No Free Competition Allowed In Tampa Bay Taxi Business

from the competition-is-bad dept

Thu, Aug 13th 2009 9:22pm — Mike Masnick

Back in June, we wrote about how cab drivers in Tampa Bay were trying to get the city council to outlaw new competitors in the form of free ad-supported transportation from some owners of electric vehicles. Like so many cities, Tampa Bay's cab system operates on a license system, which the city and the existing cabbies work closely to limit, and do make sure prices remain artificially high. However, the free electric vehicles had thought they got around this by noting that the permit system only applied to cabs for hire. Since they weren't charging, they weren't covered. Until now.

EEJ alerts us to the news that Hillsborough County transportation officials have announced that the free electric vehicles need to get permits as well -- except, oh by the way, there aren't any available. Too bad. At least one of the electric vehicle operators plans to go to court to fight this, but it may be an uphill battle. While the officials are hiding behind "safety" claims, the truth is that it's a typical move of regulatory capture by the cab companies, limiting competition so they can keep their prices artificially high and avoid any sort of business model innovation.

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

34 Comments

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Anonymous Coward, 13 Aug 2009 @ 9:38pm

Mike, you might want to ask a taxi driver about the economics of running a cab: Hint, they aren't making a ton of money.
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Anonymous Coward, 13 Aug 2009 @ 10:02pm

Re:
They should be protected by the government because they aren't making a lot of money?
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Anonymous Coward, 13 Aug 2009 @ 10:09pm

Re:
So what? I'm not making a ton of money either. I dont expect anyone to do anything when I cry about it.
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Trails, 13 Aug 2009 @ 10:09pm

You got some splainin to do
Even taking as granted your statement, I don't see what bearing that has?

The people making money off cabs included:
- the driver (duh)
- the cab company
- the city, via licenses

Maybe not "good money" but that still shouldn't preclude competition in and of itself.
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barrenwaste (profile), 13 Aug 2009 @ 10:16pm

Re: AnonCow
Mike did not state it was the cab drivers themselves, he stated it was the companies. Two totally different entities. The cab drivers are simply the employees, with as little say in the management of the company as any other hourly/comission employee.

Just as Mike said, this is a typical and easily forseen action by the cab companies. That the people who run the electric vehicles didn't see this coming speaks volumes about thier capabilities.

That said, don't think I am defending the cab companies. Thier attempt is only one step removed from outright thuggery. In fact, it's the economical equivalent to knee breaking and curb stomping.

It is maneuvers like this that make me shrug and say, "Eh." whenever I hear of someone breaking certain laws. I know the laws were enacted not for public safety/protection but to further the monetary goals of political/economical entities. Especially since in most cases those laws are directly in opposition to my wants and needs. If 90 percent of America isn't felons yet, it soon will be.
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sexydiverguy (profile), 13 Aug 2009 @ 10:58pm

Taxi Competition
I cant'tspeak for Tampa Bay taxi drivers but the average income for a driver, not an owner in my city in Western Canada is $45,000-$ 60,000 a year. Owners make more.Our city has 3 taxi companies and they all charge the same fee's as the fee's are set by the taxi union and the city council.

In the end it comes down to customer service and supply and demand...in lots of cases its cheaper to take a limo.
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Anonymous Coward, 14 Aug 2009 @ 12:47am

Re:
yeah but if someone thinks they can do it better it's not the job of the government to stifle innovation and competition in the marketplace. The individual cab drivers are not the issue here. Do you think most cabbies own the cab they drive? It is the cab companies operating with a virtual monopoly that are upset about losing those dollar bills every time the meter gets rung up.
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Anonymous Coward, 14 Aug 2009 @ 12:51am

Re: Re: AnonCow
Curb stomping?

can we take it easy with some of the hyperbole?
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HolaJohnny (profile), 14 Aug 2009 @ 2:34am

I do not work for a cab company...
But I work in a industry that serves a niche market that is still dominated by union labor. Unlike cabs/cab drivers/cab companies. My industry can and will leave if sufficiently motivated to do so. Depending on your viewpoint unions are the devil or savior. Within my own family I find myself fighting a battle to justify unions in defense of the blue collar worker in what often now is a white collar dominated political landscape in the U.S. The reason I bring this up is Unions are still relevant to defend the common man. But they are not here to defend and stifle efficiency or innovation. If you are a skilled tradesmen, you should earn a wage deserving of your experience and talent. But in this situation it sounds like there are abuses of union power... it is counter to being a old school union man. I'm not though I've been trained among them. No man who puts in a hard days work should back action like this... We put in a hard HONEST days work. If support this monopoly type behavior we are no better than the corporate machines that we fight to keep independence from. Who do you work for? Your brothers who work beside you? Or an agenda. I take pride in being a craftsman. That is why I deserve the wage I earn. Not because I'm a shill to the corporate greed or what some would like to ignore the big union greed. Be proud of your work and give a product that deserves more. Otherwise your just serving another master. Proud Union Local 32 Pipefitter.
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Jabberwocky (profile), 14 Aug 2009 @ 4:34am

Re: I do not work for a cab company...
You are speaking of the unions as some benevolent entities that operate solely to ensure honesty and pride are rewarded with good pay. The simple fact is that you earn a living wage because there is a market demand for pipefitters, not because of the artificial overhead added by the union. The unions were necessary in the era before the multitude of government regulations put in place to govern laborer safety and well-being. Now that the laws largely support the laborers, the unions have become parasitic, looking only to increase ranks to increase dues, and to stifle any competitive newcomers to their territory.

Your honest and proud philosophy should speak for itself, and if you are a skilled laborer in a skill that serves a market need, you shouldn't need a union to earn your keep.
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Anonymous Coward, 14 Aug 2009 @ 5:36am

Competition isn't an issue here - it's a level playing field.

If a vehicle used to transport the public (as a public service or other) is subject to inspections, they should all subject to inspections.

If a vehicle uses to transport the public (as a public service or other) requires a permit, they should all need permits.

A taxi is a taxi, regardless if you charge or not. They should all be subject to the same rules. The "free" taxis aren't a new business model, they are just an attempt to bypass the laws and rules put in place to protect the public and provide for safe, inspected transportation services.

It's cute - but it's dangerous in the end.
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Killer_Tofu (profile), 14 Aug 2009 @ 5:51am

Re:
Just since you don't seem to be paying attention, I am going to point this out to you again.
A level playing field is fine.
Vehicle saftey is all fine and dandy.
What is not cool, is saying that they need these licenses, but cannot have them.
They are actively denying them the licenses to operate.
You caught that right? Read the article at all?
This is just an attempt to stomp out competition.

Face it, if the vehicles were unsafe at all, the people wouldn't use them. Pretty simple. And word gets around lightning fast these days. The people will know. Saying that the only reason the government is doing this is for safety is laughable.
The idea that it is dangerous is laughable.
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Danny, 14 Aug 2009 @ 5:56am

Re:
If it were about a level playing field then why are there suddenly no permits available to this new entity? A level playing field implies that everyone should get a fair chance which is not happening here.
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Anonymous Coward, 14 Aug 2009 @ 7:25am

Anybody who's ever been ripped off by a gypsy cab driver knows why cities have taxi commissions. It's all a real sunshine and rainbows idea until somebody starts driving an unlicensed electric cab and gouges foreign tourists at the airport.
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ChrisB (profile), 14 Aug 2009 @ 7:42am

Re: I do not work for a cab company...
I have friends at Canada Post and in teachers unions and the corruption is unbelievable. It is impossible to fire incompetent employees and the union management is full of lazy people who aren't really interested in helping the union members. Hopefully, this recession will bust some of these groups up. I don't get a guaranteed pension after 15 years, so city employees shouldn't get one.

In reality, the powerless people who need unions, like Walmart workers, don't have them and people who don't need unions, like skilled tradesmen who are always in demand, have them. It makes no sense to me.
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Anonymous Coward, 14 Aug 2009 @ 8:08am

Re: Re:
IN many places, there are a certain number of taxi licenses available. That number is balanced to provide decent service levels, to keep street traffic at a reasonable level, and to assure that there is a reasonable living to be made from the work.

Unlimited taxi licenses would be like unlimited food cart licenses - at some point, there would be so many carts that nobody would make money. The customers would be satisfied for a short amount of time, and then suddenly most of the carts would disappear, and the remaining ones would double their prices.

Taxi permits are a scarcity, isn't that what techdirt is all about?
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Enric Suarve, 14 Aug 2009 @ 8:29am

I can't speak for Tampa Bay...
(or even the US), but we have a similar licensing system in most cities in the UK - there are several reasons for this:
The taxis all have to pass rigourous safety checks
Taxi drivers have to pass certain criminal records checks
The fares are fixed at an agreed rate
In some cities drivers have to pass tests on knowledge of the area (in London they are practically tourist information centres).

Mainly it basically reduces scalping as stated by the AC above, the numbers of licenses are kept to a strict level to ensure that since the city is limiting the price of the fares, there is still enough work to keep drivers employed and the number of licenses is usually reviewed by drivers and the city periodically. You can usually tell the cities that have low regulation as the taxis tend to be shittier, more expensive and less reliable (just personal experience).

There are different licences for what we call Hackney Carridges (who can pick up off the street like a 'regular' taxi and radio cabs which are only allowed to pick up by appointment) In some cities radio cabs are allowed to vary their fares within a range or below a limit.

One thing to remember is that taxis effect an entire cities image - I've been lucky enough to have travelled extensively with work and still harbour ill feelings at the back of my head for some cities, based partly on being dumped in the middle of nowhere by some scalper who's just charged over the odds for a ride that actually turned out to be around the corner.
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Anonymous Coward, 14 Aug 2009 @ 9:02am

Taxi licenses are also about personal injury protection. I can't speak to Tampa's practices, but I worked for a municipality in investigating the cab companies who applied for licenses. They did a pretty thorough public records search for ongoing litigation, debt obligations, property ownership, unpaid taxes, etc. At least where I live, the taxi licenses are not a rubber stamp, they provide some assurance of financial stability as a proxy for ability to pay personal injury damages. By that standard, it doesn't matter if taxis are free or paid. A free taxi are just as likely to injure someone as a paid taxi.
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nasch (profile), 14 Aug 2009 @ 9:12am

Re: Re: Re:
IN many places, there are a certain number of taxi licenses available. That number is balanced to provide decent service levels, to keep street traffic at a reasonable level, and to assure that there is a reasonable living to be made from the work.

Unlimited taxi licenses would be like unlimited food cart licenses - at some point, there would be so many carts that nobody would make money. The customers would be satisfied for a short amount of time, and then suddenly most of the carts would disappear, and the remaining ones would double their prices.

The market is a much better way to deal with these problems. Artificially setting the amount of supply is a bad thing. If licenses are required at all, they should be available to anyone, subject to safety inspections.

If there's a glut of supply, prices will drop to a market equilibrium. Great! If the market is already saturated (prices are low enough that it's not attractive to get into the business) then there won't be more permit applications anyway. If supply is currently artificially low (probably the case) then prices are artificially high. Why should the government support the taxi companies at the expense of taxi passengers? It's just regulatory capture like Mike said.

And if I'm not mistaken the city is Tampa. The bay is Tampa Bay.
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Javarod (profile), 14 Aug 2009 @ 10:17am

Re: Re: Re:
Or it'd be like Phoenix. Taxi insurance starts at $350/mo, weights and measures taxi 'license' $24/yr, you can run any car you want, and all you need is a D class license, a meter, and name/phone number/rates posted on the door in approved size. Nobody makes money out here but the big companies, and those that have an established clientele (a cheap weekly lease is $250).
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The Rage, 14 Aug 2009 @ 10:49am

Break up the gov't backed cartels
Whether it's cabbies, labor unions, or banks, doesn't matter, we need to break-up cartels by allowing competition.We don't really limit foreign competitors from dumping goods here via GATT and Nafta, why should we then limit competition within our own borders. Teddy Roosevelt, perhaps our greatest president (as he trutly believed the words of his sworn oath) to protect us against enemies both foreign AND domestic) by taking on the trusts, the railroad monopolies, the banks.

Find out via an FOI request how much your local politicos got in "campaign contributions" from the cab lobby then OUT 'EM via talk radio, the blogs, etc. A contribution is just a bribe by a prettier name.
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HolaJohnny (profile), 14 Aug 2009 @ 11:22am

Re: Re: I do not work for a cab company...
I would hoped you would have read a little deeper. Unions are not benevolent and my experience has been they are bloated. They serve a purpose but only barely in some cases. I don't need a union but at times it proves necessary... sadly. The regulations are there now that is correct but that does not mean there aren't many supervisors and even companies just as willing to demand you cast those aside for the sake of production. Just because its in writing somewhere does not mean OSHA or a government will stop you from getting fired because your not willing to work unsafely like the next guy in line.
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Anonymous Coward, 14 Aug 2009 @ 11:36am

Re: Re: Re:
"Unlimited taxi licenses would be like unlimited food cart licenses - at some point, there would be so many carts that nobody would make money."

This isn't just about "making money" this is about increasing aggregate output. The government intervention here is designed to lower competition and it reduces aggregate output. That's bad for society. To the extent that Taxi Cab driving is necessary the free market will provide it. To the extent it's not as profitable as the next best thing people will go to the next best thing. Otherwise you're forcing people to go to something less profitable because of artificial restrictions on taxicab drivers so someone else isn't making enough money as a result. This is basic economics.
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Anonymous Coward, 14 Aug 2009 @ 11:39am

Re: Re: Re:
"Taxi permits are a scarcity, isn't that what techdirt is all about?"

Techdirt is not about ARTIFICIAL scarcity. You obviously haven't been reading.
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Anonymous Coward, 14 Aug 2009 @ 12:07pm

Re: Re: Re: Re:
"Techdirt is not about ARTIFICIAL scarcity. You obviously haven't been reading."

Two words: Crystal Ball.
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maritimerider (profile), 14 Aug 2009 @ 9:05pm

Re: Re: Re: Re:
The major point that anonymous coward makes is well founded.
In my city, taxi licenses are capped for five yrs. Then after this time, a limited number of new ones become available for a short time. This is not to keep prices high. It is done so that drivers can make a meagre living.Whether an income of $20.00 or $100.00 in a day, their expenses have to be met. This can become pricey. I am more than happy to pay the fare with a tip. Next time you take a taxi, talk to the driver re capping or open licenses.You may be surprised with the info.As an afterthought,our city counsel still leans toward the customer. I rarely have to wait for a driver.
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maritimerider (profile), 14 Aug 2009 @ 9:16pm

Fact-In Canada, there is no union for cab drivers. Most drivers do own their own cars. They are self employed. They may be a limited company and drive with their own roof light or,rent a company's roof light and pay stand dues, the latter allows a driver access to fares from the company. Either way, they still are self employed. Enough already, get your facts straight.
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Lucretious, 15 Aug 2009 @ 9:18am

Re: Re:
its not "suddenly no permits available", that's how the Taxi business is run in most major cities. There are a set amount of "badges/licenses" available which allows badge/license holders to keep prices set. Its been this way for many, many years. Its not something that they invented just to keep these free guys out.
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Anonymous Coward, 22 Aug 2009 @ 8:55am

Re:
Yea I get gouged by free taxis all the time. They're like, "pay up, asshole, you owe me $0.00" and I'm like "what the fuck, I thought it was free! I'm never coming back to this country again!"
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Charles Eldredge, 3 Sep 2009 @ 3:50pm

Free Taxis in Tampa
It's outrageous that business competition is being blocked in Tampa by our government.

The City of Tampa has a long history of crushing, or just plain making it impossible, to have a taxi in Tampa unless it is Yellow Cab.

Yellow Cab has had a monopoly for a long time. This is not the first time people have been stopped from competing with Yellow Cab. A look into the requirements to start an independent taxi, or even a new taxi company, in Tampa, makes it clear that something is seriously wrong in the city of Tampa.
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Eli, 17 Nov 2009 @ 8:31am

Free Electric Taxi Service
Once again, if you can't make money for the government (in this case local government) you can't have a business. This just goes to show how business innovation can be stiffled by our greedy and bureacraticly challenged elected officials.
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Jaspreet Singh, 13 Sep 2013 @ 3:16am

If you are planning to visit Chandigarh this year, get ready to embark on a journey that is sure to leave you in awe and an unforgettable experience. This is the first time you will ever come to explore modernized and well planned city in India. Get ready to enjoy the happy lifestyle as well as the friendly crowds. Hire a taxi in Chandigarh to move around and this is the best way to explore the city beautiful. The city was the dream of Nehru, the first prime minister of India and it was the French architect Le carburizer who helped make this dream a reality. The city is one of the most famous one in India and a well-planned one, free of chaos and disorder that you often get to see in other cities.
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taxi Service LA, 16 Jan 2014 @ 10:36pm

WooW
great info for all the taxis bossiness
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john, 4 May 2014 @ 12:35pm

Taxi
The monopoly limits the number of cab permits...thus stifling competition. Lets say they did the same thing to computer repair shops, or auto repair or hair dressers...in a free market economy the person with the best product wins, not the person with the best corrupt government officials in their pocket.....oh wait I forgot that I live in the land of the free and the home of the bought politicians
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