Second, this portion of the proposal:
> Replace the current taxi medallion system with a registration process that would require all drivers to register with the city clerk's office and provide proof of commercial insurance.
This article does not make it clear if the insurance Uber provides by default for UberX drivers would count here, or if drivers would need their own commercial insurance policy.
If UberX's insurance does not count, then this move would not introduce significant ridesharing, and the only benefit to the policy change would be the elimination of the medallion system.
Do not read me wrong, that is a wonderfully good thing, as regulated limits to supply legally enforce monopoly pricing. I read the primary benefit of UberX and similar services in the massive increase in marginal transactions facilitated, rather than the relatively simple task of acting as a modern taxi dispatcher.
Again, this is all conditional on the proposal passing, and the commercial insurance requirement excluding UberX insurance for casual ride-sharers.
Remember this only works if there's an "arbitrarily large" number of other drivers competing for the same fare. As always, deregulation only works if the markets being deregulated can become healthy and stay that way long term.
Given that personal automobiles are a large sunk cost that many people have incurred, being able to generate marginal income through ride-sharing seems like it needs a lot of active barriers to entry (like restrictive regulations favoring incumbent taxi services) to really limit the supply of drivers.
It's really expensive to drive for a living, especially in a nice car. Obviously you can make a ton of money if your parents bought your car and pay for your repairs, if you're not paying for commercial insurance, and if your main competition faces strict regulations that you've cleverly sidestepped.
To this day Uber releases numbers that don't account for wear and tear on your car, anybody who's ever delivered pizzas will tell you that changes the economics of it drastically.[2]
There are also reasons not leave a public good like transportation in the hands of people looking to "generate marginal income".
But the real joke is Uber's brought in about $5 billion in funding in the past five years, their recent valuation came in at over $41 billion[0] and there's still this narrative of Uber being the little guy out there fighting big government. It's a real underdog story!
They're simultaneously taking on "6,300 companies operating 171,000 taxicabs. More than 80% of these companies operate less than 50 vehicles"[1] in America alone. Think about that, they're poised to put about 3,000 small business under in the coming years, but they're out there for the little guy. They're taking the market over and if they have their way it'll go from regulated oligopoly to unregulated oligopoly with them at the top. It's an absolutely huge power play, and like every rational business they're fighting for whatever monopoly power they can get:
> There’s not a lot of earth-shattering IP in the ride-sharing space, but Uber seems to be making a play to own it, having submitted 11 patents that cover every major aspect of its business model. If granted, it could find itself with a technical monopoly not only in ride-sharing but other businesses based on its processes, like general delivery (again, more reason for those rich investors to be excited, right?)[0]
Forgive my rant, Uber's marketing pisses me off. They're not some benign force trying to help people get luxury rides to the airport, they're a rational business making rational business decisions.
[0] - http://www.forbes.com/sites/jonathansalembaskin/2014/12/05/t... [1] - http://www.tlpa.org/about/taxicab.cfm [2] - http://www.washingtonpost.com/blogs/the-switch/wp/2015/01/22... bonus link: http://www.quora.com/How-much-does-an-Uber-driver-make-1
That being said, I don't really disagree with most of what you have to say, though I do disagree with your negativity.
It is expensive to drive for a living - so expensive, in fact, that it was not a living until monopoly pricing was forced by government regulation.
The excess capacity of vehicles owned for personal transportation is huge. I don't want to repeat myself, so I'll link to another thread discussing Uber (and friends) where I participated that makes my position very clear[0].
I do not view Uber as an underdog. I agree with you that they are a rational business pursuing their profit. I also believe that in pursuit of their profit they will provide a great amount of value to consumers, and to ride-sharers who can defray some portion of their cost of ownership of a personal vehicle. The point is not to make a living, but to defray costs. The historic trend of jitney services (a combination of ride-sharing and public transit in widespread practice before regulation - history in linked thread) was of a high turnover driver base, with many performing relatively few trips, and some few working "full time" for a short time frame. This is the model that Uber (along with its friends) improves upon.
While I do not debate the narrative you have presented as common about Uber (and friends), I have not made arguments that follow it. It is a valid point that does not apply to the discussion I have engaged in. I view as a net positive the dissolution of all 3000 firms you have referenced if Uber (and friends) can provide an analogous service more desirable to consumers and at a lower cost (I do not deny the transitional pain - note I said net positive, not absolute). We can certainly disagree on this point and have a discussion about the merits of industries being displaced and altered with technological and regulatory change, if that is what you'd like.
Even if Uber manages to acquire patent protection over every aspect of its business model and on the terms they have applied for those patents, this is still a superior situation to the stagnant monopoly pricing that has been enforced by medallion systems for nigh on a century. Patents will expire before another century has passed.
That being said, the fact that there are already multiple players in the market for ride-sharing apps indicates that the ideas are, while novel also rather obvious. I would be surprised if they managed to acquire patents that remove their competitors from the market completely.
I agree that Uber is not a benign force trying to help people get luxury rides to the airport. I also agree that they are a rational business making rational business decisions. The way I read the situation, though, is that they are eliminating significant deadweight loss that is a direct result of the status quo they are challenging. They are providing significant competition in an industry which has seen consumer-harming regulation for a century. Forgive me for not being upset that a company pursuing its own self interest is also doing good as a side-effect.
