>>Plain and simple the taxi industry had a monopoly, got lazy, didn't innovate, and didn't give a shit about their customers.
I take this another SV hubris in trying to look at every problem like they've been working on it for a long time, or have better understanding than the actual people working in that domain for decades.
The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business.
The day these companies are subject to the same tax rules as every body else and have to work without those billions in the bank, it will be game over. There is a reason why these airlines, logistics and transportation companies are always scraping from bottom.
Its very hard to run these businesses if you play by fair rules and don't cheat.
>> The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business.
This is certainly NOT the case in NYC where I live. Artificial scarcity of taxis was created by the city government by limiting the number of medallions to 13,000 and as a result, taxi medallions had cost $1.2 million. Much of taxi fare went to paying for those $1.2 million medallions. Uber has offered lower fees, offers greener rides and lower still fees through Uber pool where passengers share an Uber than the taxi industry with a rating system so that you know if you are getting a good driver. Now those $1.2 million medallions are worth about $700K and many taxis are now not in use and the taxi companies are declaring bankruptcy.
It is possible that if the government had not created the artificial scarcity by limiting medallions Uber may not have gained traction.
The money already came from the sale of the medallions. It isn't a yearly fee, which is good, since at 150m taxi rides per year, that would increase the price of each ride by at least $100.
Though medallion sales also aren't worth anything near $15b, anyway -- the 1.2m figure is what medallion sales peaked at. Most sold for significantly less in the past.
Normally very few new medallions come up for auction; the city knows their value is in their scarcity. Though the current budget[1] accounts for some $400m per year from medallion sales, mostly from the continuing rollout of green/boro cabs, which, if coming from the rest of the system instead, would still be a pretty significant fare hike per ride.
they'll probably institute some kind of tax that if you have a medallion you don't have to pay. Since all the Uber data goes through the internet all the transactions can be tracked and taxed.
> That $15 billion is going to have to come from somewhere.
While governments may tend to think that way, it's ridiculous to assume that once they have a source of revenue it must never go away. That $15 billion could just go away.
More to the point, they already don't currently derive that level of revenue from taxi medallions; those medallions have already been sold. So the only question is whether they try to invent a new source of revenue by adding targeted taxes on something that isn't currently subject to targeted taxes.
Not only do I think you are wrong as other commenters have pointed out the artificial scarcity caused by medallions and the like but for me this isn't about price. I regularly paid $20 (including tip) to get a ride home or to downtown and had no major qualms with it. It's about leveraging technology which the taxi companies never did and are only now starting to do.
>>Its very hard to run these businesses if you play by fair rules and don't cheat.
Yes, exactly why the taxi industry has survived despite not innovating. Their protected status (your idea of 'play by fair rules and don't cheat') allowed them to be lazy and not give a shit about their customers.
I find this amusing, 'Fair' seems to be a word with different meanings to different people based on where they stand.
A journalist thinks, Uber is fair and innovative but a ad blocker is unfair and cheating. Steve Jobs collaborating with other CEO's to drive down programmer salaries is unfair and cheating, while Uber offering the same to drive down driver salaries is perfectly fair to us.
I imagine a job market where companies bid for programmers who would work for least prices. A global kind of a platform which consistently drives our salaries lower.
I find this amusing, 'Fair' seems to be a word with different meanings to different people based on where they stand.
From one of Raymond Smullyan's books: There was one Japanese diplomatic code the US code-breakers couldn't quite figure out during the war, but they settled on an interpretation of "Pro-Japanese" as a working theory. Years later, one of the US crypt-analysts met a Japanese foreign service member and found out from him that the code meant "sincere."
You're right about a lot of things, but 100% wrong in implying that people who have been working in the domain for decades actually know how taxis better than Uber does.
The problem is not knowledge, it's service. Taxis are a perfect example of regulation and stagnation. The shitty service taxis provide have nothing to do with it being hard to provide a good taxi service. They could have provided a better service, they just have no incentive to, because they were protected.
Capital intensive because of the completely backwards requirement of owning a medallion that goes for millions of dollars?
The regulatory capture that entails means that the industry has no reason to improve service because nobody is allowed to compete with them. That's not "SV hubris", that's basic understanding of big business.
I take this another SV hubris in trying to look at every problem like they've been working on it for a long time, or have better understanding than the actual people working in that domain for decades.
The only reason Uber like companies can give you those rides for a cheap price is not because there is some magic, or innovation happening there. Its because they are burning billions of that VC money to subsidize your travel, transportation is a very capital intensive business.
The day these companies are subject to the same tax rules as every body else and have to work without those billions in the bank, it will be game over. There is a reason why these airlines, logistics and transportation companies are always scraping from bottom.
Its very hard to run these businesses if you play by fair rules and don't cheat.