NYC Mayor De Blasio Realizes His Plan To Kneecap Uber Was A Disaster, Backs Down

from the so-much-for-that dept

Earlier this week, we noted that NY City mayor Bill de Blasio appeared to pick a fight with Uber that he couldn’t possibly win. The plan was to create a taxi medallion-like system for car hailing apps like Uber and Lyft, but which would cap the number of such cars that could be on the road. The PR campaign against this effort was tremendous (obviously, some of it pushed by Uber and Lyft — but much of it by the happy users and drivers on those platforms). De Blasio and his staff apparently believed that there really wasn’t popular support for these platforms, which was just wrong. As the negative publicity continued to mount, including having various celebrities weigh in on how stupid the plan was, it appears that de Blasio has backed down and agreed to drop the plan, at least for the time being.

The agreement brings a temporary end to a fractious struggle that had consumed City Hall for several days, and inundated parts of the city with mailers, phone calls, advertisements and even celebrity endorsements.

Under the agreement, according to three people familiar with the agreement, the city will conduct a four-month study on the effect of Uber and other for-hire vehicle operators on the city?s traffic and environment.

To save face, the mayor’s office is also claiming that this is a “victory” because Uber agreed to share some data with the mayor’s office about usage of the platform. However, this is pretty clearly a victory for Uber, its drivers and the people who use the service. There are some legitimate questions about how these companies operate and what they mean for the cities and residents where they exist, but this move, from the beginning, was clearly about paying back taxi cab companies who had supported de Blasio’s election, rather than any legitimate concern for the city.

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Companies: lyft, uber

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Comments on “NYC Mayor De Blasio Realizes His Plan To Kneecap Uber Was A Disaster, Backs Down”

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33 Comments
Anonymous Coward says:

Re: Re: comparison of environmental impact

Of course you see them driving, either go to a person who requested their services, or taking that person somewhere, or maybe just the driver going home. What you will not see them doing is driving around looking for a high, because if the app was not used to summons them they will not be paid.

Derek Kerton (profile) says:

Re: Re: comparison of environmental impact

Why on earth would an Uber driver circle around?

Because they want to burn gas, use money, and have to work (drive), when they could be pulled over and resting? No.

Uber drivers would only choose to drive empty to:
– pick up their fare
– go to a hotter area
– go home
– be off duty, running personal errands

Ray Trygstad (profile) says:

Economic model for cab medallions

I think I ask this question every time New York cabs come up. What economic model makes it reasonable for folks to pay in the range of $800,000 to a million dollars for an NYC cab medallion? How long do you have to run a cab under the medallion to recoup that? It looks to me like it would have to be several hundred years.

pixelpusher220 (profile) says:

Re: Re: Economic model for cab medallions

‘Efficient’ means some people don’t get served because they aren’t a profitable customer.

Taxis in a major city are effectively a piece of the transportation infrastructure. In DC, a single company is contracted to serve Dulles airport. Why? Because it isn’t profitable for a lone taxi to sit at the airport at 3am on the off chance someone might need a ride.

It’s an edge case, but when applying infrastructure to a city you need to serve everyone, subsidizing the expensive with the cheap.

If Uber is able to cherry pick only the profitable (efficient) customers the existing Taxis end up with only the unprofitable customers and go out of business. Now what? Do you require Uber to have people standing by at the airport at 3am? Hell is there even anyone on call at 3am? At what price?

These are questions nobody here seems to ever want to answer in the defense of the new and shiny.

tqk (profile) says:

Re: Re: Re: Economic model for cab medallions

These are questions nobody here seems to ever want to answer in the defense of the new and shiny.

Pot, kettle, black. Uber and Lyft are demonstrating how inefficient the existing taxi business is, and how lazy it’s been just sitting on its laurels. 0.75 million bucks for a medallion? Taxis sitting around all over the place, burning fuel, waiting for rush hour?

Now, when your flight’s coming in to land, you can order a ride on your cellphone. Others will too. They’ll be waiting for you all when you get out.

No need to bribe De Blasio to prop up a failing business model that rewards taxi companies, exploits the drivers who can’t afford 0.75 million bucks for a medallion, and encourages rude and abusive behaviour since the drivers are pissed at the situation being way outside their control.

I never take taxis. I do think this situation is long overdue. Hopefully, this’s going to produce fewer bribes for De Blasio too, forcing him to work harder. Maybe he’ll have to go back to caring a little about us instead of his captive sugar daddies he’s been extorting by manipulating our democratic power.

pixelpusher220 (profile) says:

Re: Re: Re:2 Economic model for cab medallions

Never said the current system was great or efficient.

But…

“Now, when your flight’s coming in to land, you can order a ride on your cellphone”

At 3AM? What if no Uber drivers feel like working that shift? Maybe they do, but you can’t just leave it up to chance. Edge cases matter and you still haven’t answered how to handle them except waving your hands saying it will be ok.

The problem of having no taxis available at all hours was solved via regulations and the medallion systems. Just solve that problem with Uber and it’s a non-issue. Problem is nobody seems willing to do so.

Anonymous Coward says:

Re: Re: Re:3 Economic model for cab medallions

“What if no Uber drivers feel like working that shift?”

What if no taxi cab driver feels like working that shift?

“Maybe they do, but you can’t just leave it up to chance.”

I don’t see how this is leaving it up chance anymore than with taxi cab drivers. Taxi cab drivers may also wish not to work those hours.

Leave it up to market forces.

“The problem of having no taxis available at all hours was solved via regulations”

citation proving

A: That there ever was a problem
B: That regulations ‘solved’ it
C: That the current situation is recreating the problem

Because this looks like a bunch of madeup nonsense that came from your imagination.

“Problem is nobody seems willing to do so.”

No, the problem is you’re making things up.

Derek Kerton (profile) says:

Re: Re: Re: Economic model for cab medallions

Except the evidence shows that Ubers are MORE accessible than regular cabs, at ALL hours. Recent studies have looked at how Uber is even better at classic edge cases, like low income neighborhoods.

http://www.motherjones.com/kevin-drum/2015/07/uber-vs-taxis-who-does-better-low-income-neighborhoods

There may be bias in that research, but it is supported by scads of anecdotal evidence from black passengers, who say they can finally get a ride as easily as anyone else.

Also… The CEOs son, a black man, always used Uber cause he could never catch a cab. Your class dont matter when it comes to NYC cabs.— NAP QUEEN (@thecityofjules) July 23, 2015

Anonymous Coward says:

Re: Re: Re:3 Economic model for cab medallions

“So it doesn’t answer the actual question I asked…the edge cases that public infrastructure has to cover.”

No, it does answer the question

“Except the evidence shows that Ubers are MORE accessible than regular cabs”

See, these are the exact edge cases you are talking about. There are many ‘edge’ cases where regular taxicab drivers are not available where Uber is available. This is evidence that you are wrong, that Uber provides ‘more’ coverage during those edge cases than regular cabs. I still await your evidence to the contrary because, so far, you have provided absolutely none.

Anonymous Coward says:

Re: Re: Re:2 Economic model for cab medallions

If he was really interested in the cases that people aren’t covered he would be against artificially limiting supply since doing so necessarily highers prices and results in more cases that people aren’t served. But he isn’t interested in that. He’s interested in limiting competition because he’s a shill.

Anonymous Coward says:

Re: Re: Re: Economic model for cab medallions

“In DC, a single company is contracted to serve Dulles airport. Why? Because it isn’t profitable for a lone taxi to sit at the airport at 3am on the off chance someone might need a ride.”

And many of those contracted taxi cab companies often have difficulty covering certain hours as well. Often times drivers take off and the companies can’t find replacement drivers. It is highly unlikely those that are contracted are going to be able to always provide 24 hour coverage, especially during unprofitable hours that no one wants to work. No, these contracted taxicab companies are for profit businesses and will also likely choose to cover the most profitable hours the most and neglect the least profitable ones just as well. At least in most cases that’s how traditional taxicab companies work. Don’t confuse them with ‘public infrastructure’.

However, a free market (as in Uber) will dictate the prices during times that people are less willing to work so that the price will reflect the fact that people are less willing to work and the customer will just have to pay more to get someone.

JMT says:

Re: Re: Re: Economic model for cab medallions

“In DC, a single company is contracted to serve Dulles airport.”

This is common practice in airports around the world, as it’s a great way for airport companies and taxi companies to gouge passengers with higher prices. Until the likes of Uber came along, passengers had no choice but to suffer these cozy, anti-competitive arrangements.

Derek Kerton (profile) says:

Re: Re: Economic model for cab medallions

Ninja

But the city did not get all the revenue for the medallions. Many are re-sold on secondary markets, and investors and speculators made the capital gain.

I say tough. Lots of capital investments drop in value. That’s kinda the downside of capitalism and investment. I’ve bought shares of companies that went to zero. Why did they go to zero? Well, because other better technologies came along and disrupted their markets.

So it is with Medallions. They are dropping in value because something better came along. Only difference is the gov’t is involved, so those people who invested are crying to gov’t to stop their losses. Tough shit.

What if you owned Blackberry when iPhone came out, or Diamond Rio when the iPod? What if I invested in a travel agency just before the Internet messed up their valuations? What if I bought stock in Garmin or Tom Tom right before Google offered nav for free on Android? Tough crap. Private investors need to tale their losses.

The smartest investors will have sold their medallions a while ago, anticipating the disruption. But somebody loses. Why should they have an unlimited upside, with a guaranteed downside protection from the city?

Teamchaos (profile) says:

Re: Economic model for cab medallions

http://blog.priceonomics.com/post/47636506327/the-tyranny-of-the-taxi-medallions

Drivers pay for the use of the cabs. Working through some of the numbers in the cited article, it look like the cab company gets a return of approx $100K per year (figuring 3 shifts at $100 per shift) in Boston where the medallions cost $625K for about a 16% return on the investment in the medallion.

There is also the value of the medallion as an investment, which has risen over 6000% since 1970 in NYC. In contrast the S&P has risen a bit of 1000% during the same period.

Medallions used to be an excellent investment. Which is what the hubbub is all about. It has nothing to do with safety, traffic congestion, etc. It’s all about the Benjamins.

Joel Coehoorn says:

How to beat Uber

If the mayor really wants to “kneecap” Uber, all he really has to do is multiply the number of medallions by 10, and maybe ease up a few other regulations. A dedicated taxi, maintained as part of a fleet, should easily be able to get vehicle costs well below Uber. The only reason this doesn’t happen now is lack of competition caused by the limited supply of the medallions, and also perhaps union-inflated driver pay.

Anonymous Coward says:

Uber (and others like it, Airbnb, delivery services and others soon to follow) are interesting companies. One of their biggest advantages is that they do not follow current laws. Employees vs. contractors? Insurance laws (think your part time Uber driver has commercial insurance?) and more.

Regulations were put in place for a reason, some to raise money for the government, others for safety and service reasons. Should these new companies be able to step around those regulations?

One fact is that the government will always get its money. If it is cut in one place, the government will get it from somewhere else.

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