Around the world, the government-charted monopolies and cartels that run the taxi business responded with protests and violence to the emergence of technology-empowered competitors such as Uber, which does not undercut traditional taxis on cost — in New York, its drivers earn about three times what a traditional cabbie makes — but is much more convenient for those who do not live or work in areas that are generally well-served by traditional taxis. As in most cities, New York law imposes price uniformity on taxis and long protected them from most competition, with the entirely predictable result that consumers are the worst-served parties in the taxi business. (It does not help matters that, unlike their London counterparts, famously steeped in “the Knowledge,” the typical New York cabbie cannot find the Brooklyn Bridge without GPS or turn-by-turn instructions from the passenger.) The lack of consumer focus has some perverse consequences here in New York: The taxi fleet schedules its shift change from 4 p.m. to 5 p.m., meaning that taxis all but vanish from the streets during the hours when they are most needed. The New York Times calls this an “apparent violation of the laws of supply and demand,” which, New York Times geniuses, is exactly what happens when you use regulation to take supply and demand effectively out of the equation. A platform that combined Uber’s on-demand service with Google-style driverless cars would probably put the traditional taxi out of business — assuming that the cartels are not able to use government to strangle innovation in its cradle.
Kevin D. Williamson, “Race On, for Driverless Cars: On the beauty of putting the consumer in the driver’s seat”, National Review, 2014-06-01.
January 23, 2015
QotD: Taxicab cartels
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