Cab Drivers Angry About Having To Compete With Free As Well

from the it's-called-competition dept

Thu, Jun 25th 2009 2:39pm — Mike Masnick

There's just something about having to compete with "free" that gets people really, really angry. It's silly of course. In traditional competition, if someone lowers their price and it's lower than your own costs, you simply have to figure out other ways to compete (such as by adding more benefits and value). It's the same thing when you compete with free -- but for some reason, people see that big $0 and they stop thinking, not realizing it's no different if someone is charging $0 or if they're just charging less than you. You need to figure out some way to compete. EEJ points us to a story from a couple months back, noting that in Tampa, Florida, some entrepreneurially minded folks have started up free transportation services using electric vehicles. The operators of these vehicles make their money by wrapping the cars in ads and accepting tips. Other than that, the ride is free.

But... wouldn't you know it? Local cabbies are pissed off and demanding regulations to stop this sort of competition. Rather than coming up with better ways to compete, they feel the need to run to the government and get protectionist help. Doesn't this sound familiar? Amusingly, it's actually taxi regulations that have created some of this problem in the first place. At least one of the electric car owners notes that he approached the city about getting a license, but he was denied, because of the artificial scarcity the city places on cabs via such regulations (which help keep the cost of a cab ride artificially high). But... the loophole is that the regulations only apply to hired transportation. If the transportation itself is "free" then there are no regulations.

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Filed Under: business models, cab drivers, competition, free, licensing, tampa

42 Comments

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Anonymous Coward, 25 Jun 2009 @ 2:43pm

So the electric cars run for 6 months or a year until they run out of money and disappear, in the mean time the cabbies suffer greatly and some of them go out of business as well.

Free - just means someone else is paying for it.
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Dark Helmet (profile), 25 Jun 2009 @ 2:53pm

"But... wouldn't you know it? Local cabbies are pissed off and demanding regulations to stop this sort of competition."

They've also insisted on the internet cease linking to their vehicles. They seem kind of confused...
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Anonymous Coward, 25 Jun 2009 @ 3:05pm

replace "buggy whips" with "taxi cabs".
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RD, 25 Jun 2009 @ 3:07pm

Hey..
Hey Anonymous A-Hole....Piss off. If someone wants to GIVE something away, TOO FUCKING BAD! Neither you nor I nor cabbies get to LEGISLATE that. Its called being a decent human being and trying to HELP people instead of LEECH from them. You might want to try it sometime, though I doubt you have the faintest clue about it.
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Anonymous Coward, 25 Jun 2009 @ 3:13pm

Might they run afoul of hitchhiking laws?
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Ryan, 25 Jun 2009 @ 3:15pm

Re:
That's the entire point of innovation and capitalism--entrepreneurs constantly attempt new business ventures to gain market share and earn profit, to the benefit of consumers who get a better service. If they fail, then others can study the attempt and come back with something better. How can you possibly be critical of a venture in which entrepreneurs take on risk themselves by providing a better service, whether it lasts or not? You will certainly never be a success in life with that attitude, unless it is given to you.

On another note, this is instance #34,076,914 in the last year that I have read why most regulations are idiotic, anti-business, anti-consumer, and anti-taxpayer, yet I continue to read so much opinion that the fix to seemingly everything is "more regulations"...are people just stupid or what?
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Freedom, 25 Jun 2009 @ 3:19pm

What a great concept...
I had no idea that cabs numbers where artificially controlled to keep prices up. These free cabs are a great innovative idea. It may fail and it may hurt existing business, but what new idea in business doesn't ALWAYS do that. I constantly lose business to some new idea/provider that comes in - some succeed, most fail but in all cases I adjust to make money where we excel and roll with the punches. Why should cab drivers be any different than any other business.

If an idea like this flies, it could literally replace a good portion of public transportation and have it be financed in an ad supported way which is a game changer.

It is hard to believe this is America. Sounds to me like we are a bunch of protectionist whiners. Then again, I heard something about change. Awesome, change from a sound independent rugged society with a heavy dose of freedom to one that is losing freedoms every day, becoming totally dependent on the government, and with an ever increasing amount of entitlement thinking - yeah America!

Freedom
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Overcast (profile), 25 Jun 2009 @ 3:23pm

Re:
TV and Radio are free too - yet, oddly many companies in those areas have made quite a good profit, I do believe.
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Someantimalwareguy, 25 Jun 2009 @ 3:23pm

Re:
Interesting...but the next question would be: "How would this affect TAX revenues?". The scarcity of the cabs ensures higher fees, which in turn, guarantee higher revenues for the local government.

If you can solve the TAX issue for the government here, my take is that the cities would be linning up to get on the "free electric taxi" bandwagon so fast you would need to call in the Time Warp guys to record it...

JMHO
Mike
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Anonymous Coward, 25 Jun 2009 @ 3:24pm

Since The free rides have no meters there's no way to prove revenue. So either the Free Ride people are going to do business with little tax consequence - or the city will require a way to monitor income and tax the crap out of it
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Anonymous Coward, 25 Jun 2009 @ 3:29pm

Re:
@#1

it's called competition and that's how capitalism works, if you can't cut it then tough shit, don't call the rest of us for your pity party
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Anonymous Coward, 25 Jun 2009 @ 3:36pm

Re: Free Just means someone else is paying for it
What about air?
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Anonymous Coward, 25 Jun 2009 @ 3:46pm

Since they are being used as cabs (even though free) or public transport (like a free bus), they should be subject to all sorts of interesting rules. Certification, driver license requirements, tags, etc. I think this one is pretty much doomed from the get-go, looking good only because nobody has decides what class to dump them into. Once they get classified, the costs will go through the roof.
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Anonymous Coward, 25 Jun 2009 @ 4:03pm

The cabbies are.... whaaa.... Golf carts?
Electric Carts? Like Golf Carts? You gotta be kidding.
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Derek Kerton (profile), 25 Jun 2009 @ 4:07pm

Re:
Not so complicated. If they get ad revenue, then that is business revenue, and will be taxable. Problem solved.
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Anonymous Coward, 25 Jun 2009 @ 4:11pm

Here's an idea for differentiating....
Start with personable cabbies.

Tell me where the best place in town to get a pulled pork sandwich. Hamburgers and Steaks. Hotfries and wings. And shave that beard off, hippie!
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Some guy, 25 Jun 2009 @ 4:15pm

COOL!
Does this mean cabies will now take baths, learn to speak clear english, Drive safely, and heaven forbid... BE NICE!?!?

Nahh... Too easy.
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inc, 25 Jun 2009 @ 4:25pm

Re: Re:
well if there is less government then there is less need to levee taxes and thus problem solved. It sounds more like government run monopoly to prevent competition just because tax revenues are threated. Besides taxes are like squeezing a balloon.. they go down one place and go up everywhere else.
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Yuniverse (profile), 25 Jun 2009 @ 4:45pm

Re: tax
Sure they don't have meters, but they don't earn profit through the rides, but through the advertisements. So the gov can tax their ad profits, and the tips should be reported, too.
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Anonymous Coward, 25 Jun 2009 @ 5:10pm

Air will be taxed as soon as they find a way to do it...
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Anonymous Coward, 25 Jun 2009 @ 5:38pm

Re: Re:
> are people just stupid

You bet!
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Anonymous Coward, 25 Jun 2009 @ 5:40pm

Re:
IANAL, but I would assume hitchhiking law only covers instances where the hitchhiker initiates the process. If the driver stops by on his own and asks if you guys want a ride, that's entirely different animal.
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bob, 25 Jun 2009 @ 5:41pm

NY NY
I would love to see this happen in NYC
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Anonymous Coward, 25 Jun 2009 @ 5:46pm

Cabbies are the biggest crooks on the face of the earth. I welcome any service that offers competition.
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Chris, 25 Jun 2009 @ 6:41pm

i live in tampa and these rides are not everywhere. They are in a very small portion of town and are more in areas that you will need a quick 5 minute hop or at most 10. The cab companies still get enough business elsewhere and the only place i see them really affected is the weekend night hotsposts. I recently got a dui and have been a cab user pretty regularly since then. they are more widespread and faster than the small electric cars. This is simply an example of the cab companies not willing to change thier opperating style to encourage thier use over the electrics in areas where the electrics are present. I have taken a few electric rides and the drivers are polite and courteous and the ride is generally more pleasing than a cab. take those drivers and give them a cab company and that company would probably have no problem competing with the electrics.
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CleverName, 25 Jun 2009 @ 6:57pm

Next thing you know they will want to outlaw cashcab.

And carpooling is totally destroying their business.
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Anonymous Coward, 25 Jun 2009 @ 9:08pm

Re:
It would be a livery vehicle, just like a cab or bus, and thus would fall under the same regulations. Just because they do not charge passengers does not clear them of the laws. Unfortunately. Where I'm at, the number of cabs isn't regulated, but the city sets the price they can charge.
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Rekrul, 25 Jun 2009 @ 9:22pm

I remember reading a story several years ago about a woman who decided to make a little extra cash by baking small things like muffins and such, then selling them around her neighborhood from a cart. Naturally the cops stopped her and told her that what she was doing was illegal if she didn't have a license. She looked into getting a license and the various fees she would have had to pay were so high that there was no way she could make a profit. Besides the business license, she would have had to have her kitchen certified by the health inspector, upgrade the kitchen to commercial standards, etc.

So she went ahead, baked another batch and headed out with her cart. When the cops showed up again and tried to stop her, she explained that she was giving the baked good away, not selling them. The cops said that was ok...

America, land of opportunity.*

*For those who can afford it...
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Anonymous Coward, 25 Jun 2009 @ 9:33pm

Re:
Free means lower overhead costs and margin being offset by other revenue sources. You clearly do not know what you're talking about. If something is free, noone else is paying for it. If something is a gift, then someone else paid for it.
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Mark, 25 Jun 2009 @ 10:31pm

Are these vehicles duly licensed as cabs? Where I live, there are only so many slots available, so the pool of available rides doesn't overwhelm the amount of ride providers.
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Eldakka (profile), 26 Jun 2009 @ 12:40am

Re:
I think the article already covered this aspect:

At least one of the electric car owners notes that he approached the city about getting a license, but he was denied ... the loophole is that the regulations only apply to hired transportation. If the transportation itself is "free" then there are no regulations.
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Eldakka (profile), 26 Jun 2009 @ 12:43am

Re:
the article addressed this:

At least one of the electric car owners notes that he approached the city about getting a license, but he was denied ... the loophole is that the regulations only apply to hired transportation. If the transportation itself is "free" then there are no regulations.

i.e. you don't need a taxicab license.
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Anonymous Coward, 26 Jun 2009 @ 3:35am

Re: Re:
Why would he read the article, let alone the information in the links provided? It's much easier to give an opinion based on reading a headline...
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Online Sports Betting (profile), 26 Jun 2009 @ 7:06am

I agree with Coward
The free model will need to evolve into something different or will die out. Either electricity and maintenance costs will be higher than tips from passengers and advertising dollars or cabbies will bully them out.
If you just put a sticker on a bumper for advertising - there is no way to measure its impact, and in these hard economic times unless you prove that those ads are working - the ad dollars will dry up fast. One way would be to do more proactive advertising by selling in these free vehicles advertisers products - that could be selling tickets to the shows, exhibitions, etc..
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hegemon13, 26 Jun 2009 @ 7:47am

Re:
"Free - just means someone else is paying for it."

Yeah, the advertisers. Next time, rtfa.
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hegemon13, 26 Jun 2009 @ 7:56am

Re:
There are very good reasons for health regulations, and it is not to create artificial scarcity. After all, you don't see any shortage of restaurants around, do you? Restaurants cut corners whenever possible to save overhead and food costs. Without health regulations, I shudder to think what we would be eating. The regulations keep restaurants "honest," and shut down those who threaten the health of their patrons.

It is very possible to make money by selling baked goods. This woman just was not willing to make the necessary commitment. She was a hobby baker, and she cannot possibly have expected to make much money that way. The opportunity is there, she just chose not to take it. The opportunity she had was just a hobby, nothing more.
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Rosedale (profile), 26 Jun 2009 @ 8:46am

What about walking is the competition as well :-)
The other day I was stuck about 3 miles from my place in Boston just after the public transit closed down (Don't know why they do in Boston, but 12:30 is last call how ridiculous is that?). Anyway it was late, 1:00AM and 3 or 4 miles is plenty of distance to go. Needless to say that this is a huge time for cabs. They rake in tons of money from stranded movie watchers or drunk people. I didn't bite. I would rather walk, for free, than ride in a cab. Fortunately I ran into a late going bus, the very last one, and made it home. But hey by their logic they should have sued me. After all since I am an able bodied person I competed against them with free with my own two feet (how dare my feet do that). Maybe they should have people come by and whack people in the knees to get their business back ;-)
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Ryan, 26 Jun 2009 @ 10:05am

Re: Re:
Who are you to tell her what she can do or how good an opportunity she has? It's not an 'opportunity' if you don't give it to her. Let her customers decide whether they trust her health precautions. How does it make sense to prevent her from selling at cost, but not to give them away? She'd surely get as many or more people eating her food in the second instance, it just wouldn't be sustainable unless she wanted to take a loss.

Also, like I said above, there's no reason why we need government regulations; optional private regulations would work just fine.
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No, 26 Jun 2009 @ 10:36am

F the cab drivers
If driving a cab wasn't profitable no one would do it.
They need to do this in NYC. They should put monitors that play commercials - CAPTIVE AUDIENCE!
In many elevators they have monitors that show news items surrounded by advertising (and sometimes full commercials) and they make money.
NYC gov makes money by charging a lot for taxi medallions (hundreds of thousands) because they know cabs make a lot of money. I know someone who quit an office job to drive a cab because he made so much.
FREE transportation should be an option.
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Steve, 26 Jun 2009 @ 1:52pm

Re:
No shit. If you don't watch where they're going like a hawk, they'll do their level best to run that meter up. As soon as you ge3t on the phone or something, all of a sudden you turning down some side street that's bumper to bumper with construction or some such thing. Fuck cab drivers. Compete or go home.
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Anonymous Coward, 11 Aug 2009 @ 10:28am

Re: What a great concept...
"I had no idea that cabs numbers where artificially controlled to keep prices up."

Because we know we can trust the mainstream media to inform us of the issues right?
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Sean, 19 Aug 2009 @ 9:48am

Cab Drivers
That's it! I'm going to start CashCart and make this idea popular again! Citizens will fully support this as long as they have the opportunity to answer some easy questions on their way to a bar where they will then have plenty of fresh cash to trashed at the local pub.

At this point, the Tampa, FL government has made sure that these "Free Cabs" do not have a license to conduct business. Someone now needs to sue the local government to bring these carts back to us as free market capitalists who are losing out to lazy socialists/Obama democrats who want nothing more to control your healthcare.
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