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New York City Places Cap on New Uber, Lyft Cars

New York City Places Cap on New Uber, Lyft Cars

Government knows best…

When competition drags down your product, the smart thing to do is to fix your product and make it better than your competition. Right!?

Instead of doing that with the taxi services in New York City, the city council placed a cap on ride-hailing services like Uber and Lyft and froze “new licenses for one year while it studies the fallout from the booming industry.”

Good Lord. You know why so many people love Uber and Lyft? We can hail a car on our phone, pay on our phone and not have to worry about cash, control the music, etc. Drivers usually keep refreshments in their cars for passengers and I’ve only had maybe one rude Uber driver.

From The Wall Street Journal:

The vote Wednesday by the New York City Council could cripple the growth of Uber and Lyft in their biggest U.S. market as both companies are heading toward eventual initial public offerings. The Silicon Valley companies’ businesses depend on recruiting as many drivers as they can to drive down fares and cut pickup times.

Council members approved a package of bills after months of campaigning from taxi drivers and others in favor of the legislation and a challenge by the ride-hailing companies urging customers to oppose the bills.

Mayor Bill de Blasio, who has championed the measures and unsuccessfully tried to rein in the services in 2015, said he would sign the legislation. “Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” he said.

The ride-hailing firms warned that the cap, which the council approved in a 39-6 vote, would lead to reduced service in the outer boroughs and to higher fares at a time when the city’s subway and bus systems are frequently delayed and overcrowded.

During the one-year ban on new licenses, “the Taxi and Limousine Commission will study whether to regulate the number of licenses in the city and where those vehicles can operate.”

Here’s a wild and crazy idea! Why not evolve with the times and make your product better and more competitive? Why not sit down, look at why people prefer Uber and Lyft, and apply it to your product?

Nope. Government must help. De Blasio also said that “[T]he unchecked growth of app-based for-hire vehicle companies has demanded action – and now we have it.”

Wow. That’s a little scary. Government knows best, I guess! Us regular people aren’t smart enough to know the best way to get a ride around a city or place.

The Taxi and Limousine Commission monitors app-based ride-share companies since New York issues licenses for those Uber drivers. The council vote included allowing “the city to set a minimum hourly wage for ride-hail drivers” and those “companies would be required to fill in the gap if drivers don’t meet the threshold.”

[Featured image via YouTube]


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Heh. Even the commies (actual communists) at NPR saw this one coming a long way off. You start off with something cheap, then there are the sensational news stories about crimes and mechanical failures by individual drivers, followed by government regulation that heavily favors existing business entities.

    JusticeDelivered in reply to Valerie. | August 9, 2018 at 12:19 pm

    While they claim it is about traffic, take a look at their sidewalks, which are also badly congested. The real problem is that there are too many people for the available infrastructure.
    The next step will be a sidewalk use fee, with a limited number of passes available. That would be another revenue stream for NY crooks.

      Mighty_WHrIGHTY in reply to JusticeDelivered. | August 9, 2018 at 6:36 pm

      The sidewalks are not ‘badly congested’. That is people walking! I would ask how much you weigh, but it is too easy to lie.

      BTW, the article contains an obvious contradiction. The NYC ‘product’ must be very successful since it is so crowded. The current population of NYC is at an all time record high.

      As for the ride-hailing services (which I sometimes use), the companies don’t want a freeze because they have a 25% driver attrition rate and need to replace the drivers rather then pay them a decent rate. It sounds like eventually there will be a self-limiting effect. But I can understand that the city doesn’t want an experiment that increases pollution and congestion. Maybe Uber & Lyft can spend the year improving the situation for their drivers? Meanwhile, when I drive on the highway that passes JFK, the ride hailing cars are parked on the shoulder for couple of miles. I think there is a contradiction in that somewhere.

      Of course you can even drive; although as Yogi Berra would say – ‘Nobody drives because there are too many cars on the roads’.

The city seems to make a boodle off taxis. And that money stream, while still substantial, has been collapsing, ostensibly due to competition from Uber and Lyft.

How substantial? The cost of a medallion—needed for legal operation of a NYC taxi—is down to a quarter of a million dollars, less than a quarter of what they were charging a couple of years ago.

Of course relatively few cabbies own their own taxis. They rent or lease them from firms which own fleets. But the driver’s costs are still substantial. The blizzard of fees includes the driver’s license application (your standard auto license isn’t good enough), a fingerprint fee, criminal record check fee, driving record fee, payment to a doctor for his signature on the health form, required insurance, fee for a special defensive driving course, fee for an English proficiency test, and a fee for a special wheelchair accessibility vehicle course. $500 should do it (well, probably not the insurance, but all the city fees).

New York isn’t a city, it’s a giant racket. Trying to understand its operation in conventional terms is a dead end.

    Mighty_WHrIGHTY in reply to tom_swift. | August 9, 2018 at 7:09 pm

    Where to begin? There is no city revenue stream in medallions. They issued them many years ago and they trade on the open market. Michael Cohen would know a lot about that since he speculated in the market and lost his shirt. That might be bad news for someone in a high place.

    Where you live isn’t there a slightly higher fee for a commercial license (that goes to the state – not the city) You would prefer that there isn’t a background check including a driver’s record? You would prefer that they don’t have significant insurance? As a passenger or even am innocent bystander, I sure as hell would like to be able to recover damages in the event that I am injured or my property is damaged.

    BTW, when Uber came to NYC, their drivers and their drivers’ cars need to meet all the requirements of a taxi driver. So that is a level playing field.

    Undoubtedly, NYC is a ‘racket’. But people are moving to the densest places in the country because, despite all the bitching & moaning, the services and accommodations are simply better.

    I guess it didn’t occur to you that every hiccup in NYC is news. Most people don’t give a damn about East Podunk.

I was recently in South Africa for work and the ONLY safe way to travel was via Uber!

    alaskabob in reply to mailman. | August 9, 2018 at 12:00 pm

    Unfortunately these days that is only a relative safety in South Africa.

    Dathurtz in reply to mailman. | August 9, 2018 at 12:51 pm

    The last time I went through the Johannesburg airport was about two weeks after they hosted the World Cup. There was so much nonsense that soldiers were posted in the bathrooms.

Gansters used to roam the streets, but now they wear $1,000 suits and get elected to office.

To paraphrase Mao: “Political power comes from the ability to oppressively tax and regulate into oblivion.

The Left is, and always has been, about CONTROL. They want to regulate every part of your life. Their ideal would be for every wage earner to send all the money to the state and they would send back what they thought you need.

    alaskabob in reply to Romey. | August 9, 2018 at 11:56 am

    The Left says government should stay outside of the bedroom. That is a joke since they want to control everything outside which makes any and everything possible.

    Welcome to the hive.

Here is the deal with Uber, and to a lesser extent Lyft.

Neither one is a transportation company. These entities are dispatch/billing companies for a largely unregulated bunch of private contractors, the drivers. And they are a HUGE money-making scam.

Uber has had problem for years. They have had problems with unvetted, uninsured or under insured drivers. They have had problem with their sliding scale billing algorithm, which essential means that a person had NO idea what a fare would be until they reached their destination. They have had problems with bogus “cleaning” charges. They have had problems with unsafe vehicles. In other words the lack of regulation of Uber, and similar services, is a nightmare for consumers. But, Uber has been very lavish is spreading money around among local politicians. This has resulted in everything from Uber drivers to be allowed to operate with minimal standards [which are often not enforceable until something bad happens] to no regulation at all.

This places these companies in a very advantageous position with respect to established taxi and limousine companies which have played by the rules and are heavily regulated. What the local politicians dis was to change the rules of the game, in the last quarter, to favor an upstart company providing the same services as an established company, without notice.

As to limiting the number of taxi licenses in a given local, this make sense. In urban areas, for hire vehicles are constantly blocking other traffic when picking up and dropping off. They are placing continual stress on the roads and other infrastructure for commercial gain. And, as they are mobile operations, their numbers can not be controlled by zoning laws. So, to control their numbers, and the impact on the rest of the inhabitants of the city, licensing is required. And, as the goal is to control the number of for hire vehicles operating in the urban environment, there is always a cap on the number of such licenses. The same is true in other industries, such as the liquor vending industry.

    Dathurtz in reply to Mac45. | August 9, 2018 at 12:50 pm

    Uber and Lyft have so many safety issues and headaches for customers that everybody wants to use them and taxis have to have special protection laws to compete.

    Colonel Travis in reply to Mac45. | August 9, 2018 at 1:20 pm

    Uber is so horrible to drivers that 67,000 decided to drive in NYC, and passengers are put in so much danger that they make 400,000 trips every single day there.

      Firewatch in reply to Colonel Travis. | August 9, 2018 at 5:30 pm

      I wonder if New York could be corrupt.

      400,000 daily trips is not very much for NYC. According to the MTA, yellow and green taxis handle about three times that many trips a day, with about 70% being in Manhattan. About 80+% of the UBER trips are in Brooklyn and Queens, with very few trips reported in Manhattan. But, this does not address Uber’s checkered history.

      Since its inception, it has been the subject of one scandal after another. First it was that its drivers were not carrying the same level of insurance as their regulated taxi counterparts. Then it was that Uber did not vet its drivers; some of whom had no valid DL or were criminals or had a criminal background. Then there was the big stink about drivers not being paid or only being paid partially. Complaints began surfacing of people being charged $400 for a trip that regularly cost $40 because of the time of day. As a result of that, Uber now estimates the charge, BEFORE the person enters the car. Now, we are treated to the latest scandal of drivers submitting $150 “clean-up” charges which have turned out to be bogus. See the problem here? This is why regulations needs to be in place, in these industries.

    Ragspierre in reply to Mac45. | August 9, 2018 at 7:29 pm

    You can tell that Uber and Lyft work in New York because, given a choice, New Yorkers turn to such services in very large numbers. But there’s something that isn’t working in New York, the Tweedle-Dum and Tweedle-Worthless of American politics. Last night’s city-council vote is the latest proof. New Yorkers can do better, and have.

    And therein lies a lesson, and a sobering example, for the rest of this increasingly urban country.

    You can almost always tell when people are publishing bullshit that suggests a market is under-regulated and THAT’S the problem.

    As you’ll note from reading the whole piece, IF New York City wanted to deal with traffic congestion, there are many approaches to doing it.

    That, of course, isn’t the reason. It’s the pretext.

      Mac45 in reply to Ragspierre. | August 9, 2018 at 10:24 pm

      A couple of points here.

      First, Uber doesn’t “work” because it is cheaper. It is expanding in the outlying boroughs, such as Brooklyn [home to the new yuppy expansion] and Queens. It is making very little in-roads in Manhattan. It is expanding, because it is more convenient to hail the cab on an app on your phone than it is to actually call a cab company and, in the outer boroughs, you are more likely to get quicker response from a part-time Uber driver, than a full-time cabby.

      Second, Uber was initially given access to CHV permits, because it gave a lot of money to politicians. Well, now the politicians are looking at losing support of the the much larger taxi workers and owners groups.

        Ragspierre in reply to Mac45. | August 10, 2018 at 1:06 am

        What’s evident…again…is that you hate markets and innovation, and LOVES you some regulation and BIG GOVERNMENT.

        Uber works because people with choices chose it. NOTHING bars any incumbent cab company from adopting “apps”, and they have. You implicitly lie.

        Post some links that support your bullshit about lavish spending by Uber in New York City. Because we DO know that cabbies are a source of graft, and I CAN provide you links.

        Next, publish some links showing that the whole “congestion” issue is not pretext by corrupt pols in New York City.

        We’ll wait, birther…

    “They have had problem with their sliding scale billing algorithm, which essential means that a person had NO idea what a fare would be until they reached their destination.”

    This is absolutely untrue. While Uber does have “surge pricing” when rider demand outpaces driver supply, the current price is shown to the customer when they’re contemplating summoning a ride, and if they go ahead and summon a driver for a pickup, that’s the price they are charged. It does not change during the trip.

    Most of your other criticisms are equally inaccurate.

    “In other words the lack of regulation of Uber, and similar services, is a nightmare for consumers.”

    Nonsense. There is no “lack of regulation”, and for millions of “consumers” Uber is fine and continues to earn their business. While one can always cherry-pick a few rare disasters, the same goes for taxi rides.

    Two men were shot and killed by Austin cab driver Wayne Lambert after he got angry at them while they rode in his cab.

    Serial rapist/killer Paul Durousseau was a Jacksonville cab driver and made off with some of his victims after they hailed his cab.

    And speaking of NYC, infamous serial killer David “Son of Sam” Berkowitz was a New York City cab driver, he was finally caught when someone noticed his cab had received a parking ticket at the time and location of one of the murders.

In New York City, Uber competes against not only taxis but also against the City’s subway system. Sure, an Uber ride costs more but, as the subway service deteriorates (despite $billons spent to “improve” it), New York’s legendary “straphangers” minds inevitably turn to alternatives.

Who says so? The Metropolitan Transit Authority:

So, de Blasio may be trying to protect the taxis, but, he’s probably also trying to protect the MTA (and, especially, the Transit Union that supports him).

NYC needs some scooters.

This was a system that I believe was devised by an ER administrator who needed to increase utilization of the hospitals facilities. Drunk people on scooters is a fun watch.

And the best part, they have proposed hiring the homeless to drive them to charging stations at night. Hey, when you are all methed up and no place to go, why not ride the scooters for a free meal.