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Comment by refurb | Hacker News Reader

During the Depression, thousands of jobless men became taxi drivers. As a result, the number of cabs ballooned, and suddenly there weren’t enough passengers to scoop up. The industry became as hopelessly unprofitable as any other.

Is that really true? If so, what makes the cab business so different than every other business where limits aren't put on the number of sellers?

If there were too many cabs and it became unprofitable, then you'd expect the supply to dwindle until it was profitable for some.

The whole safety thing is a different regulatory issue. I could understand trying to keep passengers safe.

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Absent regulation, the cab business has very low barriers to entry. Other direct sales businesses with low barriers to entry such as street peddling, door-to-door sales, food trucks, etc. are also typically regulated or banned. Sales businesses which require renting/owning retail space have a much stiffer entry barrier and inherent limits on crowding, but many types of them are still regulated in various ways (liquor licenses, restaurant licenses, salon licenses ...).

Or in other words, cabs aren’t unique.

Cabs are a vital part of NYC transportation. Too many cabs will clog up streets causing traffic.

There are other reasons to regulate. To prevent predatory pricing. Without set prices cab drivers would start ripping people off. You can see the trouble with this with Uber's surge pricing. I needed a cab home from the airport but Uber wanted 4X pricing. Luckly cabs still exist, but in 5 years they might not. My 80 buck fare would be 320 bucks.

A lot of pro uber folks want to pretend that taxi regulations are purely protectionist. But it's really just quid pro quo. You can't tell cab drivers what to charge and make them drive people to anywhere in the city. They might not be profitable. Limiting supply is consultation price.

Well now that deal is done since cities allow Uber to compete with them unregulated.

I think the only real solution is to deregulate cabs. But a lot of people are going to be pissed when their cabbie informs them of surge pricing or that he doesn't deliver to certain areas.

I see your point but Uber is unregulated and it seems to be working fine. I'm not sure that cabs stick out as an industry that particularly needs this level of regulation.

Uber is actually highly regulated in NYC. When you get an uber, the car that's being driven is a licensed livery cab with the city, and the driver is a licensed livery cab driver with the city. They're subject to all of the regulations that the other livery cab companies have to follow.

> I see your point but Uber is unregulated and it seems to be working fine.

They violate transportation laws flagrantly in most jurisdictions. That's not "unregulated", that's breaking the law.

Under normal circumstances, maybe. The Depression, though… there’s no jobs, so why not just get in your car and hope to get a lucky fare? You’ll make more cash than sitting in an unemployment line.

Well, good luck burning gas and filling up your tank during the Great Depression.

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