Hacker News Reader

Comment by dyyni | Hacker News Reader

Taxis aren’t that expensive in Finland compared to other Nordic countries or countries with similar living costs as Finland.

Swedish taxis are unregulated and there fares have risen faster than in Finland.

And Uber as a ride hailing service was perfectly legal in Finland. The issue was they were hiring drivers that didn’t have taxi permits (and didn’t pay taxes).

View on HN

C'mon. Getting a taxi permit in Finland requires taking a bunch of mandatory courses on highly Uber-relevant topics like "how to use your taxi meter" (185 EUR) and "local navigation without a GPS" (260 EUR), then passing an exam with questions like "from memory, name all roads between random location X and random location Y", meaning you're looking at a bare minimum of 700 EUR and several weeks of full-time study to get licensed: https://taksikoulu.net/kurssit/#hinnasto

And Uber was way (as in, 30-50%) cheaper than taxis while it operated in Helsinki.

Uber is cheaper because Uber's investors subsidize each ride. Don't let this fool you. Uber will get a lot more expensive when those investors want to see returns.

Uber's prices will remain competitive so long as there is healthy competition. If Uber is able to establish a quasi-monopoly in a particular market, then prices will rise.

You’re confusing taxi driver’s permit (which requires exams, not courses) with a taxi licence/permit. Uber drivers didn’t have either and the latter is where the law is very strict. Licenced taxis pay much higher insurance and the cars have to be inspected more often, meaning the costs of a legitimate taxi business are much higher than unlicensed Uber drivers.

> Licenced taxis pay much higher insurance and the cars have to be inspected more often

I have yet to visit a city where these inspections and insurance premiums seem a reasonable cost-benefit trade-off for the median rider. The long-term competition from ridesharing, and lack of prevalent organized rider (versus driver) opposition to it, corroborates that observation.

Such permitting is a crony capitalist scheme to protect the existing taxi drivers at the cost of those wishing to enter into or compete with the industry.

See also cosmetology licenses in many states in the US, which are just dumbest thing.

If the pricing of taxis is correlated with local purchasing power, taxis are almost (#2 or #3) most expensive in the world in Finland.

It doesn't matter if the prices increase or decrease. The price will get adjusted according to the market needs IF there are no other regulations or interferences. If the prices increase, it means that there are other regulations or restrictions in place which are not publicly known or people don't have a need for taxis in Sweden. The former assumption is probably correct one in this case.

Outside of North Europe in countries with similar living costs as Finland taxis are still much cheaper like Israel or Japan even though their taxi markets are also regulated.

Also in Finland car purchases for taxi drivers used to be subsidised with tax money resulting in most of the taxi cars being expensive luxury cars like Mercedes', Teslas etc. Nothing wrong with luxury cars, but most people just wanna get from A to B and not pay fortune for it.

There is no mystery why taxis are expensive in Sweden. Deregulation legalizes price gouging, meaning few people will ride independent taxis or look a new companies. That doesn't just limit competition, but also puts more taxis on the road in relation to riders. Meaning higher costs.

> more taxis on the road in relation to riders. Meaning higher costs.

I didn’t understand this bit

In a regulated market you just, in theory, take the closest taxi because you have no choice. But if there are five companies covering the same area, each company is going to have less coverage or need more cars. Each company is going to have to drive longer to pick up passengers. One company might have no cars available and passengers waiting, while another company has empty cars doing nothing. All in all there is less utilization of cars. I am not sure how big the effect would be though.

That is ridiculous. That's like saying that the food market is more expensive because you can have multiple vendors of food in one area, so it somehow promotes price gouging. I personally like having differentiated choices of food rather than going to the state sanctioned store close to your house because they all have the same things anyways.

> All in all there is less utilization of cars.

Sure. Because there is competition for supermarkets, more food gets wasted. You did not respond in defense of your other point that somehow this would magically raise prices because ???

The food market is more expensive if there are multiple vendors and the customer don't shop around.

The price gouging doesn't come from multiple companies, but from the free pricing. Some independent taxis in Sweden charge 10x as much as established companies. Therefor few people would hail a random cab in the street.

Less utilization means the drivers have to charge a higher price to cover their overhead.

> The food market is more expensive if there are multiple vendors and the customer don't shop around.

Wait, what? The customer is prevented from shopping around for rides? Before Uber, you couldn't call multiple driving services and get a ride. What is your point?

> Some independent taxis in Sweden charge 10x as much as established companies. Therefor few people would hail a random cab in the street.

This makes no sense on the face of it. You could just ask before you get in how much the fare is going to be.

> Less utilization means the drivers have to charge a higher price to cover their overhead.

No, that means they have to drive more and hope they get rides which increases supply and decreases cost. By your logic, the more empty apartments there are in a certain area, the higher the prices for apartments are going to be because of "less utilization" and "covering the overhead".

How do you justify any statement you just made?

What you say is completely bogus. Taxis are not expensive in Finland, they are less expensive than in most Western European countries.

Interesting, I live in Espoo, and usually, I'm hesitant in taking a taxi from Helsinki city center. 20 min ride (17km) costs me on average 45-50 euro. I don't think this is cheap.

It might not be cheap, but it isn't more expensive than in other comparable countries. I've lived in Brussels where it's cheaper to ride a short distance, but as the distance increases the fare is comparable or bigger because the fare/km is higher than in Finland where the pick up fee is higher.

(Finland: pick up 5,90€ + 1,6€/km/1-2 people vs. Brussels 2,40€ + 1,8€/km/1person or 2,70€/km/2 people).

Reply on news.ycombinator.com