Saturday, 10 May 2014

More Taxi Rent Seeking

On a recent post of Mark's, I commented that

The US is worse - you don't even have minicabs in some places, which is why Uber got created.
Turns out that Uber is also coming here, and guess who's not happy about it?

London black-cab drivers are planning to cause gridlock in the city to protest against car service Uber.

The Licensed Taxi Drivers Association complains that Uber's drivers are using a smartphone app to calculate fares despite it being illegal for private vehicles to be fitted with taximeters.

Transport for London has declined to intervene, because it disagrees that there has been a breach of the law.

LTDA now plans to force the issue by holding the action in early June.

"Transport for London not enforcing the Private Hire Vehicles Act is dangerous for Londoners," Steve McNamara, LTDA's general secretary, told the BBC.

The benefit that black cabs have (in any town) is that you know that you're reasonably well protected. The fare is regulated, they use clocks and so forth. Plus they can pick up (at places like stations) which makes it easier than trying to find a reliable minicab company.  I'm guessing that in general, locals use minicabs and people coming into towns and cities use black cabs.

With Uber, you get a guaranteed fare and can book with an app. It streamlines the process. If I'm travelling into London and need a taxi I could just use Uber from the train and book a car for when I arrive. That means I won't be using a black cab.

So, as people who've got through the high barriers to entry (expensive cars, "The Knowledge"*), they don't want new competitors working around those barriers.

* There's no such thing as The Knowledge with minicabs in Swindon. You give them an address, they punch it into the TomTom and get you to the address. I've had Poles and Nigerians find the right address every time.

12 comments:

Curmudgeon said...

I don't see that they really do much that private hire firms don't already do. As you say, the original idea probably stemmed from places where the only taxis are hackneys and private hire as understood in the UK doesn't exist.

The Stigler said...

Curmudgeon,

It's an improvement on private hire firms because it's a one-stop shop.

It's a big thing in the USA because a lot of places have protected taxi cartels. They're trying all possibilities to defeat those.

Curmudgeon said...

I vaguely remember that a while back a single national "call-a-cab" number was promoted, although I haven't seen it recently and it was probably slower than just calling a local firm directly.

Also it can't be beyond the wit of man for private hire companies to introduce booking by app rather than phone call.

Bayard said...

"There's no such thing as The Knowledge with minicabs in Swindon. You give them an address, they punch it into the TomTom and get you to the address"

AFAIK, "The Knowledge" is more about the best way to get somewhere, rather than knowing where the destination address is. Satnavs don't have a good record in this matter, which is why I will always check their recommended route on a map if I can.

Mark Wadsworth said...

I love it when black cab drivers say "Our fares are regulated. You might get ripped off by private hire."

Fact is, private hire usually costs half as much as black cab. You can agree the price beforehand, unlike black cabs who just charge you what they feel like charging.

Curmudgeon said...

I get the impression that there's a huge difference between the London and out-of-London situation that somebody should do an analysis of. Around here I'd say that hackneys were roughly a third dearer.

The Stigler said...

Bayard,
My experience is occassional mistakes by sat navs (one tried to get me to go through Chieveley Services) but they generally get a pretty good route.

Curmudgeon,
My cab firm has an app. That's not the thing though - it's having a name you can use anywhere (like that call-a-cab). And Uber have added lots of facilities, like centralised billing.

The Stigler said...

Mark,

I'm roughly with Curmudgeon. Fares about 1/3rd more expensive out here. That's still such an additional cost that I never use them (when I arrive back in town, I call the minicab firm from the train).

It could be that The Knowledge raises the cost more for London.

Mark Wadsworth said...

@ C, TS, Fair enough, my estimate of price differential is based on London. Maybe the black cab drivers aren't quite as greedy elsewhere.

Bayard said...

TS, my experience is precisely opposite. Every time I think I'll give the damn thing a second chance, it sends me some weird route again.

Robin Smith said...
This comment has been removed by the author.
Robin Smith said...

Good one. Protect my rents, stop others from collecting them.

I often have financial advisors tell me they are in a better position than MeltFund. Why? "Because my license protects me". But when they speak to their clients, all of a sudden its to protect the client from scammers.

So funny. All the world is a scam. Affirm this and everything just falls into place. No exceptions. Even what you do.

Am currently dealing with the contract agency network for hiring staff. Its a complete basket case for it. They are basically a tax collecting franchise and get to keep 15% for themselves. They say they will save you 10% in tax though. So get the normal rate of 5% in rent. This is all arranged through the law. Same as in Rome.

What's almost impossible to believe is that if the all tax were abolished and locations taxed 100%, there would be no profit in all this dead weight and jobcreationism as you well know.

What's even harder to believe than the impossible, is that this is what the majority are freely voting for - REALITY. Even the intelligent, well educated and people who are told clearly about LVT.

REALITY is real. LVT is not.

Something much deeper is going on than the LVT fan is willing to investigate. Because that deeper thing makes the LVT agenda merely superficial. And what the LVT fan justifies himself by, is removed.

And that is the real problem. The LVT fan is at the frontier of making something happen. But is blocking anyone who tries to cross.