Uber needs to be run out of town

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abnormal

Rev Pesky wrote:
... Uber offers some insurance, but only when there is a fare in the car. When there is no fare in the car, where is the insurance? There isn't any.

I don't think that's strictly true.  The owner of the car has to have his normal private passenger auto insurance in order to license the car.  In Vancouver, or BC in general, that's provided by ICBC.  Uber's insurance coverage is supplementary and is intended to apply when the car is used as a livery vehicle.  (In all honesty I have no idea how ICBC feels about this - does Uber's policy provide some sort of excess coverage and only pay amounts in excess of those paid by the normal private passenger policy, does it pay the whole thing in the event that there is a passenger in the car, does it cover the passenger as well as any other third parties (pedestrians, other autos, etc), and so forth).

NorthReport
abnormal

Thanks but that doesn't really answer my questions.  It doesn't address the nature of Uber's own insurance.  And, while it makes it clear that ICBC isn't on the hook, or at least tells you that it's not on the hook, in the event of an accident when your car is being used as a livery vehicle, what it does say is that ICBC is going to pay third party claims and then sue the driver to recover them.  That's effectively an empty threat if Uber is providing coverage - all it means is that Uber's insurer will reimburse ICBC.  So we're back to "exactly what insurance does Uber carry?"

josh

Tangentially related:  classifying workers as independent contractors:

What would become a 43-year-marriage all started when handyman Lawrence fixed Marilyn's broken chesterfield. The pair went on to spend three decades working together for a Toronto-area furniture company renovating kitchens. When the business closed in 2009, the Keenans were abruptly let go, with no notice or severance.

The reason: Their company had classified them as "independent contractors," a category with no protection under Ontario's employment laws.

Now, in a precedent-setting victory for precarious workers across the province, the Keenans have challenged that designation — and won. They have been awarded $125,000 after a judge found Canac Kitchens misclassified their employment status and owed the couple 26 months notice. It's the highest notice period ever awarded to a contractor in Canada. 

http://startouch.thestar.com/screens/55d535ad-6fbb-4074-996c-944e62c4e21...

Rev Pesky

abnormal wrote:

Thanks but that doesn't really answer my questions.  It doesn't address the nature of Uber's own insurance.  And, while it makes it clear that ICBC isn't on the hook, or at least tells you that it's not on the hook, in the event of an accident when your car is being used as a livery vehicle, what it does say is that ICBC is going to pay third party claims and then sue the driver to recover them.  That's effectively an empty threat if Uber is providing coverage - all it means is that Uber's insurer will reimburse ICBC.  So we're back to "exactly what insurance does Uber carry?"

Not sure what you're not getting here. ICBC demands that vehicles used for transporting passengers have insurance for that rate class (taxi or limousine). If you are not covered in that rate class, you have no insurance. As the posted link points out, there are other requirements as well. But there is no such thing as part time insurance. If your vehicle is used as a cab, you have to have insurance for that rate class. Uber may offer insurance for the time when a passenger is in the car, but that does not satisfy the law here.

radiorahim radiorahim's picture

Quote:
The limitations to actually pulling it off aren't technological, they are social. They are questions like how do you trust drivers (which is already an issue with Uber, anyways) and how to handle a direct-payment system. These are things that could be handled on a government level, I believe, quite easily. The infrastructure to support the system could easily be publically funded. I'm not a computer person but it can't be much more complicated than maintaining servers and having a payment system in place. Right?

It's quite true that the problems aren't technological.   The problem is capitalism.

Capitalism has a need to "monetize" software and platforms in order to generate profit and therefore that's where the big money goes.  Goldman Sachs isn't interested in platforms that liberate taxi drivers and so developing "free as in freedom" platforms will always be an uphill struggle.

Uber may make use of free software to build their platform, but it is free to them and not to us.   That's why the Free Software Foundation created the AGPL (GNU Affero General Public License) to cover those situations where we as users are "running" software on someone else's computer servers...which is the case when using things like Uber apps, Facebook etc.

If a network platform isn't licensed under the AGPL it isn't "free software" even if the folks who created the platform made use of free software components in building the platform.

 

Rev Pesky

josh wrote:

Tangentially related:  classifying workers as independent contractors:

...The reason: Their company had classified them as "independent contractors," a category with no protection under Ontario's employment laws.

Now, in a precedent-setting victory for precarious workers across the province, the Keenans have challenged that designation — and won. They have been awarded $125,000 after a judge found Canac Kitchens misclassified their employment status and owed the couple 26 months notice. It's the highest notice period ever awarded to a contractor in Canada. 

http://startouch.thestar.com/screens/55d535ad-6fbb-4074-996c-944e62c4e21...

This is an important point. The business model of Uber is not new, it's as old a capitalism. There was mention of the Uber driver who went off the deep end the other day, and I agree with those who said you can't blame Uber for that. But look at the business model and you see something interesting. That driver had been (according to the story) an insurance adjuster. Now, I'm not sure what an insurance adjuster makes, but I would assume it was a reasonable salary. So how did this guy end up driving cab.

I'm going to speculate and say he lost his job (for whatever reason), but still had his car. Driving for Uber was one of the options he had, and he took it. This option works best for those who once had enough money to buy a newer car, and since then have lost their job. It just doesn't seem possible that some poor person would be able to go out and buy a relatively new car, and then start driving for Uber.

I suggest it would be fairly common for a new Ube driver to be that sort of person, one who had at one time the wherewithal to buy a relatively new car, but was now in a position of reduced income, with all the car and house payments still to be made. I would also suggest that they don't look far enough into the future to think of what happens when their car dies. This is very common in the de-regulated trucking industry, where people buy a job with a truck, and drive until the truck dies, or needs major repair, and then quit.

Part of the reason the cab industry is regulated is to maintain a fleet of cabs. Cab licences in Vancouver are very expensive, but once you're in, you're going to stay in. By the way, I've mentioned this before, but no response, so I'll just toss it in once more. The city of Vancouver requires a certain percentage of the cab fleet to be wheelchair accessible. Does Uber demand a certain number of wheelchair accessible vehicles?

 

 

bagkitty bagkitty's picture

Happy Days... for the third day in a row the CBC Calgary has dropped the feel good "ride sharing" designation for the significantly more accurate "ride hailing".

Semantics is our good friend...

Mr. Magoo Mr. Magoo's picture

It would be "ride sharing" if the Uber driver just happened to be travelling from the same bar you're at to your house, and you could bum a lift in exchange for splitting the cost of some gas.

radiorahim radiorahim's picture

Quote:
It would be "ride sharing" if the Uber driver just happened to be travelling from the same bar you're at to your house, and you could bum a lift in exchange for splitting the cost of some gas.

Exactly.   But we all know that it's not.

Instead we know that it is a defacto taxi service run by a $40 billion Silicon Valley corporation instead of a taxi service being run by all kinds of locally owned and often corrupt local companies.  At least in the current system taxi workers have some ability to organize unions and driver associations to push for better rates and working conditions and municipal governments have some ability to regulate for safety/insurance etc.

With Uber and others like it, organizing and regulating is much more difficult.

 

voice of the damned

google "Edmonton startup TappCar shifts into high gear in anticipation of launch CBC" for a relevant article. (url is too long)

Rev Pesky

Link to the above posted CBC story

TappCar Startup

voice of the damned

Thnaks, man. Tinyurl wouldn't load on the computer I was using earlier.

Rev Pesky

voice of the damned wrote:
Thnaks, man. Tinyurl wouldn't load on the computer I was using earlier.

I don't want to disrupt this thread, but you don't need TinyURL in order to shorten links. Just type what you want to call the story into your post, highlight (select) what you've just typed, then click on the 'chain' in the task ribbon (where the font formatting, etc. is).

A window will pop up, and you can pasted the URL into it. It has a space for the name you want to use, but you can leave that empty. The only other thing you need to do is select the middle option (target). That is a drop down menu which allows you to select "Not Set", "Open In Same Window" or "Open In New Window". 

I suggest you pick "Open In New Window", because then you don't have to use the back button to get back here, and it allows the reader to have both the thread and the linked article open at the same time.

Just to clarify. In order to enter the TappCar link into my post I first found the article, then highlighted, right-clicked, and 'copied' the URL. Then I opened a new post window in this thread and typed in the name I wanted for the article. Having done that, I highlighted that text, and clicked on the 'chain' icon on the task ribbon. A window popped up with the various options for links, and I pasted the URL into space that says 'Link URL', selected the next option "Open In New Window", left the next box, "Title", empty, and clicked "Insert".

Note, the 'chain' (link) icon is not available until you have highlighted some text. the highlighted text then becomes the title of the posted link. Sometimes it takes a second or two for the Link menu window to open, so don't give up if it doesn't open immediately.

Okay, back to the thread.

I notice Uber has quit Edmonton, with poor grace, because the city decided they wanted Uber to behave by the same laws as other taxis. which shows that if city councils just ignore the bafflegab, and enforce the rules, Uber has no choice but to obey them, or exit.

 

montrealer58 montrealer58's picture

Interesting Rev. If a city shows some fortitude, Uber skips town. What is curious about Uber from an investment viewpoint is that its finances are extremely opaque. Uber will not divulge its internal financials to anyone in the investment community except Goldman Sachs (GS), who are now the sole determiners of Uber Net Asset Value. The last valuation we had for Uber is $62 billion, which is mainly based on the assets in an offshore hedge fund managed on Ubers's behalf by the very same GS. Uber is worth $62 B because Lloyd Blankfein says so, and if you want to put money in you have to be a billionaire and have your people call Lloyd's. Somewhat dodgy. 

Rev Pesky

montrealer58 wrote:

Interesting Rev. If a city shows some fortitude, Uber skips town. What is curious about Uber from an investment viewpoint is that its finances are extremely opaque. Uber will not divulge its internal financials to anyone in the investment community except Goldman Sachs (GS), who are now the sole determiners of Uber Net Asset Value. The last valuation we had for Uber is $62 billion, which is mainly based on the assets in an offshore hedge fund managed on Ubers's behalf by the very same GS. Uber is worth $62 B because Lloyd Blankfein says so, and if you want to put money in you have to be a billionaire and have your people call Lloyd's. Somewhat dodgy. 

Well, nowadays the whole capitalist edifice is a bit dodgy. As bad as Uber is, they aren't the only ones out there whose valuation is based on fond hopes. The whole worldwide financial structure is now an upside down pyramid, so top heavy that the crash is inevitable. The results of which will make 2008 look like funny hats day at the local office. Some days I'm glad I'm old...

montrealer58 montrealer58's picture

I think the $62B is what Lloyd has raised on behalf of Uber based on his exclusive assessment of its accounts. Given a forward P/E or P/S of 15.5:1 that assumes earnings/sales of $4B. If they are getting 30% of fares, it means at least $13 billion is being diverted from the taxi industry worldwide. Which seems a little outlandish.

josh

A large-scale car-hail dispute has broken out between Newark Mayor Ras Baraka and the Port Authority of New York and New Jersey, which operates Newark Liberty Airport and is refusing to allow local law police officers to enforce city laws at the facility.Baraka pledged last month to ticket and tow cars used by car hail services Uber and Lyft, saying officers would specifically target vehicles operating at the airport and Newark Penn Station. 

. . . .

Uber drivers operate in defiance of municipal ordinances in a number of cities, like Newark, or in legal gray areas. The company is trying to win the approval of local officials in New Jersey, as it has already done in New York, but has faced trouble in a number of places — Newark more than anywhere. 

http://www.capitalnewyork.com/article/new-jersey/2016/03/8592614/newark-...

abnormal

montrealer58 wrote:
... it means at least $13 billion is being diverted from the taxi industry worldwide. Which seems a little outlandish.

Assuming those numbers are even close to being correct, you have to ask why Uber has been such a phenomenal success.  Why are people using them and not taxis?

Rev Pesky

abnormal wrote:
...Assuming those numbers are even close to being correct, you have to ask why Uber has been such a phenomenal success.  Why are people using them and not taxis?

Don't forget that in a large part of the world the cab industry is a lot more chaotic than it is here. Strangely enough, Uber does well in areas where there are few, or few enforced, regulations. It's also true that if you forego proper insurance, proper car inspections and proper maintenance, you can deliver passengers cheaper than regulated cabs. And as I've pointed out earlier, if the car owner can't afford to replace their car after it is used up, there's always more people who have a car, and need the money.

If you own a car, and need the money, you can deliver pizzas with your car. The outcome is the same. When your car dies, you find some other way to make money. Yet people still do it, knowing it's hopeless. That is the basis of the Uber business model.   

montrealer58 montrealer58's picture

Not having to pay insurance, or rent a taxi license, makes Uber much more competitive in the world of drivers. Uber still gets a 30% rakeoff, and I am not sure how long that will last.

josh

Uber has agreed to pay up to $100 million and make several policy concessions to settle a pair of major class-action lawsuits in two states that will keep its drivers independent contractors instead of employees, both sides announced Thursday night.The settlement is a major step toward the ride-hailing company keeping its thriving business model that has been threatened as drivers have sought a more secure status and more bargaining rights.

Under the deal, Uber will pay $84 million to the plaintiffs in California and Massachusetts and another $16 million if the company goes public and meets certain goals.

 In a concession touted by the plaintiffs, Uber will allow drivers to put signs in their cars saying "tips are not included" in the price of a ride and would be appreciated. 

http://talkingpointsmemo.com/news/uber-settles-lawsuits-employees-remain...

 

josh

Hours after announcing the deal that will allow Uber to continue operating in the city, the office of Mayor Ras Baraka on Saturday released details of the tentative agreement.Under terms of the deal, Uber will pay the city a $10 million fee to operate at Newark Liberty International Airport for the next 10 years.

The company has also agreed to provide $1.5 million in liability coverage for all drivers in its network, conduct background checks of each one and to install and enforce a zero-tolerance drug and alcohol abuse policy. 

http://www.nj.com/essex/index.ssf/2016/04/newark_releases_new_details_of...

 

josh

In Uber's early days, it said it wanted to be "everyone's private driver." Now the company and its main U.S. competitor, Lyft, are playing around with the idea of becoming the bus driver, too. Uber has partnered with a handful of local public transportation agencies to strike deals like the one in Pinellas Park, which it expanded earlier this month. Later this month Lyft plans to launch a partnership with Centennial, Colorado, its first deal where a local government will subsidize its rides. 

 

http://www.bloomberg.com/news/articles/2016-08-15/uber-and-lyft-want-to-replace-public-buses

 

 

Sean in Ottawa

The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I live here and am one of the tax payers essentially on the hook for this.

I hope the city loses. What they ahve done is disgusting and immoral. I think it will also prove illegal.

Sean in Ottawa

By the way -- I can presume the city took this position becuase it was popular -- people want a cheaper ride. But the city has an obligation to be fair and to back up its agreements and systems including a licensing regime.

I think the city has behaved in spectacular bad faith.

Mr. Magoo Mr. Magoo's picture

Quote:
The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I don't disagree that if the City isn't enforcing regulations, they should.

But I would disagree that it's in any way the City's responsibility to ensure that a taxi plate is a blue-chip investment.  I believe that the last new plates sold in Ottawa sold for under $600, and the owners are complaining that they're now worth only a mere $100,000 or so, instead of twice that?  Wowzers.  Who can absorb a loss like that??

Sean in Ottawa

Mr. Magoo wrote:

Quote:
The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I don't disagree that if the City isn't enforcing regulations, they should.

But I would disagree that it's in any way the City's responsibility to ensure that a taxi plate is a blue-chip investment.  I believe that the last new plates sold in Ottawa sold for under $600, and the owners are complaining that they're now worth only a mere $100,000 or so, instead of twice that?  Wowzers.  Who can absorb a loss like that??

Actually the city is changing the rules after people are invested so it is worse than not enforcing they are changing them.

And no this is not about the plate being a blue chip investment. The city set the rules for the market and they are the ones that allow the plates to go to a small cartel. Essentially the city gives the paltes away to a small group who then lease or sell them at massive profit. The market for Cab drivers does not include plates at $600. The little guys had to buy from the cartel the city practically gave the plates to by the bundle. Then there is the dispatch fees. Of course dispatch is also controlled by a cartel. The city built the system and then broke it.

The city is complicit in the marketplace for plates by controlling supply and choosing to sell these in a closed market to a handful of people.

The actual drivers then got screwed when after they bought these licenses the fees are still there but the city then welcomes Uber to come in with looser rules and no plate fees.

Now they pretend it is not their fault or responsibility.

If this sounds corrupt to you it does to me but of course the evidence is not there to see -- just the effects and the change in regulations that takes an industry of sole operators / small people who are mortgaged to the hilt then slammed with a rule change that guts their investment.

ygtbk

Sean in Ottawa wrote:

Mr. Magoo wrote:

Quote:
The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I don't disagree that if the City isn't enforcing regulations, they should.

But I would disagree that it's in any way the City's responsibility to ensure that a taxi plate is a blue-chip investment.  I believe that the last new plates sold in Ottawa sold for under $600, and the owners are complaining that they're now worth only a mere $100,000 or so, instead of twice that?  Wowzers.  Who can absorb a loss like that??

Actually the city is changing the rules after people are invested so it is worse than not enforcing they are changing them.

And no this is not about the plate being a blue chip investment. The city set the rules for the market and they are the ones that allow the plates to go to a small cartel. Essentially the city gives the paltes away to a small group who then lease or sell them at massive profit. The market for Cab drivers does not include plates at $600. The little guys had to buy from the cartel the city practically gave the plates to by the bundle. Then there is the dispatch fees. Of course dispatch is also controlled by a cartel. The city built the system and then broke it.

The city is complicit in the marketplace for plates by controlling supply and choosing to sell these in a closed market to a handful of people.

The actual drivers then got screwed when after they bought these licenses the fees are still there but the city then welcomes Uber to come in with looser rules and no plate fees.

Now they pretend it is not their fault or responsibility.

If this sounds corrupt to you it does to me but of course the evidence is not there to see -- just the effects and the change in regulations that takes an industry of sole operators / small people who are mortgaged to the hilt then slammed with a rule change that guts their investment.

The taxi drivers must feel like they are getting screwed. But don't you think that both the city and the drivers were complicit in price-fixing, if Uber can provide the same service at a much lower cost? Blaming it all on the city seems odd to me.

Sean in Ottawa

ygtbk wrote:

Sean in Ottawa wrote:

Mr. Magoo wrote:

Quote:
The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I don't disagree that if the City isn't enforcing regulations, they should.

But I would disagree that it's in any way the City's responsibility to ensure that a taxi plate is a blue-chip investment.  I believe that the last new plates sold in Ottawa sold for under $600, and the owners are complaining that they're now worth only a mere $100,000 or so, instead of twice that?  Wowzers.  Who can absorb a loss like that??

Actually the city is changing the rules after people are invested so it is worse than not enforcing they are changing them.

And no this is not about the plate being a blue chip investment. The city set the rules for the market and they are the ones that allow the plates to go to a small cartel. Essentially the city gives the paltes away to a small group who then lease or sell them at massive profit. The market for Cab drivers does not include plates at $600. The little guys had to buy from the cartel the city practically gave the plates to by the bundle. Then there is the dispatch fees. Of course dispatch is also controlled by a cartel. The city built the system and then broke it.

The city is complicit in the marketplace for plates by controlling supply and choosing to sell these in a closed market to a handful of people.

The actual drivers then got screwed when after they bought these licenses the fees are still there but the city then welcomes Uber to come in with looser rules and no plate fees.

Now they pretend it is not their fault or responsibility.

If this sounds corrupt to you it does to me but of course the evidence is not there to see -- just the effects and the change in regulations that takes an industry of sole operators / small people who are mortgaged to the hilt then slammed with a rule change that guts their investment.

The taxi drivers must feel like they are getting screwed. But don't you think that both the city and the drivers were complicit in price-fixing, if Uber can provide the same service at a much lower cost? Blaming it all on the city seems odd to me.

The drivers are not price fixing. They are buyers not sellers in this. The city and its cartel of buyers fix the prices and control the supply.And they are the capitalists. The drivers supply the labour to get little to no chance of making a living off of it. The Cartel is doing fine and so is the city.

And the difference in cost reflects not just a difference in plates but dispatch fees and regulations only taxi drivers face.

The city created a market; fed it to its cartel and then destroyed it by creating a new market (becuase it was politically popular). Those in the old market who financed themselves got screwed. Many of these people are immigrants who put all they had into these licenses.

 

ygtbk

Sean in Ottawa wrote:

ygtbk wrote:

Sean in Ottawa wrote:

Mr. Magoo wrote:

Quote:
The city of Ottawa is being sued by taxis here for their behaviour in setting up a system that was very expensive, having taxis invest in it and then not defending it -- then changing the regulation to make licences less valuable.

I don't disagree that if the City isn't enforcing regulations, they should.

But I would disagree that it's in any way the City's responsibility to ensure that a taxi plate is a blue-chip investment.  I believe that the last new plates sold in Ottawa sold for under $600, and the owners are complaining that they're now worth only a mere $100,000 or so, instead of twice that?  Wowzers.  Who can absorb a loss like that??

Actually the city is changing the rules after people are invested so it is worse than not enforcing they are changing them.

And no this is not about the plate being a blue chip investment. The city set the rules for the market and they are the ones that allow the plates to go to a small cartel. Essentially the city gives the paltes away to a small group who then lease or sell them at massive profit. The market for Cab drivers does not include plates at $600. The little guys had to buy from the cartel the city practically gave the plates to by the bundle. Then there is the dispatch fees. Of course dispatch is also controlled by a cartel. The city built the system and then broke it.

The city is complicit in the marketplace for plates by controlling supply and choosing to sell these in a closed market to a handful of people.

The actual drivers then got screwed when after they bought these licenses the fees are still there but the city then welcomes Uber to come in with looser rules and no plate fees.

Now they pretend it is not their fault or responsibility.

If this sounds corrupt to you it does to me but of course the evidence is not there to see -- just the effects and the change in regulations that takes an industry of sole operators / small people who are mortgaged to the hilt then slammed with a rule change that guts their investment.

The taxi drivers must feel like they are getting screwed. But don't you think that both the city and the drivers were complicit in price-fixing, if Uber can provide the same service at a much lower cost? Blaming it all on the city seems odd to me.

The drivers are not price fixing. They are buyers not sellers in this. The city and its cartel of buyers fix the prices and control the supply.And they are the capitalists. The drivers supply the labour to get little to no chance of making a living off of it. The Cartel is doing fine and so is the city.

And the difference in cost reflects not just a difference in plates but dispatch fees and regulations only taxi drivers face.

The city created a market; fed it to its cartel and then destroyed it by creating a new market (becuase it was politically popular). Those in the old market who financed themselves got screwed. Many of these people are immigrants who put all they had into these licenses.

I feel sorry for the drivers (as I said), but the city created a false market and then destroyed it. So much for the omnibenevolence of government. Government is Leviathan.

To say the drivers are "buyers, not sellers" is manifestly wrong. The drivers bought into a false market with restricted supply. If the drivers were benefiting from restricted supply they were getting a benefit from price fixing. I am sorry that they made what turned out to be bad decisions in retrospect.

Mr. Magoo Mr. Magoo's picture

Quote:
Actually the city is changing the rules after people are invested so it is worse than not enforcing they are changing them.

Are you talking about the original $584 investment in a taxi plate?  If taxi plates have become a tulip economy, I don't think the City has any special duty to speculators to ensure that the market price is kept higher than what they paid. 

Quote:
The city set the rules for the market and they are the ones that allow the plates to go to a small cartel. Essentially the city gives the paltes away to a small group who then lease or sell them at massive profit.

Err, OK.  But then we should care about this cartel, and their loss of profit??

FWIW, I would have no problem with any municipality making a taxi licence non-transferable, the way a driver's licence isn't, or even a fishing licence isn't.  But if a municipality sets a cost of a few hundred dollars for something with a market value of a few hundred thousand dollars, that's going to invite speculation... but how that plays out shouldn't really be the City's problem.

Quote:
The city is complicit in the marketplace for plates by controlling supply and choosing to sell these in a closed market to a handful of people.

Can you tell me more about this closed market?  I'm asking honestly, because I wasn't aware that you had to be from a select group to be eligible for a taxi plate.

Quote:
The drivers are not price fixing. They are buyers not sellers in this. The city and its cartel of buyers fix the prices and control the supply.And they are the capitalists.

I'm not sure the Cit(ies) are the capitaliists in this.  I think a taxi plate sells for about twice as much in Toronto as in Ottawa, but that's still a tiny fraction of the market value.  What capitalist would do that?

 

 

Sean in Ottawa

Ottawa has not released any plates since 2013. So they are bought and sold as commodities only. If you want to work you have to buy one. For the drivers that is how it is. It is the ability to work they pay for not speculation.

The plates are sold to companies and individuals who own in some cases hundreds of them and then rent them out to drivers who pay much of what they want to the middle person.

Many cities work this way.

If cities only sold the plates to drivers instead of having them be transferable then this would not happen.

ygbtk --- the drivers either rent or buy a plate for themselves -- they are not buying them for resale so they are not sellers. I don't know what basis you are saying this is manifestly wrong. The inflated plates is not money going to them -- it goes to the middle people.

Frankly this is a scandal. If the plates were not transferable then the city could charge more and the drivers would still pay less. And the person who is doing the thing is licensed to do it rather than having a another person hold the plate as a commodity.

How does the city or the driver benefit from these holding operations when none of that money goes to the city or the driver?

How would you like it if the plate for your personal car was owned by third parties, the province did not make any and said you could buy it on an open market? Surely the city could limit the people who hold plates to the people who use them. There would be a market but nothing like this. They could go further and say that they cannot be transferred at all. If you want to drive a taxi get a plate and if you stop the plate gets re-issued by the city. Just like with a car plate.

Then the city could change the rules if it likes because it has not created a market for an asset it is just licensing an activity.

Mr. Magoo Mr. Magoo's picture

Quote:
If cities only sold the plates to drivers instead of having them be transferable then this would not happen.

OK, so let municipalities make this change, and taxi licences can be like driver's licences or fishing licences.

They only became a hot commodity when municipalities sold them for a small fraction of their market value, while maintaining a monopoly on them so that the market value skyrocketed.

What if cash-strapped and perenially moaning municipalities auctioned them, to try to find their real market value?  Then the primary buyers wouldn't be speculators who have no intention of ever driving hack.

But again, though, can you tell us more about how the only people who can buy them are speculators?  That "closed market" stuff?

Sean in Ottawa

Mr. Magoo wrote:

Quote:
If cities only sold the plates to drivers instead of having them be transferable then this would not happen.

OK, so let municipalities make this change, and taxi licences can be like driver's licences or fishing licences.

They only became a hot commodity when municipalities sold them for a small fraction of their market value, while maintaining a monopoly on them so that the market value skyrocketed.

What if cash-strapped and perenially moaning municipalities auctioned them, to try to find their real market value?  Then the primary buyers wouldn't be speculators who have no intention of ever driving hack.

But again, though, can you tell us more about how the only people who can buy them are speculators?  That "closed market" stuff?

I already said -- have the person who drives the cab get the license and have them not transferable. Then they cannot be owned by speculators who own up to hundreds of them. If you only get to own one and you cannot have someone else use it then speculators don't buy them all and then rent them/sell them to actual workers.

Mr. Magoo Mr. Magoo's picture

I wouldn't even be averse to the idea of two individuals sharing it -- only because one individual can't drive that taxi 24 hours a day -- but still with the understanding that it's not transferable.

Mind you, we're going to hear from every speculator who mortgaged their home to buy a licence that's now only useful for driving a taxi.  Are we ready to hear their complaints about how they spent their kids' education funds for this and now we burst the bubble?

I'm ready.  You ready?

ygtbk

Sean in Ottawa wrote:

...

ygbtk --- the drivers either rent or buy a plate for themselves -- they are not buying them for resale so they are not sellers. I don't know what basis you are saying this is manifestly wrong. The inflated plates is not money going to them -- it goes to the middle people.

...

First, the drivers are selling taxi sevices. So they are both buyers of plates and sellers of taxi services.

Second, it would be surprising if a retiring driver did NOT sell his plates - he or she doesn't need them any more, and they are not worthlrss.

I'm not sure what else I can say.

Mr. Magoo Mr. Magoo's picture

Quote:
First, the drivers are selling taxi sevices. So they are both buyers of plates and sellers of taxi services.

It's also worth noting that while a taxi plate has a certain market value as an investment, it also has a "use value" in that with it, you can drive a cab and earn fares.

I just read of a guy who sold a plate for $200k that he had bought 30 years earlier for $100k, and who felt he was basically only breaking even once inflation was taken into account.

But what about 30 years worth of fares?  Or 30 years of just renting that plate, if that's what he did?

That "use value" is really all the City is selling.  The investment value of plates is kind of out of their hands.  Not that new City policies wouldn't affect that investment value, but more that the City shouldn't be under any kind of obligation to ensure that those policies don't affect the investment value.

Sean in Ottawa

ygtbk wrote:

Sean in Ottawa wrote:

...

ygbtk --- the drivers either rent or buy a plate for themselves -- they are not buying them for resale so they are not sellers. I don't know what basis you are saying this is manifestly wrong. The inflated plates is not money going to them -- it goes to the middle people.

...

 

First, the drivers are selling taxi sevices. So they are both buyers of plates and sellers of taxi services.

Second, it would be surprising if a retiring driver did NOT sell his plates - he or she doesn't need them any more, and they are not worthlrss.

I'm not sure what else I can say.

First the drivers are not making money buying and selling plates. This money is made by the middle person marking up the City registration cost. The drivers if they sell plates are mostly recovering cost. The Drivers are selling their labour not the right to work which is what the companies are selling. I think, here of all places, this concept should not be as difficult as it seems to be. there is a difference between a plate as a commodity and labour -- must I explain that?

Second, if the city made plates annual and direct to drivers, the city would get the benefit of the registration and this capital pileup would not exist. If a driver retires, the plate would not be a big investment (only for the unused months).

What the present system does is create and feed a cartel that controls the right to work and sucks up the majority of the value of labour merely to buy that right to work. This is not progressive and should be questionned.

This is why the plates should not be transferrable.

How to get to a more rational system from here is a challenge. To start I would still make them non transferrable even though they would lose investment value. Those who have them now and are drivers would have them for life -- grandfathered. So if they bought them to work then they are not badly affected. If they become injured or ill the city can buy them back at a reasonable compromise price (the city would make money by being able to sell one more annual license each year having bought that plate back). The city would make a lot more by selling annual licenses direct to drivers and it would be ongoing income. They would have tighter control over supply.

Those who have them stockpiled to rent out could either see them become worthless or sell them back to the city  at a price still higher than what they paid. Yes they get to lose the right of expoitation they have had but they don't lose anythign other than ridiculous profits from speculation. The city can afford to buy these because they will have a new stream of income from annual licenses.

Just to show how much money the city could gain, just think that the monthly amount drivers now pay to use a plate is more than the price the city sold the plate to the speculator in the first place. As I say when that buyer ends up being a driver you respect them and leave it in place but you cut the market for non drivers away and return that to the city.

Frankly it is unheard of for the city in any other context to create a license and then sell that to third parties to mark up as they wish. This is a popular model but that does not mean it is not defective.

I do not accuse the city of corruption but I suggest that whomever created this crazy system in the first place may have done it for corrupt reasons. And this was not invented in Ottawa. Just becuase this is what other places do does not mean it is a good model for Ottawa -- the city or the public. Same is true of the other Canadian cities.

 

ygtbk

@ Sean:

I think we mostly agree. We both think the current taxi system is a cartel. And we agree that it's not unique to Ottawa - other cities such as NYC have the same system in place (in NYC it's "taxi medallions"), and it does not benefit the drivers - or the passengers.

I think the solution (from a standing start) is to not have such a system in the first place. How to fix the existing system is tougher. I think that's where we differ.

ygtbk

And at risk of making things more confusing:

https://www.thestar.com/business/2016/08/18/uber-to-use-autonomous-cars-to-haul-people-in-next-few-weeks.html

Getting all the bugs (software and legal) out of self-driving cars would be both interesting and disruptive.

Mr. Magoo Mr. Magoo's picture

Quote:

The plates are sold to companies and individuals who own in some cases hundreds of them and then rent them out to drivers who pay much of what they want to the middle person.

Many cities work this way.

Have you looked into this?

Here in Toronto, if new plates are offered, they go to the "next in line" on the Drivers List (a waiting list of people who've applied for a plate).

To get on the waiting list, you must:

1.  have driven a cab, full-time, for at least the last three years

2.  not have owned a cab (which is to say, a taxi plate) in the last five years

So it's not as though the City is aiding, abetting, or even encouraging any "cartel" to own multiple plates.  If you own ten plates then at least nine of them had to have been privately purchased at market prices.

If the City makes those ten plates non-transferable (which I believe Toronto plans to do by 2025) then that's about a million dollars worth of investment that's now worthless.  And no, I don't believe that the City has any obligation to compensate them for it.  Plus, they've got several more years to either rent them or sell them to recoup that investment.  It might not be as much as they hoped for, but speculation naturally carries risks.

Sean in Ottawa

Mr. Magoo wrote:

Quote:

The plates are sold to companies and individuals who own in some cases hundreds of them and then rent them out to drivers who pay much of what they want to the middle person.

Many cities work this way.

Have you looked into this?

Here in Toronto, if new plates are offered, they go to the "next in line" on the Drivers List (a waiting list of people who've applied for a plate).

To get on the waiting list, you must:

1.  have driven a cab, full-time, for at least the last three years

2.  not have owned a cab (which is to say, a taxi plate) in the last five years

So it's not as though the City is aiding, abetting, or even encouraging any "cartel" to own multiple plates.  If you own ten plates then at least nine of them had to have been privately purchased at market prices.

If the City makes those ten plates non-transferable (which I believe Toronto plans to do by 2025) then that's about a million dollars worth of investment that's now worthless.  And no, I don't believe that the City has any obligation to compensate them for it.  Plus, they've got several more years to either rent them or sell them to recoup that investment.  It might not be as much as they hoped for, but speculation naturally carries risks.

I thought I was clear that I was speaking of Ottawa. No, I have not researched the situation in Toronto.

I don't like the model generally as I have explained but the one I am speaking about specifically is Ottawa.

Sean in Ottawa

ygtbk wrote:

@ Sean:

I think we mostly agree. We both think the current taxi system is a cartel. And we agree that it's not unique to Ottawa - other cities such as NYC have the same system in place (in NYC it's "taxi medallions"), and it does not benefit the drivers - or the passengers.

I think the solution (from a standing start) is to not have such a system in the first place. How to fix the existing system is tougher. I think that's where we differ.

How would you fix the current system? When I say have the city buy them back at reasonable rates this is something that allows the city to do well (it then re-licenses them in a better system so gets revenue to pay for the buy backs). It allows the drivers to keep them and sell them back to the city (yes at a loss but not total loss) and if they bought them to use them this is not devastating. It does leave the middle company that was jacking the prices out of pocket but only of their obscene profits becuase they did not pay these prices to get the licenses.

From there annual licenses to drivers.

What's wrong with that?

Mr. Magoo Mr. Magoo's picture

Quote:
I thought I was clear that I was speaking of Ottawa. No, I have not researched the situation in Toronto.

I get that you were speaking about Ottawa.  I was just asking whether what you say was based on research about the situation in Ottawa.  I guess I mean, are you pretty sure that Ottawa is selling new licences to cabals and speculators rather than drivers?  Or did the multi-plate owners in Ottawa also have to buy their plates on Kijiji?

ygtbk

Sean in Ottawa wrote:

ygtbk wrote:

@ Sean:

I think we mostly agree. We both think the current taxi system is a cartel. And we agree that it's not unique to Ottawa - other cities such as NYC have the same system in place (in NYC it's "taxi medallions"), and it does not benefit the drivers - or the passengers.

I think the solution (from a standing start) is to not have such a system in the first place. How to fix the existing system is tougher. I think that's where we differ.

How would you fix the current system? When I say have the city buy them back at reasonable rates this is something that allows the city to do well (it then re-licenses them in a better system so gets revenue to pay for the buy backs). It allows the drivers to keep them and sell them back to the city (yes at a loss but not total loss) and if they bought them to use them this is not devastating. It does leave the middle company that was jacking the prices out of pocket but only of their obscene profits becuase they did not pay these prices to get the licenses.

From there annual licenses to drivers.

What's wrong with that?

Fixing broken things is difficult. I would suggest that co-ops of independent taxi drivers (probably using Uber-like technology) could compete with the existing system, and customers could choose between them and the existing system. I would also prefer that to the extent licences were required (not obvious that they are), that they be provided at cost - I see no reason why the city should take in excess revenue on them, since the city is not providing a service.

Sean in Ottawa

Mr. Magoo wrote:

Quote:
I thought I was clear that I was speaking of Ottawa. No, I have not researched the situation in Toronto.

I get that you were speaking about Ottawa.  I was just asking whether what you say was based on research about the situation in Ottawa.  I guess I mean, are you pretty sure that Ottawa is selling new licences to cabals and speculators rather than drivers?  Or did the multi-plate owners in Ottawa also have to buy their plates on Kijiji?

One individual, Marc André Way and his family own 87 plates personally. He is CEO of Coventry the company that dispatches taxis including Blueline. His company owns another 64. No they did not buy them on Blueline. There are 1118 plates total.

Almost half the plates in Ottawa are owned by people who have just one -- the other half are people with multiple plates -- clearly not drivers.

There is something screwy when the company that dispatches drivers owns plates; sells plates to drivers; leases plates; and the CEO of that company independently also own a slew of plates. The conflicts of interest are legion.

Mr. Magoo Mr. Magoo's picture

It's as zany as the CEO of a factory owning the machines in that factory.  A taxi plate isn't a taxi DRIVER'S licence, it's a taxi OWNER'S licence.  I'm not saying it's better if a non-driver owns a cab/plate, but it's not really different from a carpentry company owning the saws and drills.

But I'm still asking the same simple question -- only now I can use Mr. Way as the example -- does he own so many plates because the City of Ottawa preferentially sold those plates to him or his corporation/cabal?

Or did he buy them on Kajiji?

josh
Sean in Ottawa

Mr. Magoo wrote:

It's as zany as the CEO of a factory owning the machines in that factory.  A taxi plate isn't a taxi DRIVER'S licence, it's a taxi OWNER'S licence.  I'm not saying it's better if a non-driver owns a cab/plate, but it's not really different from a carpentry company owning the saws and drills.

But I'm still asking the same simple question -- only now I can use Mr. Way as the example -- does he own so many plates because the City of Ottawa preferentially sold those plates to him or his corporation/cabal?

Or did he buy them on Kajiji?

Well here you have a huge point so let's think about it for a moment. It is a taxi owners licence. so why does a dispatch company hold those licenses when the drivers are the owners of the taxis?

I cn agree -- the one who invests in buying the taxi should be the one who is licensed directly by the city to drive it.

This is not the regime. You buy a cab worth ten's of thousands of dollars and you don't get to license it. Why does anyone on a progressive board that values labour at least as much as capital even try to defend this?

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