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Comment by seizethecheese | Hacker News Reader

Earnings for Uber Driver = (timeDriving - timeLookingForFares) * payRate

Earnings for Cab Driver = (timeDriving - timeLookingForFares) * payRate

As a taxi driver, timeLookingForFares is heavily dependent on the amount of people hailing cabs per block driven. As an Uber driver, since you are routed to fares automatically the timeLookingForFares variable is dependent on both how far away other cabs are and the density of riders.

Clearly cabs should clump in higher density areas.

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I talked to an Uber driver who said he previously drove a cab for 15 years (in NYC). His biggest complaint was the medallion rental fee, it comes out to over $100 per day (around $150 at peak I think?), even when you're sick or you want to take a vacation. You just can't, you can't afford it.

He shared a cab with a rented medallion with a friend, they would each do a shift each day. One week there was some serious engine trouble, and the cab was in the shop for a week, neither of them could drive it. He called the medallion owner to ask for leniency, and was told that if he wanted, the medallion would be removed and he would be out of a job. Otherwise he can continue paying over $100 per day.

Apparently the accounting with uber doesn't penalize you to the same degree when you need to take a day off, even with car payments and such for maintaining a nicer car.

This isn't true in the usual case, they don't usually pay unless they drive except in the weekly case (and are paying lower per day cost). Most companies charge about $125/day or $500ish/week. If they do the day rate, they get paid the same day for CC transactions (unlike cities like SF which take comparatively forever). Yes, this is still seemingly high cost, but when you consider the medallions cost $600k (which is down from the million plus pre Uber) and the fact that drivers don't own the car and also don't pay wear and tear on it, it's not so crazy.

I take Ubers and cabs every day and usually talk to the drivers about their experience if they are friendly. Both systems have their ups and downs and I can assure you neither has the interests of the driver in mind. It's simply up to the driver to decide which of the two evils hurts them less.

Why is it not so crazy to pay $600K for an item of no value, simply to be allowed to provide a service?

It is not a credential, so it can't be compared to the cost of a degree or similar in other fields.

It is not and has never been awarded based on merit. The first were given to those who happened to be taxi drivers/owners at a time when taxi service providers when the same convinced the municipal government to limit their competition.

It costs money because it's a durable capital expense that generates revenue, and can later be sold for as much or more than you initially paid.

Now as to why have medallions - taxis cause congestion, and a lot of it. You drive your privately owned car to work and park it, a taxi keeps circling the block all day and pulls to the curb to pick up fares. A single taxi causes as much congestion as 40 private cars [1] - and New York is notorious for gridlock already. You gotta limit congestion somehow, and it makes sense to limit the most congestion-causing vehicles first. And when you're talking about a limited revenue-generating asset then the price spirals upwards.

I personally think medallions should be auctioned on a yearly basis or something, to minimize the financialization.

[1] http://blogs.reuters.com/great-debate/2012/01/20/more-taxis-...

It is not a capital expense in the same way that a vehicle is. It is physically impossible to offer taxi service without a vehicle. It is merely illegal to offer certain types of taxi services in some areas without a medallion. I am asking why a medallion is reasonable in the first place, a question we wouldn't have to address regarding a vehicle.

As to congestion, that is a post hoc justification of medallions that were intensely lobbied for by taxi companies as an anti-competitive measure.

Would you say that pollution allocations (eg SO2 or CO2 credits) are also not a capital asset? I mean sure, you can buy them and sell them or take out an option against their future value. But you could just break the law and pollute without one perfectly fine.

I fundamentally disagree with that assertion. Legal compliance is just as valid a consideration as physical necessity. Just because you can dump toxic waste in the river doesn't mean that should be the baseline behavior. Congestion is basically a form of pollution - pollution of our traffic system.

The existence of taxi medallions is no more or less valid than the existence of liquor licenses. Societies regulate things that they deem to have negative externalities, film at 11. It doesn't matter that they have roots that you dislike (eg prohibitionism), what matters is the role we assign them in the present time.

Even if the need for limiting a service is true, why auctioned? Just give them for free in a lottery, and tie them to the recipient so they can't be sold or exchanged. If the recipient doesn't want it anymore the medallion reverts to the Authority and a new lottery is called to re-assign it. This is done for example with public housing in a lot of places.

At the end of the day they are a scarce, highly demanded, revenue generating asset and as long as people are renting them, someone will price them appropriately (i.e. whatever the market will bear). It should be the city capturing that revenue instead of Mario's Medallion Rentals [1]. There are externalities to having a bunch of taxis clogging up traffic - $500 million per year in wasted time alone. The city is the one who spends to improve mobility.

At the end of the day taxi service is a business. Nobody goes homeless because of the scarcity of medallions for roaming taxicabs. Driving for a dispatch service or doing other work - yes, homeless - no. If you're suggesting that we do it as a subsidized public-works jobs program, I can think of much more deserving projects than driving a taxi. I'd rather have them driving subway trains instead, for starters.

[1] Note: the current system does not capture revenue for the city very effectively, but it should.

Doesn't Uber solve the wandering empty cab problem? Uber cars don't need to drive around to find fares.

I'd say it's some better, but not all better. The problem isn't just the finding fares part, it's the fact that they are on the roads all day. When you drive a private car to work you spend 8 hours parked, and the car is off the roads. Commercial vehicles like Uber drivers will do back-to-back runs for hours.

It's better than inching around the block all day though. And to their credit they are all driving using GPS guidance. That probably does help throughput somewhat vs Mark 1 Intuition by routing you away from congested routes, avoiding hesitation and missed turns, etc.

> can later be sold for as much or more than you initially paid

If the price is down by over 40% since pre-Über, that's questionable.

Past performance does not guarantee future returns and all that.

That's good in my book, I'm not a fan of the way they've been financialized. I'd rather see them auctioned off on a yearly basis to avoid institutional investors running the price up. So a big drop in medallion value is just fine with me.

I never said it wasn't crazy for the medallions to cost as much as they do. I just said it's not crazy that the person who was wise/foolish enough to pay that shouldn't be allowed to try to recoup the cost from someone using it.

It seems I brought some of my priors into this discussion.

Apologies for the misrepresentation of your position.

Serious question: are there no taxi apps in the US? You would think cabs would also be routed to the next customer automatically?

There are. But, they are inherently limited. Via fixed supply and fixed pricing.

Exactly what is Limited by supply and price? Surely not the app? Perhaps the dispatcher charges a fee for access to the API?

The cabs themselves. There are a limited number of licensed cabs, and prices are preset.

I don't see how that would negate the convenience of an app.

You need a variable supply to accomodate for varying demand. Uber would not be able to deliver 10min and under pickups if their supply was limited.

I'm not sure what stops EasyTaxi from working in the U.S. I use it in South/Central America and it routes regular taxis, you pay in cash like usual but get the convenience of the Uber experience of knowing a cab is on the way, and who the driver is.

http://www.easytaxi.com/cities/

At a guess, it's because it's a Rocket Internet company and the group generally does not like operating in the US for a variety of reasons (chief amongst which is that their business model is to execute ideas in emerging markets, not developed countries).

NYC is a special case - yellow cabs are not allowed to be prebooked in any way, shape or form. Street hails only.

(they're piloting an e-hail scheme, but it's far from done)

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