By Don McCurdy
I read an interesting article about the “robo–taxi” market. Guestimates are that the “robo–taxi” market could be worth $2 trillion in 2030. The number is reported to include, tires, electricity, and a host of other industry services and products.
You have to know that a pie that big is going to have to have the government wet their beaks at various levels. Maybe a scenario where the old medallions for cars with drivers are phased out and new medallions for “robe–taxis” are sold by various jurisdictions.
No mention of medallions was mentioned in the article or what’s going to happen to the “newest New Yorkers” who used to ferry unsuspecting tourists to wherever the driver translated as their destination.
The other thing that I found missing from the article was one of the reasons that would make it necessary to have only one third the number of “taxis” in New York City. They noted route optimization, network size, utilization rates, margins and other issues. However, they failed to mention that if the companies owned the vehicles, not renting them to drivers or as Uber driver owned vehicles, it would behoove the companies to optimize the number of vehicles to what was absolutely necessary to provide the service.
What does all that mean, exactly? Well, it means that nobody is worried enough about what the current drivers are earning to even attempt to optimize the number of vehicles necessary. They’d rather have a few thousand extra of the poor suckers out driving for starvation wages now while companies assure that drivers have no future in the industry. See ya, wouldn’t wanna be ya.
Articles bemoaning the death of the taxicab industry in New York City discuss various issues related to the fall of the once great investment, the NYC taxicab medallion.
The article noted that Uber and Lyft were not the biggest enemy of the taxicab industry, but the surge in the price of medallions was to blame. They called the article “prize winning” in which the paper found the greatest enemy to the taxicab industry was the usual predatory lending suspects “who may end up in jail” and “government officials who turned a blind eye.”
Excuse me? Turned a blind eye? The government of New York City sold a piece of tin that they claimed would give exclusive rights to on demand taxicab service. Not only did the city rake in millions from these pieces of value plummeting junk but then the city failed to protect the exclusive rights of their garbage.
Clearly the medallion/Uber fiasco is one that should end up with some people in jail, but I would be looking for who bribed who with what lobbyist. Regardless, they put the blame on the bank story which is as old as the 2008 real estate fiasco, with the same disregard for the government’s involvement in promoting the failure as well.
Had the city maintained the exclusive rights of on demand service the medallion implied we wouldn’t be discussing predatory lending. Savings and loans and the industry favorite Medallion Financial have hardly come away unscathed from the failure of the city to defend the value of the product they sold. The good news is that there are enough liars in the media to gloss over whatever doesn’t fit the narrative.
The Uber IPO brought out the Uber articles this month with a veritable bumper crop of pro and con pieces. While some have Uber as the daring young company that’s growing by leaps and bounds others have Uber as devil master of the poor immigrant slave they have as drivers.
While initially Uber appeared to be elevating the taxi industry with nicer cars, driver ratings and credit car payments, their cuts in the driver’s percentage has sent many former taxicab industry professional drivers on to greener pastures.
When you pay slave wages you get the bottom of the driver barrel. Uber is growing rapidly in a variety of areas and that would seem to be the beacon of hope for investors, because their FHV financial performance just isn’t there.
While the news articles abound about Uber Air, Uber Eats and Uber’s various other exciting adventures their core business seems to be cratering. It simply doesn’t appear that their taxi systems are more efficient than the taxicabs they bested, with billions in losses to support their efforts.
No doubt the drone delivery of Big Macs will turn out to be the cash cow they’re looking for. Are they putting quality product on the street? “Time will tell who has failed and whose been left behind.”
Reports are that Uber drivers have discovered a way to get surge pricing by manipulating the app. Referred to as the “Surge Club”, drivers have banded together to turn off the app at the same time creating an artificial shortage which leads to surge pricing.
According to the report, Uber downplayed the scenario and said that they had taken steps to correct the problem. While Uber said the problem was local, the report said that the practice was common and “widespread.”
Apparently, drivers aren’t pleased with the newest pricing schedules. Their drivers are also avoiding short trips, a staple of taxicab driver behavior. The race to the bottom is on!
As a young taxicab driver, in the days of radio dispatch, I would occasionally get a young boy traveling from an exclusive elementary school. No big deal, the school knew he rode in a cab, the parents had a voucher account that was all handled at the company base of operations.
Routinely, we carried kids from a local Episcopal high school out on weekends, delivered their pizzas and a host of other less than exciting trips. Now, it’s common practice for companies to refuse underage riders.
Uber drivers complain that the company has a policy against carrying children, but drivers gets punished if they refuse a trip. Sounds a little like plausible deniability. Probably wouldn’t work in a lawsuit, but it looks good on paper.
So, what has changed? Is it okay to lie if your cause is good? Is it okay for grown men to marry eight year old girls if it’s their culture? Is it okay for men to compete in women’s sports? Is it okay for the FBI to spy on political foes? Not only can we not let our kids ride an Uber alone we get arrested for child endangerment if we let them walk to the park alone.
Every day federal, state and local governments are more in our personal lives than ever before and it’s all getting worse. Are we looking to the government to solve the problems they created? We’d better wake up soon, Los Angeles is starting to look a lot like Caracas.
If you have any comments regarding this or any of my articles please feel free to contact me at: don@mcacres.com. – dmc
