Bravo, David.

by Arl Fan on Jan 14, 2012 1:11 pm • link • report

Agreed. Excellent work.

by Urbanette on Jan 14, 2012 2:46 pm • link • report

Fine op-ed. Thank you.

Commendably, D.C. does not impose barriers to entry into the taxicab industry like most counties and municipalities do.

In my personal opinion, we need to stop imposing economic regulation on for-hire vehicles.

It's O.K. to regulate their safety (brakes, tires, lights, horns, doors and so on), driver qualifications, insurance, payment of relevant taxes, vehicle emissions and the accuracy of the meters.

But why not let the taxicab owners themselves set prices?

Sweden removed all economic regulation of its taxicab industry back in 1990, and the results have been good.

by C P Zilliacus on Jan 14, 2012 3:53 pm • link • report

But why not let the taxicab owners themselves set prices?

Because the key element of a true taxi system (unlike what Uber is doing here) is to hail a cab on the street. It's not good from a transportation perspective to hail a cab and then try to negotiate rates. Instead, you should have an expectation on what the rates will be for any cab you hail off the street.

In short, the problem with a completely free market for taxi rates is that riders will never be able to operate with perfect information, which leads to an inefficient market.

Now, this doesn't speak to what the fares should be set at, but merely that the rates should be fairly standard and uniform for a certain type of trip.

Also, from some reading it seems like Sweden's taxi market hasn't actually been as efficient as you imply:

http://www.thelocal.se/16868/20090112/

by Alex B. on Jan 14, 2012 6:07 pm • link • report

@David, On what basis does he say they're operating illegally. One has always been able to arrange ahead of time to have a limo (or even taxi) from outside of DC come in to pick you up to bring you to the airport or some other destination outside of the District ... legally. How is this Uber any different? As long as they're not soliciting on the street, and the destination is outside of DC, I don't see how he can say they're illegal.

by Lance on Jan 14, 2012 9:46 pm • link • report

Alex B. wrote:

Because the key element of a true taxi system (unlike what Uber is doing here) is to hail a cab on the street. It's not good from a transportation perspective to hail a cab and then try to negotiate rates. Instead, you should have an expectation on what the rates will be for any cab you hail off the street.

To address this concern, the price for a "typical" trip is painted onto the outside of every taxicab. The length and duration of that "typical" trip is established by national regulation.

In short, the problem with a completely free market for taxi rates is that riders will never be able to operate with perfect information, which leads to an inefficient market.

I disagree. See above.

Now, this doesn't speak to what the fares should be set at, but merely that the rates should be fairly standard and uniform for a certain type of trip.

Reputable taxicab operators in Sweden have relatively similar rates, because the cost of labor, vehicle, fuel, insurance and tax (after all, this is Sweden) are relatively similar.

Also, from some reading it seems like Sweden's taxi market hasn't actually been as efficient as you imply:

http://www.thelocal.se/16868/20090112/

I also know how to use Google (though I've been reading The Local for many years).

From the article (emphasis added):

1. Only ride with companies you recognize, even if they’re not at the front of the taxi queue. It feels criminal not to take the first taxi in the queue, but that’s what Stockholmers do. (These Stockholm taxi companies meet the membership standards of the Taxi Association: Taxi Stockholm, Taxi Kurir, Taxi 020, Top Cab, Varmdö Taxi, Ekerö Taxi, Norrtälje Taxi, Roslags Taxi, Taxi Nynäs, Södertälje Taxi.

2. Some of the private cars look similar to the larger taxi companies – so check to see that the driver has a valid license and there is a “jämför” (comparison) price on the window to be sure. It should be around 230kr on the low end and 280kr on weekend/holidays.

What is described above is not especially different from the games that dishonest D.C. taxicab drivers played with out-of-town visitors unfamiliar with the old fare zone system.

by C P Zilliacus on Jan 14, 2012 10:08 pm • link • report

I don't like your cupcake analogy. You are comparing a product with a service, you regulate both differently A better comparison would be to relate the emergence of Uber with the current issues related to providing cupcakes by mobile vendors. This model allows mobile vendors to sell unlimited amounts of cupcakes as groceries, without paying restaurant or deli level sales tax, as they only pay $1500 in lieu of taxes annually. The real issue is the rapid changes that social media is creating that are enabling new business models that skirt existing regulations. The regulatory process is not nimble enough to accept and regulate these new, creative business models, hence the sting as a means to slow things down. Not the most productive process.

by Scott P on Jan 15, 2012 8:39 am • link • report

@Lance
On what basis does he say they're operating illegally. One has always been able to arrange ahead of time to have a limo (or even taxi) from outside of DC come in to pick you up to bring you to the airport or some other destination outside of the District ... legally. How is this Uber any different? As long as they're not soliciting on the street, and the destination is outside of DC, I don't see how he can say they're illegal.

Limos in DC are required by law to charge a flat rate for trips and give you the price beforehand. Uber doesn't do this - they charge a base fare + metered distance/time charge like a taxi. That's what's illegal about it.

It would appear the other cities Uber operates in do not have this limitation. Uber could maybe solve the problem by getting your address via your phone GPS, then having you input a destination address in the app, and telling you what the fare will be and just charging you that.

by MLD on Jan 15, 2012 9:04 am • link • report

A very cogent exposition of why there ought to more options available for consumers, the more the merrier!

We should remember that Ron Linton was installed by the Gray administration in response to Gray's campaign promise to cabbies to fire Linton's predecessor because he was consumer-friendly rather than in the pocket (literally --- remember the bribery case Leon Swain exposed) of the cabbie industry.

by M. Knull on Jan 15, 2012 9:23 am • link • report

MLD wrote:

Limos in DC are required by law to charge a flat rate for trips and give you the price beforehand. Uber doesn't do this - they charge a base fare + metered distance/time charge like a taxi. That's what's illegal about it.

I don't understand why this should be illegal.

But then I don't think government should be telling these businesses how much to charge.

It would appear the other cities Uber operates in do not have this limitation. Uber could maybe solve the problem by getting your address via your phone GPS, then having you input a destination address in the app, and telling you what the fare will be and just charging you that.

Speaking of GPS, I've often wondered why D.C. did not consider retaining the zone system (which at least some veteran D.C. hackers stated a preference for), which would have been relatively easy to do with meters using GPS.

by C P Zilliacus on Jan 15, 2012 11:46 am • link • report

The real issue is the rapid changes that social media is creating that are enabling new business models that skirt existing regulations. The regulatory process is not nimble enough to accept and regulate these new, creative business models, hence the sting as a means to slow things down.

If you were to regulate Uber, what regulations would you impose on them? What problem would those regulations address? And, are the problems you're solving critical enough to be worth stopping a useful service until government takes it sweet time figuring out how to regulate it?

To address this concern, the price for a "typical" trip is painted onto the outside of every taxicab. The length and duration of that "typical" trip is established by national regulation.

That might work if an entire country follows the same above standard and you don't have a ton of immigrants or tourists who are unfamiliar with local customs. But, I don't see how it could work if every city in the country does things differently (different typical trip lengths, different signage, some cities still have gov't set rates, etc.).

The important thing isn't whether gov't or the free market sets the rate. It's that it works in a fairly uniform manner throughout the country. That's a big reason why DC's old zone system was bad -- difficult to figure out for non-locals.

by Falls Church on Jan 15, 2012 12:07 pm • link • report

@Fallschurch-
"It's that it works in a fairly uniform manner throughout the country."

Why? Vive la difference! You could follow the same line of thinking down the path that says that chain restaurants are not only useful for 'standardizing' the experience for immigrants and tourists, but one should also make them mandatory.

by Kolohe on Jan 15, 2012 2:57 pm • link • report

@Kolohe

My impression is that taxis are a pretty utilitarian service and that customers value ease-of-use over variety. Generally, people are more interested in being adventurous with their food choices -- for example, eating Ethiopian which follows a different set of cultural norms like eating with your hands.

If there was going to be a truly significant difference in taxi cost (or some other advantage) by going non-standard, maybe it would be worth it. But, most people value ease-of-use over saving like 40 cents.

That said, there's certainly a market for differentiated car services, hence the reason Uber is a good idea. In that case, people are likely willing to spend time and effort figuring out how the service works (and occasionally mis-understanding and suffering consequences like a $500 bill) because it's a niche service that meets an unmet need.

I would say taxi service isn't like restaurants at-large but like a particular restaurant, say McDonalds. Sure, there's a little variation from one McDonalds to the next, but most people value and expect a standard product from anything called "McDonalds". I'd argue, people want a standard service from anything called a "Taxi".

by Falls Church on Jan 15, 2012 5:01 pm • link • report

Have any of you used Uber? I have - several times. And I love it. It is a completely different service, and frankly costs a lot more than a traditional taxi - and requires Town Car grade automobiles. I use it for specific business and social engagements I would not have used a taxi for anyway. I still use a regular taxi for simple trips.

I know the service might have some DC unique legality problems, but the arrogant passion that Linton is using in describing Uber, to me, is more troublesome because he could have started the conversation by saying - look we have some issues that we need to resolve, and we will see if they are resolvable. Instead, he is on the attack - I can only assume because he/the taxi lobby feels threatened. But since it is a completely different kind of service, I don't think he needs to be that way.

I love Uber! I will go down fighting on this one.

by EH on Jan 15, 2012 5:13 pm • link • report

Require meters. Let owners set rates. Rates must appear on outside of door in big letters. Give the passenger complete info just as they are making a decision.

by tour guide on Jan 15, 2012 8:11 pm • link • report

I can somewhat agree with the last comment from tour guide. I don't have a problem with services like Uber, I do think they meet an unfulfilled need. People know what they're getting, they know what it's going to cost them, and it's not like they just hailed a cab and were surprised by the double fare. I also don't know that we need totally standardized rates for taxi service, and a system like having the rates published on the side of the car would correct the information problem, to some extent. However, the problem really is what others have mentioned: hailing a cab on the street is problematic without standardized rates. When I stick my arm up seeking a ride, I don't want to have to go through 5 or 6 or more cabs before I find one with reasonable rates. And if I'm a tourist? Forget about it...how far am I going, am I going to get stuck in traffic, what are the typical rates for cabs? A free-market system leaves too many questions for the non-local and too much work for the local. Given that DC should be promoting our tourist trade, a non-standardized system is just too risky.

It would be different if cab companies used good technology. If I could load a few smartphone apps from various cab companies that showed me their rates and how long it would be before a cab could come get me, and reserve with a few touches, the system would work for locals. We could pair this with a standard fare system for cabs that choose to allow street hailing so that both locals and tourists have that option with predictability. However, I have had to give my cab driver directions to common locations far too many times to believe that any company is going to make the investment in this kind of technology when they can't even be bothered to equip their drivers with GPS, a MAP, or a good lesson in DC streets. Just a few days ago, I had to direct my cab driver on how to get on 395, when I live less than a mile from the closest access point, which is on one of the major roads in DC. It would have been one thing if he asked me what I thought the BEST way to get there was, seeing as it was rush hour and traffic considerations might come in to play; but the reality was he literally had no clue how to get from my house to 395, despite the pick-up being a call-out (Flyer, for full disclosure...I wonder how he GOT to my house?).

Look, I'm writing this post from Vietnam. While they have standard taxi rates and licensing and whatnot, there are many operators that flout the law and try to drum up business from non-locals. I had to dodge the "private operators" getting in my face at the airport asking "taxi? taxi?" from the moment I arrived. Those folks don't have meters and try to charge the foreigner 3-4x what a taxi ride should cost. Even our reputable taxi driver the other day, when asked to take us to a major tourist site, stopped by a roadside stand nearby the destination to try to get us to buy (probably fake) tickets to the attraction, because he would get a kickback from the dude selling the tickets, and be long gone before we got to the gate and our tickets were outed as fakes. This is not how business in America should work, and the only way to make it work well is standardized rates, for now. If better technology is adopted, where I can select my cab company from an app or something and know exactly what I'll be getting (in fares and wait time), then a less-regulated system might work. Bonus if we could have that information available on a screen system at places like airports and major tourist destinations so the tourists wouldn't get screwed (imagine going to the taxi area at Dulles and seeing a screen with "Acme Cab $75 to downtown 10 minute wait; XYZ cab $85 to downtown 2 minute wait;" etc.). Unless and until that happens, while hailing a cab is a matter of throwing your arm up and seeing who stops, a standardized fare system is the only efficient, fair system.

by Ms. D on Jan 16, 2012 9:50 am • link • report

@Ms. D

Exactly. The key element that the taxi plays in the transportation network (opposed to other for-hire vehicles) is the street hail. And for that to work, a user can't really comparison shop on rates just by throwing up their arm curbside. Painted rates on the door aren't good enough, frankly. If I hail a cab but don't like the rates, just turning them away and trying to get another one isn't an efficient transportation system.

by Alex B. on Jan 16, 2012 10:25 am • link • report

Taxis are a form of public transit. Everyone knows what they cost and what services they provide. There's really no point to having free-form rate-setting by individuals. If you want to do that, then what you want is a for hire service similar to Uber where prices are negotiated and rides arranged ahead of time, not in a transit-style manner of street-hailing.

Cabs which are hailed on the street are a form of public transit, albeit provided by private operators. Those who don't want to be part of this public transit system can simply operate a for-hire livery business that is not allowed to directly compete with the street-hail model.

by JustMe on Jan 16, 2012 10:36 am • link • report

The DC govt. has been destroying the taxi industry since Marion Barry wanted to force all the drivers to get fancy new cars. Fenty, who never knew anything he didn't want to force change on, eliminated the zone system. The zone system was fine, taxis were famous for courteous, friendly service at a very low cost, and they could carry multiple passengers, and environmentally very smart. Fenty couldn't leave anything alone, he said taxi drivers were abusing the zone system when an occasional unaware tourist was overcharged. Of course a competent Taxi commission with plain clothed inspectors, and real enforcement, takes care of that issue in a NORMAL city. Now Mayor Gray also can't leave anything alone and wants to force expensive medallions on the industry, handing over the whole business to big companies that can afford it, and screwing all the small operators. These are all rich govt. officials who like a sexual predator,,can't help themselves from screwing anyone they can. Rich busy bodies who wouldn't know what it is like to work your ass off 12 to 14 hours a day, send money back to the extended family in Pakistan and Nigeria, while struggling to make a living here in DC. The new "system" makes multiple fares impossible , so it is so wasteful and you cannot get a cab to stop as they all go by with one passenger. Even Councilman Tommy Wells cannot sleep through the night if he doesn't stick his big face into the lives of the taxi driver, he wakes up in the middle of the night in a sweat and worries" the cabs need to be painted the same color!". Why?
Who cares?? Fenty destroyed our streets with his thousands of miserably timed traffic lights, insipid stop signs and endless streetscape idiocy, annoying speed humps, congesting the entire city. It is a living nightmare to drive around this pig stye of a pathetic town thanks to these idiots in office, so
now they are destroying the taxis too.
The DC govt. needs to be put out of its misery as soon as possible, we must absolutely dump the city council entirely, we need to form a constituent assembly now. get rid of this council before it kills again!!!.

by Dan in Brookland on Jan 17, 2012 3:17 am • link • report

"when an occasional unaware tourist was overcharged."

ha. I love it. the whole comment is solid gold.

by Whoa_now on Jan 17, 2012 9:52 am • link • report

Yeah, Woah...like when I had to fight tooth and nail because if a taxi driver went one block out of their way taking me home it would be a 2-zone trip instead of a 1-zone trip, and when I told them to turn they would usually outright refuse at first. I only once had to tell a taxi driver who didn't make the turn that I was paying him the one zone fare and if he didn't like it he was free to call the police ON ME, but one shouldn't have to jump through such hoops (and know so much about some randomly defined system) to get a ride. Yeah, the zone system was GREAT!

by Ms. D on Jan 18, 2012 9:58 am • link • report

@Whoa_Now:

Your funny-bone must be impaired. This was the real comic gem:

...taxis were famous for courteous, friendly service at a very low cost...

Hey, "Dan In Brookland", how's this for a deal: we'll just implement the regulations, wholesale, from either MD or VA. You choose. Deal?

by oboe on Jan 18, 2012 10:06 am • link • report

handing over the whole business to big companies that can afford it, and screwing all the small operators.

One last thing: as a DC resident, voter, and taxpayer, I could not care less whether DC cab service is provided by big companies, or by small operators. I know this is very hard for some people to understand, given the way things have worked for many decades, but the purpose of DC government is not to provide a DC- taxpayer-funded jobs program for MD and VA residents.

We should burn down the entire taxicab status quo, and if that puts a lot of independent operators out of business, perhaps they can spend some time and money co-opting the taxicab regulatory bodies of their own states.

by oboe on Jan 18, 2012 10:09 am • link • report

Ok, really one last thing:

According to the NYT, DC's taxi fares ranked 25th of 28 major cities before the switch to meters (NYT was referencing taxifarefinder.com). It's now 11th of 32.

http://www.taxifarefinder.com/rates.php

Burn it down. Start from scratch.

by oboe on Jan 18, 2012 10:23 am • link • report

@oboe; well, say your thanks to the US Sentate.

by charlie on Jan 18, 2012 10:41 am • link • report

@oboe

Not sure where taxifarefinder got the idea that the mileage rate is $2.16. It's $1.50.

by MLD on Jan 18, 2012 10:58 am • link • report