Interesting People mailing list archives
Re There's no future for taxis': New York yellow cab drivers drowning in debt
From: "Dave Farber" <farber () gmail com>
Date: Fri, 20 Oct 2017 15:18:09 -0400
Begin forwarded message:
From: "John Levine" <johnl () iecc com> Date: October 20, 2017 at 3:02:05 PM EDT To: dave () farber net Subject: Re: [IP] There's no future for taxis': New York yellow cab drivers drowning in debt In article <24E0A272-6F4F-4DC6-90E8-F4A64462CD88 () gmail com> you write:'There's no future for taxis': New York yellow cab drivers drowning in debt Ride-hail services like Uber and Lyft have saturated the market, and an exodus of drivers from cabs has made medallion values drop –leaving many owing moneyBy Cecilia Saixue Watt Oct 20 2017 <https://www.theguardian.com/us-news/2017/oct/20/new-york-yellow-cab-taxi-medallion-value-cost>Everything they say is true, and the situation for existing NYC medallion owners is pretty bad, but I don't see the long term situation as being as dire as they say. The number of NYC taxi medallions has been artifically limited since the 1930s, due to pressure from existing medallion owners who took out huge loans to pay for theirs. As a result, while there are plenty of taxis in Manhattan and at the airports, you cannot find one in the outer boroughs, or when you need to get to the airport at 5 PM on a rainy day. A few years ago they added a green stripe medallion which only allows pickups outside Manhattan but it was too little too late. Also, NYC has also distinguished between taxis which you hail on the street and car services which you book ahead. Unlike in most places, Uber in NYC is a legal car service and it is common for a driver to have several phones on his dash to take calls from several car services. Many medallion owners and lessors will go bankrupt and have to sell their medallions to other people at a loss, which is certainly bad for them but will eventually bring the cost of the medallions down so the payments aren't a burden and driving a taxi makes economic sense. The US bankruptcy system is unusual and a UK newspaper may not appreciate how quickly US bankrupts recover and go back into business. Uber continues to lose money on every trip, which Stein's law tells us will eventually have to stop, and their main advantage these days is that you can use the same Uber app to hail rides in many different places. If you mostly ride in a single city, as most people do, there are other apps, e.g., when I'm in London I use Gett which gets me a real taxi with a knowledgable driver and no surge pricing rather than an Uber driver who only knows what his GPS tells him. So I expect that the black car business will even out as well, as prices adjust to meet actual costs. R's, John
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- Re There's no future for taxis': New York yellow cab drivers drowning in debt Dave Farber (Oct 20)
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