Uber, Lyft and Sharing Economy Regulations

[His Divine Shadow]

Uber sounds like, yeah, a race to the bottom. I wonder how long it'll take for economic practices and trends like these to make the bottom of society fall out.

[salm]

Regarding the child labour argument: You don´t even have to go as far as children. There are plenty of consenting adults in horrible job conditions in clothing factories. Sure, they consent because they need the extra 10,50 per day but that doesn´t make it good.
Just because it is possible to create a framework in which some people will work for peanuts doesn´t mean that we should create such a framework.

[Napoleon the Clown]

Let's just ignore the customer/driver aspect of insurance for now, since the libertarian-leaning will scream about "free to choose" until the heat death of the universe. Instead, we'll go with the risk placed upon everyone around an uninsured driver that's suddenly behind the wheel ten hours or more per day.

More time driving=more chance of crashing. Simple, yes? Yes. Now, what if some Uber driver creams you? If they get dropped by their insurance for violating the policies, you'd better hope the driver can pay for any damages to your vehicle, or injuries you have sustained. You can bet your ass that anyone who is so badly in need of some extra cash that they'd be an Uber driver isn't gonna have enough money for you to take them to court. Uber places more road hours in the hands of people who probably don't have the level of insurance they'd need to should the inevitable happen. Nevermind the assholes in the Uber car, what about people around them?

The people in the Uber car aren't the only ones placed in danger of vehicular damages without insurance coverage to pay for the costs. Uber driver rolls through a stop sign and you t-bone them because you didn't have a reason to stop? Well, you'd better hope your car insurance policy is going to cover that shit with minimal fuss. More likely, they'll drag their feet because the other person was at fault and obviously they had a policy. The other company is just trying to deny a claim, take it up with them!

Or the Uber driver runs a yield sign and hits a pedestrian. No insurance coverage for the Uber driver, they were using their vehicle for commercial purposes on a private policy and with a class D license. The insurance company will refuse to pay out. So the pedestrian is stuck footing their medical bills all on their own.

Uber driver hops the curb because they fell asleep at the wheel, runs over people. No insurance, so the people that got hit are without any sort of help.

Six year old fatally struck by Uber driver, Uber won't pay out. The driver was "between shares" so their touted million dollar policy was not in effect. As per the linked article, cab companies provide liability coverage regardless of if the driver actively has a fair or not. So, um, fuck off about this "it's the risk of the driver and the passenger." It's a risk for everyone around them.


Any of these things can happen to any random driver. But driving for a living means more time driving. Long-haul trucking has limits on how long the drivers can be on the road per day. I'm not going to argue against the same rules for cab services, which is what Uber and Lyft ultimately are.

[Raw Shark]

A lot of my passengers pick fights with me about Uber, and a common theme is the perception that taxi companies are trying to stamp out competition in some kind of monopoly scheme. The fact of the matter is that I don't fucking care how much competition I have, as long as I can compete on a level playing field. If the local government is going to refuse to regulate these shady fucks, why should my hands be tied providing the same service? If the law applies to two groups that provide the same service in imbalanced ways it creates an anti-competitive business environment.

As for the cheaper price point, good luck with that at last call, on a holiday or weekend, or after they've driven legitimate taxis out of a given market, when they triple their rates, at least. I'm not allowed to do that, by law.

[Simon_Jester]

Please provide some evidence that cabs are more expensive than having your car towed. I'd really like to see that.

Taking the city of Calgary as an example assuming you drive to the club and park around 10 pm and wouldn't pick your car up until 10 am, not a terrible assumption to make if you're going out clubbing and intend to drink at a moderate to heavy rate. Using the rates found here parking from 10 pm to 5 am could cost you as much as $35 and then 5 am until 10 am would cost an additional $19 on a weekday. So that's $54 in parking alone so the cab would need to save you at least that much plus the cost of getting back to your car in the morning to be competitive with a tow. Not to mention the obvious added value of having your car waiting for you at home.

The average cab fare between say the city center and the suburbs as suggested here is about $50 adding in the worst case parking cost and ignoring the cost of getting back to our car the tow truck needs to beat $104 to be worth your while.

... a tow truck... works out to between $100 and $130. So that price is pretty competitive with taking the cab and cheaper if you assume you need a cab back to get your car the next day. Plus it saves you time as you need to make the drive once as opposed to 3 times. Feel free to call a cab company up and ask them their rate for a 20km tow of an accessible two-wheel drive car if you don't trust my rate.

As I discuss again below, the problem here is that this is NOT a typical use of either a cab or a tow truck. Moreover, you're comparing the cost of cab-plus-overnight-parking to the cost of the tow truck, and then claiming the problem is the cost of the cab.

Driving your car into downtown Calgary, getting drunk, and then being unable to drive back so that you have to decide whether to park your car overnight and take two cab rides OR hire a tow truck is not a fair test of the cost of cabs versus the cost of tow trucks.
_______________________________

Uber is a race to the bottom of low wages and little or no regulation. I find it endlessly amusing how much hipsters around here love it. Cab companies need to adapt better payment methods, Uber certainly has them beat at it, but in the end people go Uber because its cheaper more then anything else in my experience. And Uber has kept cutting its rates lower and lower to keep itself growing, while phasing out its guaranteed driver wages. Drivers are using their own vehicles and insurance to make in the case of one undercover reporter who did it for a month in Phily, all of 10.50 an hour. Its the walmart of transport.

The issue isn't that a service like this exists, it's that there are people that need this 10.50/hour job and that average joes have little enough money that they have to make the choice between security and cost at all. For now this is a niche that needs to be filled, it's also a niche that has a short lifespan because self-driving cars are coming and will drive most taxi services out of bussiness.

Thing is, by participating in and supporting this "race to the bottom" in terms of unregulated services, you're encouraging the creation of the very same kind of desperate economy you're criticizing.

There is more than one stable equilibrium for an economy. Low education, low income, low safety, with people making bad life choices because their immediate short-term poverty closes off the good long-term options is ONE of those equilibriums. High education, high income, with people having the resources to make prudent long term decisions is another.

Allowing corporations to break the law to increase their profits or cut prices charged to the customer will tend to push us toward the "low income" end of the scale.
_____________________

He didn't claim that. He claimed that the risk of being robbed, raped, or killed by a stranger is LESS if that stranger is subject to background checks. This is basic common sense. I mean, what kind of arrogant stupidity does it take to say "my child is more likely to be molested by a relative than by a stranger, so I see no reason why my child's daycare provider should be subject to background checks! I'm sure THEY aren't a child molestor!"

So all those vetted priests, teachers, day care workers police officers etc. that manage to make it past the checks and still murder/rape/molest just don't exist now? It seems like these checks are nothing more than legal boilerplate and about as useful as the TSA. Prove that these screenings actually do reduce the risk in an appreciable way.

Prove the screening actually do nothing.

You're the one claiming that it's pointless to screen, monitor, vet, or regulate people who work with large numbers of strangers in a position of public trust. That is a very strong position to stake out, one that is wildly at odds with the norm in many industries and sectors.

Also, I love how yesterday you were talking about how the real threat for child abuse is family and friends, and now all of a sudden you're dwelling on the danger from the relative handful of "priests, teachers, day care workers police officers etc. that manage to make it past the checks."

You're arguing that:
1) Trusting random strangers is OK because most of them aren't a threat, so we should really be worried about friends and family.
2) Despite security checks, a significant number of random strangers are a threat to children.

You can't have it both ways. Either you can reasonably expect people to trust random strangers without benefit of background checks, or you can't expect that. You cannot simultaneously say "lots of bad people get past the background checks" and say "there is no need for background checks."

What you could say is "the background checks need to be more strict," but that would be a different argument and you'd have to concede on the original issue we were talking about.

But you cannot investigate a complete stranger, you cannot make an informed judgment about their reliability. Therefore, it is in the public interest for the state to do that investigation for you, so that you know you are dealing with a trustworthy business and not with a rapist or a thief.

Is it though? People are clearly speaking with their wallets when they choose Uber over a Cab so why should the government ignore the will of consenting adults in this matter?

Question:

Should the government stop regulating an industry, on the grounds that people keep doing business with a company that ignores the regulations, just because it offers a lower price?

If a company ignores food safety regulations to sell cheap food, should we NOT prosecute that company, and start allowing everyone else to ignore the safety regulations? If a company starts using child labor to sell cheap clothes, should we NOT prosecute, and instead say "child labor for everyone!"

Because that's what you're claiming here. You're claiming that if ignoring the regulations on a taxi business allows Uber to charge less to its customers, then the regulations should be repealed so we can get cheaper taxi service.

I mean hell, when did you turn into an anarcho-libertarian? I thought you were the same guy who keeps going on about how people should be 'forced' to do what seems sensible on various issues.
______________________________

I have never found the services of a tow truck cheaper than those of a taxicab.

Then you've never had to travel a significant distance by cab or been in a city where you have to pay/risk being ticketed for overnight parking.

Ah-HA.

Okay, see, there's your problem. You're trying to compare the price of a tow truck to the price of the taxicab plus something else. Obviously that's not going to produce a fair comparison... and that's not the main reason people ride in taxicabs.

Your problem here is that YOU failed to plan ahead, and created a bizarre situation where you needed the tow truck to avoid having your car ticketed or stuck in expensive overnight parking. That is not the fault of the taxi driver.

Plus, in a situation like that, an Uber taxi (plus overnight parking or tickets) would be almost as expensive as a regular taxi (plus overnight parking or tickets)- because either way you still have to pay those parking fees or towing fees. Those don't magically go away if you replace the taxi company with Uber.

So you're complaining and saying Uber is better than taxis because of a situation where Uber might have saved you $5 or $10... but planning ahead and not being a moron would have saved you much more.

So instead of being a dishonest weasel, how about you actually research the fees per mile for a taxicab versus those for a tow truck?

If the fee for a taxicab PLUS overnight parking for the car you should never have taken downtown in the first place is greater than the fee for having the car towed back to your place... that's a totally separate problem.

Also, I can certainly understand why people want a service to be cheaper. The problem is that "cheaper" also generally means "you get what you pay for." In this case, Uber provides a cheaper service in large part because it's exploiting its employees (by not paying benefits for people who do full-time work on their behalf), and because it doesn't have insurance to cover what happens to its customers.

These drivers are willing to take the work knowing what they'll be paid and people are willing to use the service because it saves money. It seems like a good fit for both people involved because if it wasn't one or both of the parties wouldn't be there. If you regulate services like Uber until they're basically taxi services with all the red tape that goes with that you'll be filtering out a lot of potential workers and customers from this economy.

Do you apply this argument in general? Should ALL industries not be regulated because workers "know what they're getting into" by signing up for exploitative business practices? And customers "know what they're getting into" by purchasing uninsured, substandard services?

Should laws about forty-hour work weeks and overtime pay and so on be abolished because no worker would agree to work sixty or seventy hours a week without massive overtime pay? Because gee, it's not like finding jobs is hard, so surely an exploited employee should be able to leave and find a new job if their boss tells them "work sixty hours or get fired."

And should laws about, oh, airplane safety be abolished because surely customers KNOW which airlines are skimping on safety and airplane maintenance, and will automatically avoid those airlines through the Power Of The Market? Because it's not like people automatically book the cheapest flight a lot of the time and don't stop to do exhaustive research on which airline has the highest safety record before making a purchase... right?

Again, when did you go from being a hardline technocrat to being an anarcho-libertarian?

I mean, your shirts would be cheaper if they were made using child labor. Does that mean child labor laws are bad and that a shirt manufacturer who ignores them should be rewarded for doing so?

There is a difference between forcing children to work and a consenting adult choosing to do a job at a set rate.

Child labor generally happened with parental consent- so your objection is irrelevant. The reason we have laws against child labor is not because the child is unable to consent. It's because it doesn't matter whether the responsible adult consents, it's still wrong to have small children sewing shirts instead of going to school. It's worse for the whole society, it is in particular worse for those children. The fact that people get cheap shirts out of this really does not matter.

Plus, as bad as child labor is, it was and is a major part of getting industry, off the ground in severely underdeveloped nations. Things like the industrial revolution relied upon cheap factory labor and without it things don't develop nearly so quickly. Looking back I think it's clear that the hardships these people endured were worth it to push things forward.

Prove that. Also, you didn't really answer my question. Do you want to go back? Do you want to go back to the time before child labor laws? Do you think that making your clothes cheaper is worth having the clothes manufacturer practice child labor?

While we're at it, should it be legal for the owner of a sweatshop to lock their employees inside the building to make sure they work their long hours, so that when it catches on fire, the building burns down with all the garment workers trapped inside?

Because those "consenting adults" knew what they were doing when they agreed to work in a building they were going to be locked inside, right?

God, this is ridiculous.

Since the Uber service is only a few years old and since criminal cases can take a year or more to process, these data may be hard to find. Moreover, many of the cases you can find will be in Third World countries... precisely because developed nations regulate their taxi services.

Except that even if they did regulate them people would be too poor to use the safer but more expensive service and the underground service would be even worse for having lost the upstanding drivers and companies to the more regulated and expensive market. Thus in this case the very people that are already being preyed upon will only be preyed upon more so and more easily.

So basically you're arguing that America should do things in an unsafe way because in India people are too poor to be able to afford safety?

Also, you're neglecting an important point. One of the ways that undeveloped nations stay poor is because of a lack of social capital, public trust, and the presence of large scale corruption and criminality.

Regulations may seem expensive. But they allow the public to make safe use of basic services like banks, public transportation, licensing agencies, and public utilities. These services then become the basic foundation of infrastructure that allows a society to build wealth. Remove the regulations, and you see a steady stream of wealth being lost out of the pockets of honest people who earned their money in ways that improve society... into the pockets of dishonest and unscrupulous people.

I would argue that for a country like India, the question is not "can we afford to ensure our taxi drivers aren't actually muggers?" The question is "can we afford not to?"

It's not necessarily different. But if the 'trade and swap' group expands until it's a large for-profit corporation with stock valued in the billions of dollars, and which is providing billions of dollars worth of services to millions of people every year... Then at some point, the group is large enough that it needs some degree of inspection and certification by the state, because the ability of a group that size to cheat the public is potentially very large.

So it's fine until it isn't but you won't clearly define how large is too large or outline what Uber is doing to cheat people...

What Uber is doing to cheat its employees is pretending they're not employees, even if they labor for forty hours a week on its behalf.

Uber is cheating its customers only in cases where the consequences of unregulated taxis apply. For example, if anyone gets injured in a car accident involving an Uber driver, and they're not covered by insurance... that person has been cheated by Uber. Because if they'd taken a normal taxi, they'd be covered, because the normal taxi company obeys the law.

So there, I've outlined that.

As to "how large is too large," that's easy.

Uber is a for-profit corporation. That's the dividing line: someone makes money off the Uber service, by brokering the service of their employees (the drivers) the customers. Nobody is making money off your Facebook swap meet setup.

Uber isn't just a casual network of friends and acquaintances who carpool. It's a business. It does exactly what a taxi company does, and the only difference is that it has a special piece of computer software that it uses to alert its taxi drivers to the availability of fare-paying customers.

This is a problem why...?

Because they're ignoring the laws that govern taxi companies, while claiming NOT to be a taxi company, while doing exactly the same thing a taxi company does with only a slight modification.

Because in a case like that the customer has no practical means of assessing the risk.

They've already assessed the risk when they decided to look for a cheaper alternative to a traditional moving company.

Nope!

I mean, let's be honest. To "assess the risk" you would have to:
1) Know the danger of being injured while riding in an underinsured Uber vehicle... which you don't, and probably can't know. Because Uber isn't collecting statistics and would probably actively resist anyone else who does so.
2) Know the risks resulting from Uber drivers being distracted by their electronics that tell them where to go, or by lack of rest from having to work longer hours than a law-abiding taxi driver to make the same amount of money.
3) Be able to compare both these risks to the corresponding risks for taxi drivers.

I don't think you're remotely qualified to do those things. You've certainly shown no sign of that qualification in this thread.

So it's laughable to claim that because I signed up for the cheap service, I 'logically' must have done so after making a careful, balanced risk assessment.

Then they post online about said group of junkies/thieves/poor quality movers and people don't use that group in the future. Plus there's nothing stopping other companies from offering Uber insurance, Uber themselves could even sign a deal with insurance firms and offer it as an extra service that you can pay for that covers you for the duration of that trip. Now we've opened up yet another market and means for people to make money off this service while still offering a choice between Uber and a traditional cab.

Except that for traditional cabs it is mandatory that the company get the insurance. Auto insurance isn't an optional extra, Jub. It's required, because the consequences of driving around on the road uninsured an cause massive financial harm to innocents.

Why are you saying it should be 'optional' for Uber to get this insurance?

Moreover, there is a totally separate ethics issue you haven't even touched. Uber isn't about one guy giving strangers a ride for money. It's about a for profit corporation which is making hundreds of millions if not billions of dollars a year off its business model. If they're making that kind of money off the public, the public has a right to know that:

1) Uber is prepared to vouch for the quality and reliability of its drivers, and
2) Those drivers are receiving the appropriate level of care and benefits that we would normally expect from employees who work comparable hours for any other for-profit corporation.

If Uber turns out NOT to be able to provide these services, while charging less than normal taxi companies, and still make a profit... well then, it turns out Uber never was this brilliant new way to get around town.

That Uber doesn't do this is precisely the reason they can keep costs down. People are clearly willing to roll the dice on these issues to both drive for and ride with this company. Thus far the service seems to be paying it's drivers the agreed upon rate and getting passengers to the places they need to go. So long as they keep doing these things, I'll continue to support them.

Again, when did you turn into an anarcho-libertarian? Is it okay to ignore the law as long as you "get stuff done," where "get stuff done" means "Jub hasn't heard about you being the target of a massive lawsuit yet?"

If Uber can't provide benefits for its drivers and insurance for its customers, Uber's just another affirmation of the old truism that you can make a lot of money fast if you're willing to break the law... until you get caught.

If these drivers had better options for work they'd be taking them.

So basically, it's okay for a business to break the law if the people they're victimizing have no choice but to continue doing business with you?

Uber has a niche that niche being cheaper rides with less protections for both driver and passenger. Thus far they aren't going around robbing people, or causing accidents and they don't seem to have trouble attracting drivers. So clearly they're filling a need within the current market that can't be or isn't being filled by cab companies.

Again, it turns out you can make a quick dollar by breaking the law. You're arguing that as long as they don't get convicted, then the fact that they made the quick dollar proves it's okay to break the law.

Is this really a place you are comfortable standing in?

[Simon_Jester]

I do find the libertarian almost religious attitude that government is inherently bad to be somewhat unhinged.

Instead of regulations vs no regulations, it should be a factor of what regulations are appropriate and which ones are not.

That being said though, if Uber and other sharing apps are developing and experimenting with new ways of transacting business between company and worker, company and driver, etc, who are we (society and the government) to step in and break things up. Suppose instead of classifying drivers as independent contractors they (Uber) created a completely new category called "Blah, Blah, Blah." Uber Drivers would not be independent contractors, or employees, but "Blah, Blah, Blah's" and the what benefits, rights, and privileges constitute a "Blah, Blah, Blah" are defined by Uber in negotiation with the people that will drive for them. Given that if drivers are not happy with that, it would be relatively easy for someone else to create their own startup with an app and have terms that are more attractive to drivers. I don't see why the government should be involved.

Because this could very easily become a way for ANY corporation to ignore regulations about the rights of employees (or independent contractors).

Suppose you have five identical corporations with identical business models who have employees. Each corporation's legal department has a brilliant idea. Company One says "aha, according to our new contract, these people who work in our building AREN'T employees, they're uh... gazorninplats!" You ask what a "gazorninplat" does, and the answer is "the same things an employee does, only it's AWESOME, because it turns out there's no federal regulations on how you treat a gazorninplat!" From the company's point of view, this is great. From the point of view of the employees newly reclassified gazorninplats, this is not so great.

To make matters worse, Company One can reclassify its employees as "gazorninplats" while Company Two calls them "freebleflasms" and #3 calls them "krzjdlwscs" and #4 calls them "emboldened cromulators" and so on. Despite the fact that in the end, they're all doing exactly the same thing the same way.

There is no reason why the government is obliged to honor these corporations' attempts to expand the dictionary, and a lot of reasons why they shouldn't.

The result of all this is that the government rightly takes a dim view of people who try to pretend the law doesn't apply to them because of some new legal category they just made up.

So that's why the government is involved. The government is already involved in the regulation of the taxi industry, and Uber's attempt to dodge those regulations by cunningly reclassifying its "taxi drivers" as "not-taxi not-drivers" is childish and absurd.

A tail is still a tail, even if we agree to call a tail a leg.

On the licensing side, I'm on the side that if customers don't care if driver's have Taxi licenses, then drivers should have to have them due to government dictates.

Does that mean you agree with me, or with Jub?

On the insurance side, I'm more on the side of the regulators because while it's not something customers will think about, they will be in for a rude awakening if they get in an accident and their injuries aren't covered (though in an ideal world the person's health insurance would take care of that, or we would have universal health care.)

Thing is, then your taxes might go up because Uber's hiring unsafe drivers and increasing the amount of money the government has to spend on health care...

An alternative to the regulations though could be that it is made clear to both the driver and passenger that there is no insurance so if an accident happens, you're SOL. I would imagine that some passengers would steer clear of Uber because of that, just as some people they steer clear of Uber because they don't like the idea of driving in some stranger's car.

Yeah. It'd be pretty cool if the Uber app were legally mandated to come with this voice recording that reads "Danger: there is an undisclosed but high probability that your driver has no commercial driver's insurance. In the event of an accident you may be left holding the bag for medical expenses of an unknown amount between zero and infinity dollars. Do you want to proceed, yes or no?"

For maximum hilarity I picture GLaDOS from Portal reading that.

[Sgt_Artyom]

Please provide some evidence that cabs are more expensive than having your car towed. I'd really like to see that.

Taking the city of Calgary as an example assuming you drive to the club and park around 10 pm and wouldn't pick your car up until 10 am, not a terrible assumption to make if you're going out clubbing and intend to drink at a moderate to heavy rate. Using the rates found here parking from 10 pm to 5 am could cost you as much as $35 and then 5 am until 10 am would cost an additional $19 on a weekday. So that's $54 in parking alone so the cab would need to save you at least that much plus the cost of getting back to your car in the morning to be competitive with a tow. Not to mention the obvious added value of having your car waiting for you at home.

The average cab fare between say the city center and the suburbs as suggested here is about $50 adding in the worst case parking cost and ignoring the cost of getting back to our car the tow truck needs to beat $104 to be worth your while.

There isn't a handy tool for calculating what a tow along the same route would cost, but speaking to a friend who used to drive a tow truck the cost works out to between $100 and $130. So that price is pretty competitive with taking the cab and cheaper if you assume you need a cab back to get your car the next day. Plus it saves you time as you need to make the drive once as opposed to 3 times. Feel free to call a cab company up and ask them their rate for a 20km tow of an accessible two-wheel drive car if you don't trust my rate.

I live in Calgary and used to work a night job. When I worked so late the buses weren't running I'd have to cab it home and let me tell you, you can nearly cross the entirety of the city for $50. Parking downtown can be exspensive you're quite right but there are plenty of places that offer cheaper or free nighttime parking and honestly, very few people I know actually drive downtown for a night out since it's hard to find the space. $3.50 to take transit DT and you're only 10-15 min away from nearly any bar or club on 17th ave or anywhere else DT for that matter. As for the whole tow-truck thing, quite a few people have AMA coverage (Alberta Motor Association), I spend $80 a year and I get nearly 400km of free towing. Nearly everyone I know has AMA because it's rather sensible to have as it has the potential to save you quite a bit of money as they provide many other services. Anyone who comes to Calgary and spends nearly a hundred dollars just to park DT and the like is a complete fool.

[Sgt_Artyom]

I guess what I'm really saying is that like a few others have pointed out, you're taking several things and adding the cost up to the point where taking a taxi seems like it's entirely too expensive or inconvenient whilst Uber is a "White Knight" that comes to save me from the evil taxi companies and their regulations by giving me a ride home for slightly cheaper when most of the costs you mentioned could have been entirely avoided with a little bit of thought and foresight. It's not even close to being a fair comparison in my opinion.

[Arthur_Tuxedo]

The ride-sharing debate is a fascinating case study in inflexible over-regulation vs exploitative under-regulation. The cab companies have operated under such stability and guaranteed demand for so long that they've forgotten that for-profit companies are supposed to focus on efficiency and providing a good experience for the customers. Thus, even years after Uber and Lyft have become popular, you still have rude and unresponsive dispatchers, lack of information on where your cab is and when it will pick you up, credit card machines that frequently don't work and blare ads at you, and even when functional charge such usurious rates to the driver that he will often disable them or beg you to use cash (often offering to drive to the nearest ATM, "great" customer experience there). On the regulatory side of things, the taxi commission happily continues to charge hundreds of thousands of dollars for a medallion and refuses to relax any mandates despite allowing the ride sharing companies operating in a lawless Wild West. On the other side you have Uber, whose behavior toward its drivers, wronged customers, and municipalities has been dishonest, manipulative, and exploitative, but has gotten away with it by growing so big so quickly due to reckless expansion while flouting the law, knowing that the slow moving legal system would take long enough to catch up for them to bring billions of dollars to bear by the time of the inevitable legal showdown (which is still in the early pre-stages despite Uber operating this way for the better part of a decade).

The venerable taxi model is a case study of the perils of over-regulation and how creating a safe, predictable business environment tends to cause quality to decline over time. The Uber model is a case study of the dangers of asymmetrical access to information and how dishonest assholes can make a quick fortune by lying to and endangering the public, and puts the lie to the claim that consumers and laborers will make informed choices in an unregulated market (ex. riders that call an Uber during surge pricing instead of a much-cheaper taxi or drivers that think they're making $30 / hr when they're actually making $9 after expenses). If Uber can't make a profit by providing the guarantees and benefits that the taxi companies do, then they belong in the trash bin of history, but those taxi regulations could stand to be relaxed.

[Simon_Jester]

Well, the regulations need to be relaxed to permit competition. Medallions shouldn't be ruinously expensive, and so on.

But the main problem here is that, as Zaune observed a while back, it seems like in the modern political environment you can get in more trouble for "reckless endangerment of a business model" than you can for breaking the law in the first place.

[Zaune]

I should point out that I stole that one from someone on Techdirt, by the way.

And some of the rules should actually be tightened to prevent competition, incidentally; I don't know about most of the US, but cab fares are set by the county here in England precisely to stop the kind of price-gouging Uber are notorious for. I think minicabs used to be slightly cheaper where I live, but now that everyone and their grandma has a mobile phone that's been done away with.

[Guardsman Bass]

Well, the regulations need to be relaxed to permit competition. Medallions shouldn't be ruinously expensive, and so on.

They should be banned outright, or at least have no fixed number. Having a politically fixed number of medallions in a taxi market is inherently predatory - it creates a group of existing medallion-holders who will fight vigorously to oppose further expansion in the taxi supply lest it diminish the value of their investment, it pushes power into the hands of taxicab companies at the expense of their drivers (since the drivers can't just say "fuck you" to an abusive cab company and go out on their own if they're otherwise complying with safety/rate regulations), and it makes it extremely difficult to actually penalize taxi drivers and companies that violate rules because pulling a medallion amounts to a kind of death sentence that authorities are very reluctant to impose because it costs the medallion holder a ton of money. Case in point is Chicago, where the city department in charge of cabs gets about 12,000 complaints a year but has pulled a whopping five of them in 9 years.

In any case, I mentioned near the beginning that Uber is politically useful for forcing the question on needed reforms in existing taxi markets. It's sort of like how massive digital piracy forced existing music rights-holders to try and respond by developing new digital models of distribution. They're a necessary evil in the short-term.

I wouldn't be too worried about them surviving without change in the long-run, though. They're going to get hit with requirements for commercial drivers' insurance and the like, sooner or later - and considering that Uber has run from markets requiring that before, I think it's fair to say the company will either shrink or change in response to that. Nor are they even remotely worth their bloated valuation, since once you get outside of the major taxi markets in some big cities the potential gains are much lower (cities where most of the population doesn't drive are a rarity in the US).

[Arthur_Tuxedo]

I've been trying to find numbers on Uber's cash flow but they don't seem to be readily available. Given that we're almost certainly in a tech valuation bubble, I wonder if Uber is going to survive if it pops.

[Guardsman Bass]

I don't think they'll die outright, but I do think they'll shrink a lot - and sooner or later, Travis Kalanick is going to be forced out when the company changes strategy to put on a more "friendly" face. I found this list of cities ranked by the percentage of the population without cars. There are a few with percentages above 30%, but we're still talking about a handful of urban taxi markets here - once you get outside of those cities, most of the carless households tend to be pretty poor. You're either hustling for the luxury market (small but lucrative) or scrounging for traffic from tourists and lower-income folks. That doesn't seem very conducive for massive revenue growth, especially since they have a ton of competition in those markets.

[Lord MJ]

Because this could very easily become a way for ANY corporation to ignore regulations about the rights of employees (or independent contractors).

Suppose you have five identical corporations with identical business models who have employees. Each corporation's legal department has a brilliant idea. Company One says "aha, according to our new contract, these people who work in our building AREN'T employees, they're uh... gazorninplats!" You ask what a "gazorninplat" does, and the answer is "the same things an employee does, only it's AWESOME, because it turns out there's no federal regulations on how you treat a gazorninplat!" From the company's point of view, this is great. From the point of view of the employees newly reclassified gazorninplats, this is not so great.

To make matters worse, Company One can reclassify its employees as "gazorninplats" while Company Two calls them "freebleflasms" and #3 calls them "krzjdlwscs" and #4 calls them "emboldened cromulators" and so on. Despite the fact that in the end, they're all doing exactly the same thing the same way.

There is no reason why the government is obliged to honor these corporations' attempts to expand the dictionary, and a lot of reasons why they shouldn't.

The result of all this is that the government rightly takes a dim view of people who try to pretend the law doesn't apply to them because of some new legal category they just made up.

So that's why the government is involved. The government is already involved in the regulation of the taxi industry, and Uber's attempt to dodge those regulations by cunningly reclassifying its "taxi drivers" as "not-taxi not-drivers" is childish and absurd.

A tail is still a tail, even if we agree to call a tail a leg.

Because with new ways in which people are getting together and transacting business, being tied into constructs defined by governments while waiting for the agonizing slow pace of policy changes is untenable for an innovation ecosystem. Governments play a huge part in structuring, creating, and managing an economy, but the minute that two independent actors can't define a relationship between each other on their own terms, government becomes a hindrance. Keep in mind that when Uber first defined the nature of the relationship between the firm and drivers, it wasn't a multi-billion dollar corporation, it was a small startup. In which case the initial drivers could accept the terms or push back, in which Uber would have to redefine the terms in a manner that would be acceptable to even get the initial drivers on the platform. And over time that framework grew into a multi-billion dollar business. I see no reason why contract law rather than employee-independent contractor law shouldn't govern the relationship here.

On the licensing side, I'm on the side that if customers don't care if driver's have Taxi licenses, then drivers should have to have them due to government dictates.

Does that mean you agree with me, or with Jub?

Should have said: "On the licensing side, I'm on the side that if customers don't care if driver's have Taxi licenses, then drivers shouldn't have to have them due to government dictates"

On the insurance side, I'm more on the side of the regulators because while it's not something customers will think about, they will be in for a rude awakening if they get in an accident and their injuries aren't covered (though in an ideal world the person's health insurance would take care of that, or we would have universal health care.)

Thing is, then your taxes might go up because Uber's hiring unsafe drivers and increasing the amount of money the government has to spend on health care...

Which is why I'm more sympathetic to the argument that Uber drivers should have proper insurance (or Uber is responsible for providing the proper insurance) that I am for the argument that Uber drivers need to get licensed by the state and that Uber and their drivers can't define their own relationship and terms of how they will interact and transact business.

[Vendetta]

Governments play a huge part in structuring, creating, and managing an economy, but the minute that two independent actors can't define a relationship between each other on their own terms, government becomes a hindrance.

Until one of them decides they need help getting the terms of that relationship enforced.

Which is why governments get to decide which contracts are going to be valid. Because it is the body which, via a monopoly on force, is empowered to enforce the terms of contracts.

[Lord MJ]

Governments play a huge part in structuring, creating, and managing an economy, but the minute that two independent actors can't define a relationship between each other on their own terms, government becomes a hindrance.

Until one of them decides they need help getting the terms of that relationship enforced.

Which is why governments get to decide which contracts are going to be valid. Because it is the body which, via a monopoly on force, is empowered to enforce the terms of contracts.

But if both parties define a contract agree to it, offer, and acceptance. They why can't that be the arrangement that is used and enforced via courts if there is a breech, as opposed to state predefined definitions?

[Vendetta]

Governments play a huge part in structuring, creating, and managing an economy, but the minute that two independent actors can't define a relationship between each other on their own terms, government becomes a hindrance.

Until one of them decides they need help getting the terms of that relationship enforced.

Which is why governments get to decide which contracts are going to be valid. Because it is the body which, via a monopoly on force, is empowered to enforce the terms of contracts.

But if both parties define a contract agree to it, offer, and acceptance. They why can't that be the arrangement that is used and enforced via courts if there is a breech, as opposed to state predefined definitions?

What gives the court the power to enforce contracts?

The Government's monopoly on force.

The Government is called upon to enforce contracts and so it decides which contracts are valid.

[Lord MJ]

And in general a contract is valid, if it contains an offer, consideration, and an acceptance. Which is what is there in this case. So why given that we have these three things, is the government saying "Nah, that's not valid use these old definitions and categorizations instead. Oh you want to change those categorizations based on the realities of the sharing economy, ok, we'll be extra slow in making the changes and we may still not make any changes at all."

[Imperial Overlord]

And in general a contract is valid, if it contains an offer, consideration, and an acceptance. Which is what is there in this case. So why given that we have these three things, is the government saying "Nah, that's not valid use these old definitions and categorizations instead. Oh you want to change those categorizations based on the realities of the sharing economy, ok, we'll be extra slow in making the changes and we may still not make any changes at all."

There's also "these terms contravene law X so no this contract isn't valid."

[Vendetta]

And in general a contract is valid, if it contains an offer, consideration, and an acceptance.

No, you're missing something.

A contract is valid if there is also the power to compel obedience to the terms of the contract.

You see you've missed a very important thing about contracts, which is that the minimum number of entities involved in a contract is three not two. There are two who agree to be bound by the terms of the contract and one which has the power to compel them to do so.

And by power I mean the traditional brute strength to overcome either of the other two and force them to comply. In the modern world that would be achieved by having the police turn up and arrest the noncompliant party and carry out the judgement of the court upon them.

Without that third power a contract is worthless, if you do not have the power to force the other entity to hold to the terms of it then you have no recourse if they choose not to, and if you do have that power then you can just force them to do what you want anyway and don't need the contract.

That is the role of government, to be the party which compels the others to abide by the terms of the contract entered into.

Which is what, in the end, gives it the power to decide what is or is not a valid contract, and also makes it necessary for it to do so because that allows people wishing to enter into contracts to reasonably predict what the enforcing body will do in cases of dispute, rather than terms of contracts being enforced by individual whim.


Contracts require government, without government the only contract is "I can hurt you until you do what I want, so do it or I will hurt you".

[Simon_Jester]

Vendetta, I like that insight about contracts having three parties, not two.

Because with new ways in which people are getting together and transacting business, being tied into constructs defined by governments while waiting for the agonizing slow pace of policy changes is untenable for an innovation ecosystem. Governments play a huge part in structuring, creating, and managing an economy, but the minute that two independent actors can't define a relationship between each other on their own terms, government becomes a hindrance.

Except that realistically, employees almost never get to "define on their own terms" the terms of their employment, unless of course they form a union. No typical employee has as much power to set the terms of their employment as the business that hired them.

Even when Uber was a small startup, if one of its prospective drivers didn't care for the terms it was offering to employ Uber drivers... Uber still had the freedom to shrug and find another prospective driver. There are no shortage of people willing to drive around in a car all day for what they think is $20 or $30 an hour but actually isn't when expenses are factored in.

Whereas the individual Uber drivers are in a more vulnerable situation because if they raise enough of a stink to get better and more fair working conditions, they could get fired, and then they would be out of a job for weeks or months trying to find new employment- possibly while their family suffers the consequences.

This has been an issue since the 19th century, and the Information Age has not changed it. If anything it's made the problem worse. Jobs seem to be if anything harder to get now. Harder than they were before the Internet made it practical for each individual jobseeker to apply to hundreds of different positions, resulting in human resources robotically deleting most of the jobseekers' resumes without even reading them.

So there never was a condition of "two independent actors [defining] a relationship between each other on their own terms." It simply never happened. It's a libertarian fantasy that this is how the job market normally works.

What there is, and was, and will be in the future, is a situation where employers set terms for the people who work on their behalf. That was true in the Stone Age, it was true in the Steam Age, and it shows every sign of being true in the Digital Age. Virtually the only things that ever change this are mass action by the workforce (the Secessio Plebis, the general strike, maybe the Facebook powered boycott or some such in the future), or top-down action by the government.

By arguing that the government shouldn't interfere in the "free choice" made by gunpoint "negotiations" between employees who need to stay hired in order to live and employers who have them by the short hairs... The de facto result is exploitation of the workers, on a large scale that cannot get better until and unless the workers literally revolt to change the system.

Keep in mind that when Uber first defined the nature of the relationship between the firm and drivers, it wasn't a multi-billion dollar corporation, it was a small startup. In which case the initial drivers could accept the terms or push back, in which Uber would have to redefine the terms in a manner that would be acceptable to even get the initial drivers on the platform. And over time that framework grew into a multi-billion dollar business. I see no reason why contract law rather than employee-independent contractor law shouldn't govern the relationship here.

Because Uber treats its drivers like employees whenever it is convenient for them to do so, then treats them like independent contractors whenever it is convenient for them to do so. They can't have it both ways.

They want to have it both ways, of course... because it profits them. But there is no reason why society is obliged to view the interests of Uber as superior to the interests of Uber's drivers.

[Uber is not the only company that does this; it's a broad problem with American labor law]

On the licensing side, I'm on the side that if customers don't care if driver's have Taxi licenses, then drivers should have to have them due to government dictates.

Does that mean you agree with me, or with Jub?

Should have said: "On the licensing side, I'm on the side that if customers don't care if driver's have Taxi licenses, then drivers shouldn't have to have them due to government dictates"

Then I'll ask you the same question I asked Jub, more or less.

Do you think that this same logic applies to food safety? Suppose McDonald's can undercut its competitors by 10% on price if it starts ignoring food safety laws. Suppose that people who decide 'what can possibly go wrong' eat there preferentially and it gives McDonald's a competitive advantage.

Does that mean we should honor the public's choice and NOT require McDonald's to honor safety regulations due to government dictates?

Or does that mean that we should ignore the actions of random people who probably have literally no idea about the consequences of, oh, salmonella poisoning? And instead, maybe we should assume that the existing laws are on the books for good reasons, and that laws regulating the conduct of people in contact with the public are a necessity. I'd say they're certainly a necessity if we are to protect the public from scams, cheats, frauds, and psychopaths out to make a quick buck at the expense of causing several dollars of harm to the population at large.

Am I just being foolish here?

Which is why I'm more sympathetic to the argument that Uber drivers should have proper insurance (or Uber is responsible for providing the proper insurance) that I am for the argument that Uber drivers need to get licensed by the state and that Uber and their drivers can't define their own relationship and terms of how they will interact and transact business.

Thing is, the insurance and the licensing are all part of an interrelated package. The insurance companies don't even bother issuing commercial driving insurance to people who don't have a commercial driving license, just as they don't issue normal auto insurance to people who don't have driver's license.

If you stop requiring commercial drivers to have commercial licenses, you shift the burden of properly assessing whether those drivers are safe risks onto the insurers. Who are likely to solve the problem by not trying and refusing to issue the relevant insurance. Or issuing it at inflated premiums that cost everyone, not just the Uber drivers.

[blowfish]

Then they post online about said group of junkies/thieves/poor quality movers and people don't use that group in the future. Plus there's nothing stopping other companies from offering Uber insurance, Uber themselves could even sign a deal with insurance firms and offer it as an extra service that you can pay for that covers you for the duration of that trip. Now we've opened up yet another market and means for people to make money off this service while still offering a choice between Uber and a traditional cab.

You are literally trotting out the same argument that bitcoiners bring forward every week when another one loses their life savings to a blatant scam, by a blatant scammer, who has been called out as a scammer several times

As has been brought up already, people are usually idiots. In addition, even when not being an idiot about a particular issue, being able to trust that X company providing service Y (e.g. a taxi company providing a ride wherever I want to go) will do so reliably and without exposing me to excessive risk is a benefit in and of itself. I have better things to do than whip out my google glass ipone every time I carry out a business transaction just to make sure I'm not dealing with a known scammer who doesn't get shut down because of insufficient regulation.

[Lord MJ]

Been away, but do have more given the recent episode in New York City regarding Uber. I'm not really sure what NYC is trying to accomplish here. Traffic congestion? By people that are using their personal vehicles that are already on the road already? In perfectly fine with reasonable regulations, I am not fine with Government having a need to have control over things, nor am I fine with people trying to apply old legal systems to new economies and paradigms.

http://techcrunch.com/2015/07/22/uber-a ... t=FaceBook

Uber, Airbnb And The Conflict Between Policy’s Ratchet Effect And Tech’s Accelerating Speed
Posted 12 hours ago by Kim-Mai Cutler (@kimmaicutler)
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One day before New York’s city council was about to vote on capping Uber’s growth, the company and Mayor Bill de Blasio reached a last-minute agreement for a four-month study on the company’s impact on city congestion. Likewise, here in San Francisco, Airbnb and a group of property owners and affordable housing activists will butt heads through an initiative on the November ballot.

These conflicts aren’t necessarily about what Uber or Airbnb are today. They are about what these companies are under pressure to become, given their respective and recent $50 billion and $25 billion valuations. Moreover, it’s about what those pressures imply for public infrastructure like roads and the city housing stock, which are inherently much harder to scale than software.

Throughout last week, Uber accounted for just a little over 3,200 drivers per hour in New York City, or about a quarter of the number of the city’s licensed taxis, according to data it released this morning. The company argues this is a drop in the bucket relative to the 2.7 million vehicles that enter the city every single day. However, transit researcher Charles Komanoff ran Uber’s own data this morning through his model of New York City traffic, and calculated that the service probably slows speeds by 7.7 percent in Manhattan’s city core.

In response to Uber’s accelerating pace of growth, the city’s deputy mayor Tony Shorris met with Uber’s team, including former Obama strategist David Plouffe, early last week. They had questions about fees, as taxis are required to pay a 50 cent surcharge per ride toward public transit and the MTA, giving the system $90 million in funding every year. They also had questions about disability access, as well as worker and passenger rights.

But the bigger question was about Uber’s expected rate of growth, which the company balked at.

“There’s a real difference of ideology here,” said a source close to De Blasio’s impact study. “You have a company that believes that the free market will essentially correct any negative externalities. What if there are so many drivers that nobody can make a living or that there are so many drivers and vehicles that we have unbearable congestion? There is a world in which Uber is still making money while our traffic moves at five miles per hour.”

They added that the city instituted medallions during the Great Depression eighty years ago when 30,000 drivers trawled through the streets to earn money. “There were so many people driving cars for nickel fares that nobody could make any money. The congestion became unworkable, so Mayor [Fiorello] LaGuardia installed medallions because we had a tragedy of the commons.”

But on the converse side, policy and laws have an unintended, and sometimes nasty, effect of sticking around for years or decades even as circumstances clearly change. It’s called the ratchet effect, and it’s much easier to ratchet in favor of limits than it is to push for growth.

For instance, New York City’s cap on medallions remained unchanged at 11,787 from the end of the Great Depression on through 1996, an imposed level of scarcity that has made medallion values skyrocket to north of $1 million each until Uber arrived. Those values enabled the taxi industry to be one of De Blasio’s sources of political donations, with hundreds of thousands of dollars in contributions.

Likewise, if we look at the hotel and housing shortage in San Francisco, it was much easier to downzone the city in the early 1970s through 1980s than it has been to upzone space through neighborhoods plans that happen one by one and take several years each. Because of the city’s historical and cultural aversion to height, developers are now pushing for aggressive subdivisioning through new “co-living” or group housing projects. It’s also made Airbnb hosting increasingly attractive as it costs anywhere from $300,000 to $1 million to construct a new hotel room.

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Now Airbnb’s growth has raised concerns that the service will eat into San Francisco’s limited housing supply without proper control. A San Francisco Chronicle study found that at least 350 units appear to be permanently rented out on the platform. That doesn’t sound like a lot compared to the city’s total housing stock of about 380,000 units.

But every time the city loses a permanent residential housing unit to short-term rentals, it has a net negative economic impact of $250,000 to $300,000, according to the city economist and UC Berkeley professor Ted Egan. This easily adds up to more than the roughly $1 million per month in taxes that Airbnb remits to the city. And every time the city wants to build a new affordable housing unit to replace one that is lost through a no-fault eviction, it has to dredge up several hundred thousand dollars in subsidies from elsewhere. This heightens the city’s current paralysis over building the right mix of subsidized and market-rate housing.

“Technology has been challenging policy makers and government as these products facilitate the rapid scaling of rather old ideas like couchsurfing or subletting into practices that any almost individual can easily participate in,” said city supervisor Jane Kim in a vote on Airbnb last week. “As we as policy makers race, or not, to keep up with the technology that depends primarily upon city infrastructure — our density, the tourism attractions we already provide here, our roads — to create products that generate profit for these private companies, we have decisions to make.”

Those decisions are tough if no one trusts each other.

How can companies really believe that purportedly temporary measures don’t become set in stone forever?

And on the other side, how can city governments work with companies that only selectively share data on their impact when it’s politically convenient, and which resist for months and years to pay basic taxes which sustain the public infrastructure that makes their businesses possible?

As John Markoff, who has covered Silicon Valley since the 1970s, put it last week, “You have this crumbling public infrastructure, and now the Internet has made it possible to essentially skim the cream.”

There are other ways though. Nick Grossman over at Union Square Ventures favors a more modernized regulatory approach, which is permissive upfront in exchange for transparency and access to data. He has written an entire white paper about it here.

Unfortunately, these companies don’t do this. In San Francisco, both Lyft and Uber don’t share data with the city that would help it understand whether trips are merely substituting for MUNI or BART rides instead of replacing additional car traffic. Airbnb also doesn’t share data with the city, so the planning department has to resort to scraping the company’s website and using forms that are self-reported by hosts once a year.

Because of this, the regulatory process devolves into a game of brinksmanship around rigid caps and controls, which is what we all saw this week.

[Simon_Jester]

Been away, but do have more given the recent episode in New York City regarding Uber. I'm not really sure what NYC is trying to accomplish here. Traffic congestion? By people that are using their personal vehicles that are already on the road already?

Thing is, a large fraction of the Uber drivers are NOT people who would be on the road already anyway. They are, de facto, acting as taxi drivers- they get into their car and drive people around, as a job that they work for some number of hours a day.

If there weren't people willing to do this, Uber wouldn't be competitive with taxi services because there wouldn't always be someone willing to pick you up on short notice and drive you to your destination.

That's the thing about this alleged "ride sharing" paradigm. It's not "ride sharing," not the equivalent of carpooling. It is, in practice, just a different kind of marketplace in which to buy rides.

In perfectly fine with reasonable regulations, I am not fine with Government having a need to have control over things, nor am I fine with people trying to apply old legal systems to new economies and paradigms.

http://techcrunch.com/2015/07/22/uber-a ... t=FaceBook

Thing is, you haven't invalidated anything de Blasio said.

He correctly points out that this exact problem has occurred before, with tens of thousands of desperate-hopeful taxi drivers congesting the streets, resulting in a situation where traffic slowed to a crawl and the individual drivers were barely making enough to stay alive.

Uber having a cell phone app to let you call a cab doesn't do anything significant to change that dynamic.

The streets of downtown New York aren't that much bigger, wider, or more open than they were eighty years ago- they can't be unless you start tearing down the buildings. If the streets don't have more capacity, then there has to be some mechanism in play to limit the number of vehicles driving around the streets at any one time. And anything that causes a large number of people to shift away from the city's mass transit networks and onto individual cars will cause more congestion on the surface streets of the city.

Again, this is a basic, practical problem faced by EVERY large, extensively built-up city in the world.

Uber is not a revolutionary solution to this problem. It's just a neat way that you can use a cell phone to call for what is, in effect, a taxi. Combined with a way to run a taxi company without using dispatchers and while relying heavily on part-time drivers.

Uber is a gimmick, not a solution. And it's a gimmick with a high stock value, which means lots of investors pressuring it to expand and make more profits. Until, as de Blasio says, "There is a world in which Uber is still making money while our traffic moves at five miles per hour.”

In other words, Uber (which creates a swarm of low-price part-time taxi drivers) has the potential to create literally the exact same "tragedy of the commons” faced during the Depression (a swarm of low-price part-time taxi drivers). Which was exactly the same situation that led to the introduction of the taxi medallion system.

Which is precisely what I've been saying all along: Uber is not new or unique. It does the same thing taxi services have done ever since the invention of the internal combustion engine, and for that matter before that. It just does it more efficiently. The increased efficiency is not enough to magically fix the problems caused by poorly regulated taxi services.

[Snip place where I ramble for a few paragraphs about analogies to OTHER industries where various advances in the state of the art, while significant, have not somehow allowed people in the industry to bypass basic physical limitations on the available resources and space that supports their industry and makes it possible.]

Now, to comment further...

But on the converse side, policy and laws have an unintended, and sometimes nasty, effect of sticking around for years or decades even as circumstances clearly change. It’s called the ratchet effect, and it’s much easier to ratchet in favor of limits than it is to push for growth.

For instance, New York City’s cap on medallions remained unchanged at 11,787 from the end of the Great Depression on through 1996, an imposed level of scarcity that has made medallion values skyrocket to north of $1 million each until Uber arrived. Those values enabled the taxi industry to be one of De Blasio’s sources of political donations, with hundreds of thousands of dollars in contributions.

One can easily argue that this means more medallions should be coined, or that there should be a better statutory process for making sure that the number of medallions increases to scale with the growing population of the city.

But that doesn't mean abolishing medallions is a good idea.

Nor does it mean that we should solve the problem by creating a secondary class of people who are totally not taxi drivers, they're "shmaxi shrivers" or whatever Uber calls them. Especially not if these "shmaxi shrivers" are magically immune to all the rules regulating the taxi drivers, along with most of the existing labor laws on the books for good measure.

I think we see the basic problem with this passage:

As John Markoff, who has covered Silicon Valley since the 1970s, put it last week, “You have this crumbling public infrastructure, and now the Internet has made it possible to essentially skim the cream.”

... In San Francisco, both Lyft and Uber don’t share data with the city that would help it... Airbnb also doesn’t share data with the city, so the planning department has to resort to scraping the company’s website and using forms that are self-reported by hosts once a year.

Because of this, the regulatory process devolves into a game of brinksmanship around rigid caps and controls, which is what we all saw this week.

Another one of those things that the Information Age hasn't changed is the need to have laws and governments to ensure that basic infrastructure continues to exist and that it remains practical to run high-quality businesses that allow us to maintain an equally high quality of life.

All the new networked, Internet-coordinated, data-based, computerized business models still rely on the same set of bricks and mortar everyone was using in the 1970s. If we refuse to accept a level of regulation and taxation that people willingly paid in the 1970s as part of the price of creating that infrastructure... the infrastructure will cease to exist, and our cities will continue to decay.

Information technology won't change that.