• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Tragedy of the Uber Commons

Ganesh

Ganesh

DP Veteran
Joined
Jun 15, 2014
Messages
2,028
Reaction score
1,329
Gender
Undisclosed
Political Leaning
Undisclosed
There is a great deal of controversy over the new taxi service, Uber. Some see it as "creative destruction", sweeping away an over regulated and fossilized taxi industry with new technology and more liberal ideas about work and reward.

Others see them as cheats who are not playing by the rules, and merely seeking quick profit by circumventing rules long in place, designed to ensure safety, transparency, and at least a chance at a fair return for all.

I think it fair to say that if they haven't broken rules, they have stretched and skewed them, and rationalized their end run around regulation in dubious ways.

Is this a "Tragedy of the Commons" type of scenario? I'm sure millions have taken Uber, and found things satisfactory, and probably had a cheaper fare. But what are the broader implications? What's good for the goose is sometimes not good for the whole flock .

Adequate insurance coverage for Uber cars is disputed by some, they do not have safety inspections like conventional cabs, and employee vetting is minimal in relation to established norms. This may allow for cheaper fares, but in the case of accident or incident with a driver, would they then be worth it?

If we accept Uber as being a legitimate business entity, then what stops the next operator who wants to make a buck by cutting corners? If a precedent is set, then the next cost cutter would have less opposition. Older cars, less driver standards, etc, until we have a race to the bottom.

This from the University of Chicago:

"... a society committed to freedom and equality might not actually want to save such jobs. Ideally, the stunning productivity gains promised by new technologies like Uber could reduce society’s need for work that is deadening to the human spirit. But without far-reaching changes to our social safety net, doing so would render tens of millions destitute. I worry that such a crisis in the low-wage labor market is close on the horizon, and that society is unprepared to deal with it...."


What do you think?



https://lawreview.uchicago.edu/page/social-costs-uber
 
They are threatening to leave Austin TX because the 'progressive ' city council wants to finger print the drivers and make them collect a tax.
 
Why is it every single time a business model comes around that existing regulations aren't prepared for liberals act like it's the end of the world? I'm sorry, but the regulations we are talking about kept competitors out and effectively held in place a monopoly, so businesses like Uber coming around was a blessing.
 
Henrin said:
Why is it every single time a business model comes around that existing regulations aren't prepared for liberals act like it's the end of the world? I'm sorry, but the regulations we are talking about kept competitors out and effectively held in place a monopoly, so businesses like Uber coming around was a blessing.
Click to expand...

Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
 
JohnfrmClevelan said:
Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
Click to expand...

I agree with this. I do not like lyft or uber I don't use them at all when I travel.

the issue I have is that all uber drivers are independent contractors. so they are responsible for the maintainance and safety of their vehicles.
same goes with insurance. with a taxi cab service the insurance is under that service provider.

with uber it is hit or miss. if the person doesn't have the right coverage then the insurance company won't pay a bloody thing.
they will say that the driver was not covered for that usage and that is it.

uber itself has an insurance policy in case of accidents, but not sure if they will pay it.
they will probably throw it back on the driver.

which again makes their independent contract claim suspicious.
 
JohnfrmClevelan said:
Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
Click to expand...

You'd assume that was true but you're forgetting that it's government bureaucrats who are administering those regulations and they are far more interested in collecting the various license and other fees that regular taxi services and drivers are inundated with. They regulate primarily for the revenue.

On a regular basis, taxi users have complained about poorly maintained cars, drivers that won't take fares on short runs, even though required by regulation to do so, drivers who don't know the city they serve, drivers who never show up or show up late, etc. etc. etc. Uber, while not perfect, has filled a niche because the taxi service you seem to tout isn't serving the public in a sufficiently competent or cost effective manner. If they were, Uber wouldn't exist.
 
I've talked about this before in a similar thread but I love uber. As a service to use and as a business model in general that's going to shape the future.

Uber and lyft and airbnb are the heralds of the information economy. They do not provide goods. They sell information (or at least broker it between two parties). They give drivers information about where the passengers are, and the passengers information about where drivers are. Capitalism is a economic model built on scarcity, on supply and demand. Information is not scarce, and doesn't conform to normal supply and demand rules.

Like any new ventures into a new type of business model, the first few iterations of business usually fail. It takes a while for best practices to be found and to be discovered, and it takes a while for profit to be made. If the information/sharing economy does eventually catch on, I don't believe uber/lyft/airbnb will have a place in it, the same way that whilst AOL or Yahoo might have been pioneers of the internet in the 90's they're not really relevant anymore. Instead we are going to see open source technologies that are built and shared by the users (e.g. the drivers of uber got together and created a new non-profit uber app that did not take a % of driver fees - uber already recognizes this - https://uber.github.io/ - but it's current business models success menas I don't think it's a company likely to evolve).

Ultimately, I see these companies as the beginning of an economy where the people will own the means of production. Some of you might also know this as socialism. Along with the increased levels of automation reducing the amount of human labor needed worldwide in general, I think we're going to see a shift as abundance and ease of access to information quite literally evolves capitalism into socialism. That's not to say that capitalism will disappear completely, there will still be a need for traditional companies that provide goods and services, but we're already seeing some industries taken over by sharing, that numbers only going to increase as time goes on.

Whether government/society keeps up with those changes I don't know.
 
Last edited:
Henrin said:
Why is it every single time a business model comes around that existing regulations aren't prepared for liberals act like it's the end of the world? I'm sorry, but the regulations we are talking about kept competitors out and effectively held in place a monopoly, so businesses like Uber coming around was a blessing.
Click to expand...

What restricts newcomers in most jurisdictions in not monopoly, but a limitation of licenses. This can create some problems, but there is a good reason for it. Businesses that require little or no specialized skills, and no high technology, can have a tendency to multiply, especially in times of difficult employment. When this reaches a certain limit, then no one makes any money. If a certain city generally requires about 1000 taxis, then 1500 might be OK, with less income all around, 2000 would be a real problem, and 10,000 would be untenable, with people working for nickels and dimes, not keeping up cars and equipment, and drifting in and out of the business. From the individuals point of view, he or she is just trying to make a living. From the broader viewpoint of the industry, the pie can only be cut so many ways, until it falls apart. Hence, a restriction on new licenses.
 
JohnfrmClevelan said:
Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
Click to expand...

Yes indeed, and the worrying thing here is the ongoing shift of the economy towards what would have been considered third world conditions a few years ago: massive wealth disparity, low wages, poor labour laws, and a generalized insecurity among the working classes.
 
CanadaJohn said:
You'd assume that was true but you're forgetting that it's government bureaucrats who are administering those regulations and they are far more interested in collecting the various license and other fees that regular taxi services and drivers are inundated with. They regulate primarily for the revenue.

On a regular basis, taxi users have complained about poorly maintained cars, drivers that won't take fares on short runs, even though required by regulation to do so, drivers who don't know the city they serve, drivers who never show up or show up late, etc. etc. etc. Uber, while not perfect, has filled a niche because the taxi service you seem to tout isn't serving the public in a sufficiently competent or cost effective manner. If they were, Uber wouldn't exist.
Click to expand...

Absolute nonsense. Most taxi operators understand, and agree with such regulations as license restriction, vehicle inspections, uniform meter rates, etc., because without them, it would be a quick race to the bottom, with no one making any money once that destination was reached. Municipal and provincial fees in Canada amount to a minuscule proportion of industry costs, probably not even enough to cover administration and mailing costs.

As for complaints, yep, sure they are there. But how many complaints will we see in the future, if such new arrangements with less regulation, less responsibility, less commitment, less transparency, come to be the norm? If someone can get fired, and lose his livelihood for misconduct, how much more- or less- caring is a driver going to be when his gig is just pocket change, a side job with no commitment?
 
Last edited:
Nilly said:
I've talked about this before in a similar thread but I love uber. As a service to use and as a business model in general that's going to shape the future.

Uber and lyft and airbnb are the heralds of the information economy. They do not provide goods. They sell information (or at least broker it between two parties). They give drivers information about where the passengers are, and the passengers information about where drivers are. Capitalism is a economic model built on scarcity, on supply and demand. Information is not scarce, and doesn't conform to normal supply and demand rules.

Like any new ventures into a new type of business model, the first few iterations of business usually fail. It takes a while for best practices to be found and to be discovered, and it takes a while for profit to be made. If the information/sharing economy does eventually catch on, I don't believe uber/lyft/airbnb will have a place in it, the same way that whilst AOL or Yahoo might have been pioneers of the internet in the 90's they're not really relevant anymore. Instead we are going to see open source technologies that are built and shared by the users (e.g. the drivers of uber got together and created a new non-profit uber app that did not take a % of driver fees - uber already recognizes this - https://uber.github.io/ - but it's current business models success menas I don't think it's a company likely to evolve).

Ultimately, I see these companies as the beginning of an economy where the people will own the means of production. Some of you might also know this as socialism. Along with the increased levels of automation reducing the amount of human labor needed worldwide in general, I think we're going to see a shift as abundance and ease of access to information quite literally evolves capitalism into socialism. That's not to say that capitalism will disappear completely, there will still be a need for traditional companies that provide goods and services, but we're already seeing some industries taken over by sharing, that numbers only going to increase as time goes on.

Whether government/society keeps up with those changes I don't know.
Click to expand...

I do think it is possible something like Uber will prevail, and the industry will change in certain ways. But there are too many unanswered questions about both the immediate legal, safety, and insurance issues, and in the longer term, the effect of deregulating and downgrading the nature of work, eliminating standards, and transforming a middle class society into........what are we transitioning into?
 
Well i'm not sure that i consider uber an example of tragedy of the commons.

I guess i would think of tragedy of the commons applying more to things like traffic congestion.

There's definitely an aspect of individual agents working in their own self interest to the detriment of all, but i don't see it as inflexible nor irreversible. If people start getting bad service with Uber, due to lack of licensing or vehicle inspections, that will reflect on Uber's reputation. So eventually Uber may have a quality control problem.

But i guess i also wonder about taxi drivers limited licenses within a city. If they do, say, create artificial scarcity by under-filling taxi licenses, they not only increase the profit margins on the taxis that do operate, but they also incentivize alternatives like public transportation.
 
Ganesh said:
Absolute nonsense. Most taxi operators understand, and agree with such regulations as license restriction, vehicle inspections, uniform meter rates, etc., because without them, it would be a quick race to the bottom, with no one making any money once that destination was reached. Municipal and provincial fees in Canada amount to a minuscule proportion of industry costs, probably not even enough to cover administration and mailing costs.

As for complaints, yep, sure they are there. But how many complaints will we see in the future, if such new arrangements with less regulation, less responsibility, less commitment, less transparency, come to be the norm? If someone can get fired, and lose his livelihood for misconduct, how much more- or less- caring is a driver going to be when his gig is just pocket change, a side job with no commitment?
Click to expand...

Your post is nonsense. Here in Toronto, the annual fee for a taxicab is upwards of $5,000 - with thousands of cabs on the road. In addition, permits/licenses to own a cab are trading in excess of $100,000 and many who own those permits/licenses see them as retirement savings. The city also sets the rate that all cabs must charge, both to open the car door as well as per kilometer charges.

If you think it's peanuts to run a cab in a city like Toronto, go try it. The fees and lack of access above are why taxis aren't cost effective and why so many smart phone apps offering competing and better service are incredibly popular. They are even intruding on public transit services in some part of Toronto because of the competitive cost - $3 plus for a TTC fare - $5 for an Uber fixed fare/set route.

Uber is expanding its services into all kinds of other areas, such as food and other delivery services - fixed lunch services, etc. in the downtown core. I'm the last person to be interested or concerned about this because I'm not tech savvy or dependent, but most young people and particularly young professionals are interested and they're showing it with their business. You want to stand in the way of the younger generation just to feed an ever hungry and bloated bureaucracy.
 
CanadaJohn said:
Your post is nonsense. Here in Toronto, the annual fee for a taxicab is upwards of $5,000 - with thousands of cabs on the road. In addition, permits/licenses to own a cab are trading in excess of $100,000 and many who own those permits/licenses see them as retirement savings. The city also sets the rate that all cabs must charge, both to open the car door as well as per kilometer charges.

If you think it's peanuts to run a cab in a city like Toronto, go try it. The fees and lack of access above are why taxis aren't cost effective and why so many smart phone apps offering competing and better service are incredibly popular. They are even intruding on public transit services in some part of Toronto because of the competitive cost - $3 plus for a TTC fare - $5 for an Uber fixed fare/set route.

Uber is expanding its services into all kinds of other areas, such as food and other delivery services - fixed lunch services, etc. in the downtown core. I'm the last person to be interested or concerned about this because I'm not tech savvy or dependent, but most young people and particularly young professionals are interested and they're showing it with their business. You want to stand in the way of the younger generation just to feed an ever hungry and bloated bureaucracy.
Click to expand...

And so we have fees of about $5k, taken from a gross of, what, $80-100k? All businesses have costs. And let's be clear about these huge figures for licenses. These go to businessmen, who are caught up in the down and dirty of the marketplace, hoping to make the maximum for a limited commodity. They are worth what an owner demands, and a buyer is willing to pay. These funds do not go to government.

Authorities all over the world have attempted to set standards, fares, and license availability for taxi industries, because they are aware that unregulated competition will end with beat up tuck tucks undercutting the $1 fares by offering .50 cent fares. Your $5 fare for example means that drivers would be working for pin money, not for a living. And in aggregate, that means one more sector of the labour force that used to make a modest living, now pushed to the periphery of the economy.
 
Absentglare said:
Well i'm not sure that i consider uber an example of tragedy of the commons.

I guess i would think of tragedy of the commons applying more to things like traffic congestion.

There's definitely an aspect of individual agents working in their own self interest to the detriment of all, but i don't see it as inflexible nor irreversible. If people start getting bad service with Uber, due to lack of licensing or vehicle inspections, that will reflect on Uber's reputation. So eventually Uber may have a quality control problem.

But i guess i also wonder about taxi drivers limited licenses within a city. If they do, say, create artificial scarcity by under-filling taxi licenses, they not only increase the profit margins on the taxis that do operate, but they also incentivize alternatives like public transportation.
Click to expand...

License restrictions can produce a scarcity, and this is a bit of a balancing act to find the right numbers. If taxi licenses have been sold for $300k (they have) then that suggests there are too few of them, or something is out of balance. But there are a number of factors to consider. Are rates reasonable? Is unemployment such an issue that potential drivers are piling in and paying whatever, just to buy themselves a job? Are license sellers just trying to recoup the money they were fleeced for when they bought in?
 
Ganesh said:
License restrictions can produce a scarcity, and this is a bit of a balancing act to find the right numbers. If taxi licenses have been sold for $300k (they have) then that suggests there are too few of them, or something is out of balance. But there are a number of factors to consider. Are rates reasonable? Is unemployment such an issue that potential drivers are piling in and paying whatever, just to buy themselves a job? Are license sellers just trying to recoup the money they were fleeced for when they bought in?
Click to expand...

Sure, i was just trying to critically consider the point that it could be poorly implemented.
 
JohnfrmClevelan said:
Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
Click to expand...

Then you don't know what you are talking about. For example in NYC.. it's not about regulations that they have a problem with Uber.. it's because NYC can't collect the $1m in taxi medallions. The taxi cab medallion scam.
 
Ganesh said:
And so we have fees of about $5k, taken from a gross of, what, $80-100k? All businesses have costs. And let's be clear about these huge figures for licenses. These go to businessmen, who are caught up in the down and dirty of the marketplace, hoping to make the maximum for a limited commodity. They are worth what an owner demands, and a buyer is willing to pay. These funds do not go to government.

Authorities all over the world have attempted to set standards, fares, and license availability for taxi industries, because they are aware that unregulated competition will end with beat up tuck tucks undercutting the $1 fares by offering .50 cent fares. Your $5 fare for example means that drivers would be working for pin money, not for a living. And in aggregate, that means one more sector of the labour force that used to make a modest living, now pushed to the periphery of the economy.
Click to expand...

The $5000 annual license fee goes to the municipality, not to business - both taxi companies and independent drivers pay the fee - the independent driver takes it out of income and the taxi company takes it out of the "lease" arrangement they have with their drivers.

Bottom line, however, is that you were completely wrong when you claimed that the license fees was a minuscule cost and not sufficient to support or important to the bureaucracy that provides oversight to the taxi industry. Each thousand cabs in Toronto generates $5 million for the city - they don't spend anywhere near even that amount, let alone the multiples of that amount they pull in. It's a municipal slush fund with little to no oversight of what's actually happening in taxis and on the street.

There's a reason why Uber arose and is tremendously popular. It's what the taxi industry should be but isn't.

As for the $5 fee Uber charges for the downtown short run, competing with the TTC - they have a few cars, take 5 passengers each way each trip - driver gets $25, minus Uber fees, for a 10 minute run and does it several times each morning and evening during rush hour. If it wasn't profitable for the driver, there wouldn't be drivers signing up with Uber to do it.

Maybe one day you'll understand that business fills a vacuum and meets customer demands - government and bureaucracy ignores customer needs and demands and it's why it's piss poor at doing most anything.
 
Last edited:
austrianecon said:
Then you don't know what you are talking about. For example in NYC.. it's not about regulations that they have a problem with Uber.. it's because NYC can't collect the $1m in taxi medallions. The taxi cab medallion scam.
Click to expand...

Right but in such a case it's not just regulation that's the problem, it's the poor implementation of regulation that's the problem.

That's oversimplifying the problem to suggest a faux solution.
 
Ganesh said:
There is a great deal of controversy over the new taxi service, Uber. Some see it as "creative destruction", sweeping away an over regulated and fossilized taxi industry with new technology and more liberal ideas about work and reward.

Others see them as cheats who are not playing by the rules, and merely seeking quick profit by circumventing rules long in place, designed to ensure safety, transparency, and at least a chance at a fair return for all.

I think it fair to say that if they haven't broken rules, they have stretched and skewed them, and rationalized their end run around regulation in dubious ways.

Is this a "Tragedy of the Commons" type of scenario? I'm sure millions have taken Uber, and found things satisfactory, and probably had a cheaper fare. But what are the broader implications? What's good for the goose is sometimes not good for the whole flock .

Adequate insurance coverage for Uber cars is disputed by some, they do not have safety inspections like conventional cabs, and employee vetting is minimal in relation to established norms. This may allow for cheaper fares, but in the case of accident or incident with a driver, would they then be worth it?

If we accept Uber as being a legitimate business entity, then what stops the next operator who wants to make a buck by cutting corners? If a precedent is set, then the next cost cutter would have less opposition. Older cars, less driver standards, etc, until we have a race to the bottom.

This from the University of Chicago:

"... a society committed to freedom and equality might not actually want to save such jobs. Ideally, the stunning productivity gains promised by new technologies like Uber could reduce society’s need for work that is deadening to the human spirit. But without far-reaching changes to our social safety net, doing so would render tens of millions destitute. I worry that such a crisis in the low-wage labor market is close on the horizon, and that society is unprepared to deal with it...."


What do you think?



https://lawreview.uchicago.edu/page/social-costs-uber
Click to expand...

I adore Uber, Lyft, etc. It's one of the few issues which motivate me to physically write letters to State Legislatures and Congressman to show my support. Fortunately pretty much everyone loves Uber/Lyft and/or knows someone who drives for them which keeps legislatures on their toes.

What keeps the next operator from cutting corners is consumer confidence. Despite the hullabaloo it really hasn't been shown that Uber or the other rideshare companies are more dangerous in any meaningful way than a Taxi. If Uber was really overrun with poor cars, rapist drivers, and other such problems people wouldn't use it. This isn't a complex consumer choice, the individual isn't being asked to assess the risks of taking one medication over the other, they are being asked to pick a car company to take a lift with.
 
Absentglare said:
Right but in such a case it's not just regulation that's the problem, it's the poor implementation of regulation that's the problem.

That's oversimplifying the problem to suggest a faux solution.
Click to expand...

No, it's about money. Cities like NYC, Chicago, San Fran and other only offer limited numbers of medallions as a way to inflate the price they can sell them for. So only taxi companies can buy them and not the individual so it drives out competition and for that the cities set the "price" of the cab ride just enough so those taxi companies can make a profit to buy next years medallions.

NYC doesn't have cops and others on the beat checking if the cabs are safe 100% of the time or that tax driver is 100% legal. They don't give a crap about that. I lived in NYC for 2 years and this whole it's about regulation is nonsense. I've had plenty of taxi drivers who were literally in the country for a week or two driving me around NYC and I had to give them directions.
 
JohnfrmClevelan said:
Is there only one cab company in your local Yellow Pages? If not, then regulations did not lead to a monopoly.

Regulations are there so when you get a cab, you can be reasonably confident that the driver is trained, is not a maniac, the brakes work, etc. Uber, as neat an idea as it is in some ways, basically saves you money at the expense of your safety. It's analogous to a restaurant with no health inspections, or a doctor with no license.
Click to expand...

I believe he is speaking of the NYC taxi medallion cartel.
 
You must log in or register to reply here.
Back
Top Bottom