprehensible

Maybe if we all get some kind of gov’t sanctioned artificial monopoly, then we’ll each make more money, and society will be better off. If we lock everything up, then there will be more of everything later on, right? The feds should start allocating these monopolies to each citizen ASAP.

Signed, the capitalist free-marketers from opposite world.

Shane says:

Free Market...Of Course

A story like this is the exact reason you just can’t trust the “free market” for profit folks that will appeal to many aspirational people with the idea of getting the rules out of the way so they can do business. But at the same time these are the same folks that need rules to be created in their favor to protect their out of touch ideas. If you want to compete then compete and stop this stupid astroturfing to make the public thing you are just a working man, while you screw your competition…not with good ideas but ones that stall the entire economy/culture.

nasch (profile) says:

Re: Free Market...Of Course

A story like this is the exact reason you just can’t trust the “free market” for profit folks that will appeal to many aspirational people with the idea of getting the rules out of the way so they can do business.

If the free market had been allowed to operate, and the rules gotten out of the way, this never could have happened.

Derek Kerton (profile) says:

Re: Re: Free Market...Of Course

That’s Shane’s point. Most self-anointed free-market champions are, in fact, not pro free market.

They are generally existing players who don’t want the rules changed. They like the rules that hold them in a good position, but reject any change in rules, any new rules that would bring change, and innovation in general. They think along these lines: “Any rules that existed when I entered the biz are ‘god given’ and are just the way things should be. Any rules that come after are anti-free market, socialist, and/or fascist.”

Anonymous Coward says:

Re: Free Market...Of Course

A story like this is the exact reason you just can’t trust the “free market”

This is exactly opposite of the free market! A free market wouldn’t have the arbitrary limit on the number of licenses available. This is simply ugly rent-seeking, where the existing taxi-drivers use the limited licenses to avoid any competition to their businesses.

Derek Kerton (profile) says:

Re: Re: Free Market...Of Course

That’s Shane’s point. What most call the “free market” seldom is.

Telcos, for instance, often talk about supporting the free market, and back such initiatives as “Hands Off The Internet”. Yet they fail to mention…or maybe even to notice…that their companies were built on free land, government subsidies, local monopolies (franchise rights), Universal service subsidies, and any number of other NON free market mechanisms.

Most self-anointed free-market champions are, in fact, not pro free market. These players conflate “free market” with “status quo”, and often end up arguing points that are actually in opposition to free markets. Patent supporters in this site’s comments sometimes make this mistake.

Anonymous Coward says:

“Huh…sounds like someone complaining about patents, getting them eliminated, and then copying the inventions in them.”

I think you meant to say …

“Huh…sounds like someone patenting an “idea”, not setting up a business, waiting until someone else takes the initiative and risk of starting up the company to produce whatever the idea is about (product, apparatus etc) and then the first person taking the second person to court to shut them down once their company is going really well and then setting up their own business now that they know the idea is good and wanted in the market.”

Griff (profile) says:

Taxi licenses are a good thing

When a city has too many cabs, none of them can make a decent living.
When the only cabs are the fixed number of licensed cabs, the authorities can afford to ensure they are all safe.

The problem is often the process by which they are acquired, and how the city decides how many.
(guideline – if licenses change hands for > 10 years wages they are probably too few)

If a license was reviewed every few years and could be taken away for non use or abuse, it might be better. Taxi license holders do seem to have undue power. In Cambridge they managed to block a perfectly good city centre tourist sightseeing cycle rickshaw business, forcing them to have CRB checks taking 6 weeks for their riders (casual seasonal labour who can’t wait that long to land the summer gig) and requiring them to have “the knowledge” of every street in the entire city although they rarely left the historic centre. When the railway station was redeveloped with a new taxi rank and tried to charge cabs a fee for using the rank the cabbies forced a climbdown.

But if you accept the existence of a license system, it should be a license for carrying passengers for commercial benefit and should make no distinction between free and charging business models. It was therefore irrational that the original free shuttles should not require a license.

Anyway, this guy running the free licensed cab is probaly v busy while he is the only one offering it. If they all try it they won’t all be busy for long.
Sounds to me like he’s a shrewd guy.
If he has proved free works even with the cost of a license factored in, then the original shuttles should have tried to buy someone’s license.

Bryan (user link) says:


You may want to mark your calendar for 9am on June 9 – the next Public Transportation Commission meeting. We just found out that Yellow Cab won their lawsuit, which determined that advertising and tips can be considered as compensation.

We are not sure what is going to happen next, but wanted to give you a heads up. Please keep in touch so we are all on the same page. We’ll do the same.

Here’s an article about golf carts on Davis Islands:

This may confuse the issue a bit.

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