My overly simplistic theory on why everything turns into a race-to-the-bottom is that cost is easily measurable and all the other things that Hart mentions, while important, are not easy to measure.
> all the other things that Hart mentions, while important, are not easy to measure
Some can be easily measured but would require significantly more regulation/data gathering; for example, calculating on time arrival and how optimal the route chosen was. Others would require publicizing data that some stakeholders might be resistant to reveal, such as the number of vehicle safety infractions they've accumulated in the past 90 days.
I'm sure there are some, but I think most people can afford to care about their safety. People who cannot are probably using mass transit and not taxis, since that is a very high cost method of transportation.
I think most people really believe they are all the same (and they might be right) and aren't willing to pay for a hypothetical benefit.
When you are in a commodities market only price matters.
The article also mentions a series of issues with traditionally taxi.
> Furthermore there are some taxis who will cut costs by not providing a good service. This may be by promising to arrive at a certain time but then regularly turning up late. Sometimes late enough for you to miss your flight or your train at the station. They may arrive looking scruffy, unshaven or badly dressed. They may take you on a longer route than you expected and hike the fares up that way.
All these were pretty much fixed by Uber. At a lower price than legacy taxi operators.
Unshaven drivers? I can't help but read this as a dogwhistle to people who don't like regular taxis because they're often driven by immigrants with facial hair.
Incidentally I happen to believe uber's initial rise to popularity exploited this as well. Lots of people talking about how great it was that uber's drivers were 'just regular guys', as if other taxi drivers are in some way 'irregular.' The only difference I ever saw was the relative proportion of immigrant drivers (a gap which, to Uber's credit, narrowed a lot over the subsequent years.)
In my limited experience, taxis drivers know the routes and where to go. It's obvious they drive a lot, but they often drive aggresively. Uber drivers on the other hand are safer drivers, but I find they never listen to the GPS and I'm always reminding them of the upcoming highway exit they are about to miss.
There was a brief period post-Uber revolution where I had become accustomed to the Uber experience but my local airport would not allow them. So I took a taxi home from the airport. The tax driver had his wife on speakerphone the entire ride. They weren't even really talking, she was just on in the background, with an occasional sound/remark. The driver also made me provide step by step instructions. It was not sufficient for me to give him the address and let him navigate there using his favorite gps app.
Note that several years ago, there was an analysis of Uber drivers (by Uber's own economist) that said that one of the reasons that the money made by male drivers was greater than that of female drivers was due to male drivers driving faster and more aggressively. There are economic reasons for commercial drivers to drive aggressively.
As for me, as a motorcyclist, I've long noticed that taxis, and other commercial vehicles, often behave as if they believe other vehicles will get out of their way. Which they usually do.
I agree that it was a dog whistle, less sure about the “just regular guys” part of Uber and Lyft. One of the reasons I used the services when they came out was that my driver was likely to be a local who generally knew where things were, but I wouldn’t have to suffer the abuse of regular taxis (try going to Oakland or the sunset at night).
As the demographics changed most drivers are more often than not immigrants coming from as far away as Tracy and Sacramento with less local knowledge and potentially a bit of a language barrier, and they’ll often refuse rides just like the pre ride share taxis. I don’t care at all about the national origin of my driver, but it does get frustrating having a driver with little sense of where they’re going and a limited ability to communicate the best route. Taxis at least tended to know their way around if they didn’t refuse to drive me.
Once upon a time, years ago, Austin tried to improve the appearances of its taxi drivers. I can't remember the details, but one anecdote comes to mind: one driver always wore a t-shirt and shorts; when one set got too badly soiled (over, say, a week), he stopped at a garage sale to buy a new pair, threw the old ones away, and kept driving.
I can't speak to the writer's opinion, but there are plenty of us who prefer drivers who speak our language fluently, follow hyenic norms, and follow a dress code that is workplace appropriate. You do not need to be an immigrant to be deficient of these norms. In fact, as far as personal personnel anecdotes go, I do not see more inappropriate attire or a lack of hygiene from them compared to anyone else in other service industries.
When I lived in a smaller city in a different state, a large percent of the taxi drivers were from a specific country and did not know English very well. The details of a taxi trip are communicated orally, so this was quite inconvenient. A lack of hygiene and clean clothes isn't a deal breaker or anything, but it certainly feels out of place in a service with an expected tip. (I think the hygiene/dress issue is more based on the lack of standards in the taxi companies, especially when they have a monopoly on the service--even the cars were unkempt.)
I'm now in Florida with the option to Uber. I never have a problem with non-English speaking Uber drivers. 99% of the time, everything material is communicated through the app, 1% of the time, we have fun trying to communicate whatever small detail needs to be discussed.
TLDR: No idea if the writer is being nationalistic, but I feel the taxi industry I experienced was sub-standard and the workers were actually less hygienic, while Uber doesn't have that problem and makes it easier to work with those who do not speak your preferred language.
> When you are in a commodities market only price matters.
They are not selling into a commodities market because there has always been clear differentiation between product, this is not reductionist "anything to get me to heathrow on time" it is the variant between price conscious and service quality conscious purchase
from the 1980s
* some people won't use minicabs in london
* some people only use minicabs in london
from the present day
* some people refuse to use Uber and Lyft
* some people want to use a black cab
* some people want to use a limo
* some people want to use a known driver
Reliable taxi services are only commodities in a few large, rich, well-regulated places (and there are plenty of large and rich places where they're not, to this day!)
I currently live in one of the wealthier western european countries, and when I need to go to/from an airport, I have a particular guy I call. He'll usually in turn call someone else in his network of drivers, and someone impeccably professional (maybe with a beard, but always in a suit) will show up in a new E-class (or better) with perfect reliability. There's never any fuss, the price is fixed beforehand - never surge pricing - and at about 50% more than the cheapest possible non-refundable pre-paid shuttle service, I consider it well worth the cost. Any random taxi here, by contrast, will be a ripoff at best and frequently unreliable.
Almost* everywhere I've lived I've sought out and patronized "a guy" like this. In some (not rich, not western) places it's been a solo operator with his own car. In others maybe a bit more professionalism in terms of having a business name and business cards (i.e. a car service, but not a big name one). I'll take "a guy" over Uber or (god forbid) the local taxi mafia every time.
Commodity taxis are shit. Repeat business builds trust.
*- I never found "a guy" in Seattle. Fuck Orange Cab and STITA. And for plenty of other reasons, fuck Uber.
> The fact of the matter is that there is a set minimum cost to doing business in the taxi trade. This cost includes such items as hourly rates for drivers, servicing costs for vehicles, insurance, licence fees etc.
I think the "license fees" for taxis has evolved [1] into a suboptimal market system that is difficult to unwind:
> The medallion system is a government-created intentional constraint on the supply of taxicabs, and since historically cities have increased the number of medallions much more slowly than the growth in demand for taxis, medallions have generally been considered a great investment; though recently the increased supply of cars for hire created by ridesharing companies has been eroding the value of medallions.
> medallions have generally been considered a great investment;
I'd put a citation needed on that.
There's nothing that keep a city from doubling the number of medallions available, other than some shady lobbying groups. There's a reason most banks shy away from these assets (and those who touch is consider them extremely volatile assets).
Maybe they shy away now, but I remember reading that banks used to view them as valid collateral for loans. From a 2019 NYT article (open a new browser container):
>They said some drivers were happy to use climbing medallion values as collateral to take out cash, and that those who sold their medallions at the height of the market made money.
>The lenders said they believed medallion values would keep increasing, as they almost always had. No one, they said, could have predicted Uber and Lyft would emerge to undercut the business.
I recall an article in the nyt[0] about the very sad outcomes related to this market.
Government regulation creates a massive synthetic asset. A market appears around the asset. Predatory subprime lending to people who don't understand the risk. The asset price bursts, a bunch of poor taxi drivers are left holding the bag, often not understanding their rights and liabilities. Not to mention the thugs lenders have hired to recover the sketchy debts.
Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants.
Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
Yeah, I think the capital investment situation has certainly improved greatly.
The labor situation is still very concerning to me. I'm sure it was awful even before uber, but there's a bit of "the devil you know" vs "the devil that will exploit you in a new and terrifying way"
The issue is: The qualifications needed are basically to be 18 and own a valid driver's license.
The labor pool is basically infinite. So naturally offer and demand will dominates the market and an equilibrium will be reached where it's barely profitable to drive.
Cities tried to set minimum prices for rides, which in turn reduced the amount of rides so an other equilibrium point was achieved.
Meta: This ... actually works pretty well as an analysis of the tradeoffs in using the cheapest service. But, it's also a self-serving statement (an ad in all put positioning) from the very provider claiming to have a good reason to charge you more, and so it feels too close to spam to put on HN, you know?
The points they make are interesting. Imagine if Uber/Lyft/your-preferred-method-of-transportation showed you those particular details for that trip i.e. number of hours driven preceding this trip, vehicle condition, etc. Yes, a lot of riders no doubt consider the trip to be a commodity such that only the lowest price matters, but some people did/do pick Lyft over Uber when Uber had the better price for reasons other than price.
Woah. Didn't expect to see my local town appear on HN today. One thing they don't talk about is the customer service. I find Uber drivers are typically way more friendly and accommodating than the local firms. Not specifically Hart taxis, but one of their competitors in the area - Rushmoor Taxis - have been atrocious. Drivers making racist comments about brown people - their co-workers, drivers huffing and complaining bitterly if I dare use a debit card to pay, driver not even turning up and claiming it's my fault I "didn't see them" when I am standing out in the open. Our local cab firms need to up their game. It's not just about price.
It sounds nice in principle. But often low quality services will lie about being high quality services, and there's not much recourse once you've paid.
Thus I have found myself participating in the race to the bottom, not because I'm per se unwilling to pay for quality, but because I am required to trust that the quality difference exists, while the money saved is certain.
> Suppose buyers cannot distinguish between a high-quality car (a "peach") and a "lemon". Then they are only willing to pay a fixed price for a car that averages the value of a "peach" and "lemon" together (pavg). But sellers know whether they hold a peach or a lemon. Given the fixed price at which buyers will buy, sellers will sell only when they hold "lemons" and they will leave the market when they hold "peaches". Eventually, as enough sellers of "peaches" leave the market, the average willingness-to-pay of buyers will decrease (since the average quality of cars on the market decreased), leading to even more sellers of high-quality cars to leave the market through a positive feedback loop. Thus the uninformed buyer's price creates an adverse selection problem that drives the high-quality cars from the market. Adverse selection is a market mechanism that can lead to a market collapse.
Hart Taxis boasts higher driving safety, but what are the statistics for being involved in a road accident with a taxi really like? If the odds of an accident are already minuscule with the cheap taxi services, and only marginally more minuscule with Hart Taxis, then I imagine many passengers would go with the £15 cheaper option.
With regard to their drivers earning a "living wage", I would rather let the workers themselves speak about that – you can’t really trust anything an employer says here unless it has been vetted through collective bargaining.
- Smart drivers who have been working a maximum of 12 hours in a single shift and a maximum of 6 shifts per week.
- Smart, washed and valeted cars
- Road legal vehicles with full service history.
- Vehicle tracking services so you can see where your driver is from when they accept your job to when they arrive.
- Text information detailing the make, colour and registration of the vehicle that will be picking you up.
- Meet and greet service at the airport where we monitor your incoming flight and only send the driver at the appropriate time.
- Bottled water on arrival at our airport jobs.
- Automated booking via our Oliviar booking system with the industry’s leading booking and despatch software
- Full E-receipt provided on completion of job, if required.
If I understand things correctly, then the only difference between this and Uber/Lyft is primarily item 1 (although I'm not sure why it matters that the driver is "smart"). Items 2 and the bottled water could probably be gotten through Uber Black which also costs more.
So it seems one pays a premium to help certain drivers earn a living wage, and support an ethical company; more cynically, to not feel like one is participating in Uber-style exploitation. I imagine that some in the effective altruism community[1] would consider this and other sorts of ethical consumption to be "ineffective", and would recommend people just donate the price difference to needier people, or to an organization better equipped to create structural change. But I'm not an effective altruist so I may be misrepresenting that perspective.
Some people don't realize that profits are not the same thing as revenue. Sometimes profits are negative for multiple years. sometimes they are great. If you don't jealously guard profits, you can be forced to let down a lot of people that depend on you when markets or competitors or regulations put pressure on your bottom line.
Uber Black is an even higher tier that I've only used once and don't really see the difference from Select unless it's a super long ride. However, the longer the ride, the larger the price differential.
99% of the Ubers/lyfts I've been in are trips to the airport - and most of those cars had worn out suspension, bald tires, or raw wheel bearings. Some even to the point where I wasn't sure the vehicle was going to get me where I was going. It doesn't help that in the midwest the roads are 3rd world quality.
The business model is flawed and I would rather use a company that maintains a vehicle fleet where a mechanic is involved and knows if a vehicle should not be on the road.
> Some even to the point where I wasn't sure the vehicle was going to get me where I was going. It doesn't help that in the midwest the roads are 3rd world quality.
I suspect you haven't taken an Auto/Tuk-tuk in Delhi/Mumbai/Bangkok. I've never experienced the same kind of fear with a driver-for-hire in North America.
47 comments
[ 5.1 ms ] story [ 80.1 ms ] threadSome can be easily measured but would require significantly more regulation/data gathering; for example, calculating on time arrival and how optimal the route chosen was. Others would require publicizing data that some stakeholders might be resistant to reveal, such as the number of vehicle safety infractions they've accumulated in the past 90 days.
I think most people really believe they are all the same (and they might be right) and aren't willing to pay for a hypothetical benefit.
When you are in a commodities market only price matters.
The article also mentions a series of issues with traditionally taxi.
> Furthermore there are some taxis who will cut costs by not providing a good service. This may be by promising to arrive at a certain time but then regularly turning up late. Sometimes late enough for you to miss your flight or your train at the station. They may arrive looking scruffy, unshaven or badly dressed. They may take you on a longer route than you expected and hike the fares up that way.
All these were pretty much fixed by Uber. At a lower price than legacy taxi operators.
Incidentally I happen to believe uber's initial rise to popularity exploited this as well. Lots of people talking about how great it was that uber's drivers were 'just regular guys', as if other taxi drivers are in some way 'irregular.' The only difference I ever saw was the relative proportion of immigrant drivers (a gap which, to Uber's credit, narrowed a lot over the subsequent years.)
Now that I read the sentence again, yes I can see it.
> Lots of people talking about how great it was that uber's drivers were 'just regular guys', as if other taxi drivers are in some way 'irregular.'
Sadly, I think they meant "not professional drivers". Pre-Uber taxis had an horrible reputation for bad service in a lot of metro areas.
As for me, as a motorcyclist, I've long noticed that taxis, and other commercial vehicles, often behave as if they believe other vehicles will get out of their way. Which they usually do.
As the demographics changed most drivers are more often than not immigrants coming from as far away as Tracy and Sacramento with less local knowledge and potentially a bit of a language barrier, and they’ll often refuse rides just like the pre ride share taxis. I don’t care at all about the national origin of my driver, but it does get frustrating having a driver with little sense of where they’re going and a limited ability to communicate the best route. Taxis at least tended to know their way around if they didn’t refuse to drive me.
When I lived in a smaller city in a different state, a large percent of the taxi drivers were from a specific country and did not know English very well. The details of a taxi trip are communicated orally, so this was quite inconvenient. A lack of hygiene and clean clothes isn't a deal breaker or anything, but it certainly feels out of place in a service with an expected tip. (I think the hygiene/dress issue is more based on the lack of standards in the taxi companies, especially when they have a monopoly on the service--even the cars were unkempt.)
I'm now in Florida with the option to Uber. I never have a problem with non-English speaking Uber drivers. 99% of the time, everything material is communicated through the app, 1% of the time, we have fun trying to communicate whatever small detail needs to be discussed.
TLDR: No idea if the writer is being nationalistic, but I feel the taxi industry I experienced was sub-standard and the workers were actually less hygienic, while Uber doesn't have that problem and makes it easier to work with those who do not speak your preferred language.
They are not selling into a commodities market because there has always been clear differentiation between product, this is not reductionist "anything to get me to heathrow on time" it is the variant between price conscious and service quality conscious purchase
from the 1980s
* some people won't use minicabs in london * some people only use minicabs in london
from the present day
* some people refuse to use Uber and Lyft * some people want to use a black cab * some people want to use a limo * some people want to use a known driver
I currently live in one of the wealthier western european countries, and when I need to go to/from an airport, I have a particular guy I call. He'll usually in turn call someone else in his network of drivers, and someone impeccably professional (maybe with a beard, but always in a suit) will show up in a new E-class (or better) with perfect reliability. There's never any fuss, the price is fixed beforehand - never surge pricing - and at about 50% more than the cheapest possible non-refundable pre-paid shuttle service, I consider it well worth the cost. Any random taxi here, by contrast, will be a ripoff at best and frequently unreliable.
Almost* everywhere I've lived I've sought out and patronized "a guy" like this. In some (not rich, not western) places it's been a solo operator with his own car. In others maybe a bit more professionalism in terms of having a business name and business cards (i.e. a car service, but not a big name one). I'll take "a guy" over Uber or (god forbid) the local taxi mafia every time.
Commodity taxis are shit. Repeat business builds trust.
*- I never found "a guy" in Seattle. Fuck Orange Cab and STITA. And for plenty of other reasons, fuck Uber.
I think the "license fees" for taxis has evolved [1] into a suboptimal market system that is difficult to unwind:
> The medallion system is a government-created intentional constraint on the supply of taxicabs, and since historically cities have increased the number of medallions much more slowly than the growth in demand for taxis, medallions have generally been considered a great investment; though recently the increased supply of cars for hire created by ridesharing companies has been eroding the value of medallions.
[1] https://en.wikipedia.org/wiki/Taxi_medallion
I'd put a citation needed on that.
There's nothing that keep a city from doubling the number of medallions available, other than some shady lobbying groups. There's a reason most banks shy away from these assets (and those who touch is consider them extremely volatile assets).
>They said some drivers were happy to use climbing medallion values as collateral to take out cash, and that those who sold their medallions at the height of the market made money.
>The lenders said they believed medallion values would keep increasing, as they almost always had. No one, they said, could have predicted Uber and Lyft would emerge to undercut the business.
https://www.nytimes.com/2019/05/19/nyregion/nyc-taxis-medall...
But I seriously doubt they treated them like real estate when pricing the risk on them.
Government regulation creates a massive synthetic asset. A market appears around the asset. Predatory subprime lending to people who don't understand the risk. The asset price bursts, a bunch of poor taxi drivers are left holding the bag, often not understanding their rights and liabilities. Not to mention the thugs lenders have hired to recover the sketchy debts.
[0] https://www.nytimes.com/2019/05/19/nyregion/nyc-taxis-medall...
Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
The labor situation is still very concerning to me. I'm sure it was awful even before uber, but there's a bit of "the devil you know" vs "the devil that will exploit you in a new and terrifying way"
The labor pool is basically infinite. So naturally offer and demand will dominates the market and an equilibrium will be reached where it's barely profitable to drive.
Cities tried to set minimum prices for rides, which in turn reduced the amount of rides so an other equilibrium point was achieved.
Thus I have found myself participating in the race to the bottom, not because I'm per se unwilling to pay for quality, but because I am required to trust that the quality difference exists, while the money saved is certain.
The same principle, only applied to selling cars:
> Suppose buyers cannot distinguish between a high-quality car (a "peach") and a "lemon". Then they are only willing to pay a fixed price for a car that averages the value of a "peach" and "lemon" together (pavg). But sellers know whether they hold a peach or a lemon. Given the fixed price at which buyers will buy, sellers will sell only when they hold "lemons" and they will leave the market when they hold "peaches". Eventually, as enough sellers of "peaches" leave the market, the average willingness-to-pay of buyers will decrease (since the average quality of cars on the market decreased), leading to even more sellers of high-quality cars to leave the market through a positive feedback loop. Thus the uninformed buyer's price creates an adverse selection problem that drives the high-quality cars from the market. Adverse selection is a market mechanism that can lead to a market collapse.
With regard to their drivers earning a "living wage", I would rather let the workers themselves speak about that – you can’t really trust anything an employer says here unless it has been vetted through collective bargaining.
- Smart drivers who have been working a maximum of 12 hours in a single shift and a maximum of 6 shifts per week.
- Smart, washed and valeted cars
- Road legal vehicles with full service history.
- Vehicle tracking services so you can see where your driver is from when they accept your job to when they arrive.
- Text information detailing the make, colour and registration of the vehicle that will be picking you up.
- Meet and greet service at the airport where we monitor your incoming flight and only send the driver at the appropriate time.
- Bottled water on arrival at our airport jobs.
- Automated booking via our Oliviar booking system with the industry’s leading booking and despatch software
- Full E-receipt provided on completion of job, if required.
If I understand things correctly, then the only difference between this and Uber/Lyft is primarily item 1 (although I'm not sure why it matters that the driver is "smart"). Items 2 and the bottled water could probably be gotten through Uber Black which also costs more.
So it seems one pays a premium to help certain drivers earn a living wage, and support an ethical company; more cynically, to not feel like one is participating in Uber-style exploitation. I imagine that some in the effective altruism community[1] would consider this and other sorts of ethical consumption to be "ineffective", and would recommend people just donate the price difference to needier people, or to an organization better equipped to create structural change. But I'm not an effective altruist so I may be misrepresenting that perspective.
[1] https://www.csmonitor.com/World/Making-a-difference/Change-A...
To be serious, it is a valid use in American English, but rare
Some people complain companies don't pay their workers enough.
Sometime these are the same people. They don't realize it.
Uber Black is an even higher tier that I've only used once and don't really see the difference from Select unless it's a super long ride. However, the longer the ride, the larger the price differential.
The business model is flawed and I would rather use a company that maintains a vehicle fleet where a mechanic is involved and knows if a vehicle should not be on the road.
I suspect you haven't taken an Auto/Tuk-tuk in Delhi/Mumbai/Bangkok. I've never experienced the same kind of fear with a driver-for-hire in North America.