Hacker News Reader

Comment by nchuhoai | Hacker News Reader

First of all, I love Uber, Sidecar and Lyft. I really think that they are the future of transportation.

That being said, it's not that easy to just blame the public officials for all the chaos. It is a reasonable danger to these services, there are so many unknowns. The reason why the cab business is regulated in the first place was for public safety, so that cab drivers wouldn't just ask for exorbitant prices, take your luggage hostage etc. Remember, you are still just jumping into a stranger's car. Regulation was introduced to remedy these concerns (I'm not saying they are effective)

Airbnb shows how regulation is a reasonable concern. Once you go beyond the early adopters, there are so many things you have to deal with like insurance, liability, cleanliness etc. We can't just expect the world to change in an instant and naively believe everyone in the world does good.

View on HN

As a DC resident who loves Uber and HATES HATES HATES the local taxicabs, you are wrong on this. This is not about regulation. This is about an established industry in a city with a one party government that has deep pockets for funding (or defunding) politicians whose election is decided in a primary, not a general election. The taxicab industry in DC is, like in many cities, corrupt down to a point where it hurts the drivers. The corruption starts at the dispatching offices, where the person taking the phone calls for pickups almost never sends a cab based on closest proximity to the pickup. Instead, they base it on who pays them the most kick backs, or perhaps a family member. In this scenario, the consumer and the driver lose due to a corrupt middleman. Talk to any cab driver who picks you up, and ask them about corrupt dispatchers. If they are honest they might tell you about their own dispatchers. Uber is good for the drivers and the consumers. It's bad for the middle men and the politicians. Sedans are already regulated, and Uber handles the "taxi" side of the equation by using GPS to determine distance/time for a fair rate.

I think you can both be correct. It's the lifecycle of regulation: it usually comes about to protect people from real edge cases and bad behavior, but then as the market and norms mature becomes a tool for incumbents to resist disruption. It's very hard to remove regulation once it's in place, even when it's so clearly not needed given new circumstances. It's even harder when the rhetoric in support of it was so heavily moralistic, "protecting the little guy".

e.g., Ask any payments startup about how they feel about payments regulation.

DC is a cesspool. I can't imagine why anyone would want to live there.

There's a difference though. If you hail a cab, you're getting a random person. You have no idea in advance about the quality of the car/ride/service. It's necessary to regulate that.

Companies like Uber, Sidecar and Lyft have to get by on their reputation, or users stop using their apps. These services don't need the same regulation, because customers can vote with their wallets. Insurance,liability and cleanliness are handled by Uber, Sidecar and Lyft sidestep those issues to bring down the price. Ultimately the customer gets to decide how much risk they want to take on, and what service to use. The answer is more choice, not price fixing to prevent honest competition.

Its a cab ride. How important is reputation? I don't think it's that important.

Quality control in the free-market is all about reputation. You don't buy a Dell laptop again after getting a crappy one.

In some industries, however, the market fails to regulate quality by itself. E.g. in the food industry, people can't see measure directly, and when people get sick from invisible contamination, they usually can't precisely trace their sickness to specific food.

E.g. in the medical industry, people are rarely repeat customers. You're unlikely to go back to the same heart surgeon because you had a good experience with them the first time.

Cabs fall in the latter bucket. Because cabbies almost never get repeat customers, and because cabs are selected based on location not reputation or quality, cabbies have no incentive to provide good, safe service. And even if customers were willing to pay more money for better service or safety, they would have very little way to express that through who they hired.

Suppose these are consistent experiences with two different companies, for you and all your friends and family.

Company A: - driver smokes - driver shows up late - driver doesn't speak English - driver drives dangerously

Company B: - driver communicates well - driver arrives right on time - driver drives quickly and safely - driver offers you a choice of different routes

In what sense could reputation not matter?

I imagine the response was in regards to cabs, where reputation doesn't matter. If you replaced Company A and Company B, with Taxi Driver A and Taxi Driver B, you'd see a system where reputation doesn't matter (especially if they can legally keep people from competing with them on price). Reputation does matter when it comes to hiring a car from a company like Uber. If they blow it, I have a real option of not using them anymore.

And the reasons for regulation go beyond consumer protection from shady drivers. Cab companies are regulated in many cities so that they, literally, are part of the public transportation infrastructure. NPR had a recent story about the taxi-towncar debate in Portland that lays out why certain regulations exist, and affords some amount of justification in this debate. Simply put; taxis can't discriminate fares/hours while towncar companies can.

Their source claims that law requires they provide a certain level of service 24 hours a day, 365 days per year regardless of demand. This includes a large portion of cabs be equipped to accommodate the disabled. Further, they are not allowed to discriminate based on the distance or size of fare.[1]

1. http://www.npr.org/2012/06/19/155305029/its-taxis-vs-limos-i...

But taxis still discriminate all the time. Call a cab to come pick you up at your house. They're legally required to come, but there's strong odds that they won't. A lot of taxi drivers will ask where you're headed before you get in. If it's to an area they don't want to go, they'll just take off and leave you there waiting and waiting.

The regulations in place are rarely (if ever) enforced. It's an issue for the free market to settle. Let consumers decide if they want 24 hour a day 365 days per year service, and they can hire the company that will meet that demand. If they want drivers to come pick them up at their house, let them choose a company that is willing to do that. Setting an artificial price floor doesn't do anything other than limit consumer's choices.

To be fair, before smart-phones were invented, the free market wouldn't have worked well for cabs. Cab drivers have zero incentive to compete on quality, because which cab/company you hire is based on who is nearby, not on your previous experience with that cab/company.

Now that you can dial up a cab on your smart phone, things might be quite different.

It would be good for Uber and other companies to take some of these reasons into account and proactively meet some of those needs that led to some of the regulations. A great example that puts them in an awesome position to debate with the taxi commission is having handicap capable cars.

Doing so would put themselves in a position where they are much harder to vilify.

Yet as a wheelchair user in SF, I have huge difficulty hailing a cab, but Uber will come pick me up in 5 minutes anywhere in the city.

There is a big big difference between "regulations say the taxi company must do X" and taxi companies actually doing X.

If NPR was interested in journalism they could try calling some cab companies for a ride form the city center out to the boonies, where the drivers were unlikely to find a return fare.

I just want to clarify, I'm not commenting on the specific regulations in place, just about the general neccessity of regulations in this space.

What happens in the case of an accident? Cab drivers are insured afaik, what happens to a Sidecar driver?

Reply on news.ycombinator.com