| While the regulations were at one time created to keep shady players out of the industry, Taxi services nowdays are most certainly regulated for the sake of limiting competition. Consider that in Manhattan in the 1950s there were roughly 13,000 taxi medallions. Today there are still only 13,000 medallions available- they sell at auction for a million dollars a piece. The Taxi companies that own these medallions have gone to court many times to enforce the artificial scarcity that drives up the value of their golden geese. A taxi driver in NYC has to pay $80,000 a year over and above his insurance and operating costs just for the right to operate a cab: that money goes straight into the pockets of medallion owners who don't much of anything except own medallions- until a threat like Uber comes along, wherein it's time to deliver brown paper bags filled with bundles of unmarked bills until the problem is solved. Both the drivers and the consumers are getting shafted. NY is an extreme example, but the taxi industry works more or less same way in pretty much every city in the western world. It's not uncommon for incumbent businesses to hijack goodwill regulations as a way to stifle legitimate competition. Now Uber and app-based livery services do need to be regulated- but their service is a whole different paradigm from the traditional taxi industry. In California progressive legislation has been passed that places these services in a completely different category than tradition taxi companies, much to the dismay of those taxi companies. Uber is also expanding aggressively- their revenue has grown 20% per month over the past couple years, they started with 15 cars in 2009 and they are now valued at nearly 4 billion dollars, and operate in 60 countries. Every city they go into, they go into expecting a fight. They win some and they lose some. They were shut down in both Toronto and Vancouver. Uber is a fascinating company to watch- it's trench warfare everywhere they go- and they have mountains of venture capital backing them. |
The solution for Uber and the like isn't progressive regulation that puts them in a different category. Uber walks like a cab service and quacks like one, the only difference is a more modern method of hailing. Cities should deregulate their cab systems to increase supply, but categorize services like Uber within the same cab regime.
Also: the population of Manhattan is 25% smaller today than it was in 1950, so that means more medallions per person. Also, it has probably a lot more private cars.