Comments on Taxi Commission proposed own Uber-style "surge pricing" - Greater Greater Washington

Comment by neutrino

Sun, 07 Oct 2012 18:04:12 EDT

Why on earth does Uber get such a free ride from the city? Either regulate it or don't regulate taxis (I support the former).

Comment by M!Lk

Sun, 07 Oct 2012 01:48:24 EDT

...capital bikeshare.

Comment by WRD

Thu, 04 Oct 2012 23:12:53 EDT

This story helps illustrate why I am much less inclined to trust DCTC regulations (or any "small" state/local regulations, for that matter).

Generally, a Federal department must propose their regulations in a public notice. The notice must meet clarity and specificity criteria and must justify the government's proposed rule. If the justification is missing or otherwise deficient, the rule can be overturned in court. For example, the Department of Education proposed certain repayment percentages that for-profit graduates needed to hit in order for the colleges order to maintain eligibility for federal student loans. The rule was tossed out because:

If the Department had chosen to disqualify the bottom ten percent of programs, or the bottom half, it would have offered the same rationale: the rate chosen disqualified the percentage of programs that it was intended to disqualify, and to have disqualified fewer would have made the test too lenient while disqualifying more would have made the requirement too stringent. This is not reasoned decisionmaking.

This is exactly what the DCTC did. Why is the surcharge one dollar? Why not two dollars, fifty cents, or five dollars? Did the Commission have any reason for selecting a dollar? Did they have any evidence a surcharge was necessary or preferable to other alternatives? No. DCTC proposed a dollar for absolutely no justifiable reason.

The notice-and-comment system has serious flaws (it's highly legalistic, extremely complicated, expensive, volunerable to regulatory capture, and slow, to name a few drawbacks). However, the core reasons behind the system are sound. Most regulations are generally better because of it. I have no faith in DCTC's ability produce any good regulation except by chance alone.

Comment by renegade09

Thu, 04 Oct 2012 19:58:59 EDT

@Fall Church,
In principle you can choose not to use cabs, but for many DC residents e.g. the disabled, those who can't afford a personal vehicle, taxis play an essential transportation service. Hence they are regulated as an essential service, as is the case for electricity provision. Now, as to whether the regulation is effective...

Comment by Falls Church

Thu, 04 Oct 2012 19:39:13 EDT

When Uber does surge pricing, you have a choice, you can choose not to use Uber. With cabs, you have to pay the going rate.

Actually, you can choose to not ride cabs as well.

Comment by renegade09

Thu, 04 Oct 2012 18:09:48 EDT

@MLD When Uber does surge pricing, you have a choice, you can choose not to use Uber. With cabs, you have to pay the going rate. As for airport surcharges, I don't understand why we should have to pay them. It just seems like a rent-seeking monopoly to me.

Comment by Falls Church

Thu, 04 Oct 2012 18:06:49 EDT

Are drivers going to say "ehh, I don't like the fact that I will basically be guaranteed a fare, plus I'll be compensated for the extra time it takes to be in traffic. So no, I'm not going to drive my taxi today."

That's the crux of the issue. Are there taxi drivers out there that would be idle during the playoffs without the surcharge? Does the surcharge effectively increase supply by motivating available drivers to work? Even with a guaranteed fare, I suspect that at any given time (especially late in the evening when a game ends), there are drivers (and cars) not working who could be working. But, we don't really know because DCTC doesn't track "taxis on the road" like Uber does.

I suspect if DCTC followed MLD's below idea, there would be an increase in supply:

Also, the comparison to Uber -- if they can do it why can't DCTC? -- seems reasonable at first. But, otoh, Uber is an entirely private outfit which gives it more flexibility. The standard taxi service is sort of a quasi-public utility with regulated rates, and thus, should operate somewhat in the public interest.

That said, we do allow other regulated utilities to use peak demand pricing. For example, electric companies can charge more during peak periods. Then again, that mainly curtails demand during periods of limited supply, and doesn't directly increase supply.

I think the biggest problem with charging more for "special events" is that most people don't know when it's a special event. So, it's way too easy for a dishonest driver to take advantage of unsuspecting tourists, etc. and tell them at the end of their trip, "oh, it's a special event, so you owe $3 extra." Suddenly, every Nats game, not just playoffs, become a "special event" if you're an unsuspecting passenger.

Comment by MLD

Thu, 04 Oct 2012 17:30:22 EDT

I guess I could understand some kind of surcharge for picking people up AT the stadium during/after a game - that would be an incentive for more cabs to go to the stadium looking for customers. It would be similar to the airport charge. That said, a dollar per passenger is just silly, there's no reason to charge more people more money, the price to operate the cab is the same whether you have 1 passenger or 4.

Without a surcharge a subset of drivers who might otherwise have gone to the ballpark will decide to try to fill in the gaps in other areas vacated by drivers going to the ballpark.

I do find it funny that we (and I include myself) react with this outrage when the cabs decide to implement surge pricing, but when Uber does it, not remotely as transparently I might add, "hey, that's business!"

Comment by Jimmy

Thu, 04 Oct 2012 17:17:00 EDT

This was an attempted money grab, plain and simple. There's not any economic justification for it. Time-and-distance metering ensures that cab drivers are already compensated for sitting in traffic. Plus, there's nothing that beats a line of post-event customers, waiting in a single location. Except maybe an event that's broadcast on the radio so you can listen from the cab and only show up right as demand peaks!

Comment by renegade09

Thu, 04 Oct 2012 15:55:01 EDT

Kudos to Gray for vetoing this nonsense.

I bet taxi drivers across the city are going absolutely crazy about Uber coming in and charging 50% more than they do while not having to abide by all the DCTC regulations. I doubt they'll rest until they can charge the same as Uber.

Comment by no can do

Thu, 04 Oct 2012 14:31:46 EDT

Might only fly if there was a converse drop in prices where cab ridership is currently low or during off times (early morning pickup to the airport a bit cheaper because so few fares are awake? lots of people would buy in). Neighborhoods with less cab service would rally in support.

Comment by Tim

Thu, 04 Oct 2012 14:06:12 EDT

I don't think surge pricing makes sense in for Uber or taxis. Isn't the fact that it'd be extremely easy to find a fare enough of an incentive? Why do they even need an incentive? Are drivers going to say "ehh, I don't like the fact that I will basically be guaranteed a fare, plus I'll be compensated for the extra time it takes to be in traffic. So no, I'm not going to drive my taxi today."