A couple of days ago, Dubner posted a challenge: think about activities that are legal when done for free but become illegal when they are done for money. Despite my recent post on the injustice of the taxi medallion system, not one of the 100+ responders to Dubner’s appeal mentioned that the simple act of driving passengers around is a crime — when it is done for cash.
Granted, you can get special government dispensation to do this, but this often doesn’t come cheap. Government not only requires permission to operate a taxi but often enforces draconian limits on cabs’ numbers. Hence the right to carry passengers for cash is often outlandishly expensive though the identical activity is perfectly legal and quite harmless, as long as a couple of pieces of paper don’t change hands.
This doesn’t seem quite fair to me, though I guess the tepid reader response shows that taxi regulation is not quite the pulse-pounding roller-coaster ride of an issue I thought it was. But even if it won’t be eliciting sit-ins and hunger strikes any time soon, I still think the medallion system deserves a serious second look.
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As with many other things, though, it’s really only criminal if you operate as a business or for strangers, isn’t it? I’ve given a friend $20 in gas money in exchange for a ride somewhere, but I don’t equate that to hiring a cab and I don’t think that necessarily runs afoul of the law. Perhaps my friend can’t solicit the business, but that’s not the same category as prostitution, for instance, where exchanging money for sex is criminal regardless of the circumstances.
Then again, maybe it’s still illegal but never enforced, the same way as burning a CD or two of music for your mother won’t get you sued by the RIAA the way Internet file-sharing will, even though the difference is quantitative rather than qualitative.
Ostrom is really good on this point — sometimes government institutions are a good way to solve commons tragedies, sometimes not. It’s not hard to see how New York culture lends itself more to the former when it comes to traffic.
That prior post was just a stalking horse for the Institute for Justice?
Taxi medallion issues can be pretty interesting, if you care to look. As I say, “If”.
First off one would assume that the most important aspect of taxi-ing is that a person has a vehicle, and would like to *use* it and make a few bucks. Hence, yea old hackney carriage. But taxi-ing today is *not* about the vehicle, in fact the vehicle is the *lest* expensive part of the whole operation. Drivers could drive brand-new Caddies and it wouldn’t make a dent in the economics: The driver income is greater than the vehicle worth, the insurance is greater than the vehicle cost, the payments on the mortgage on the medallion is greater. Even the gasoline far surpasses the value of your good ole iron.
So what’s it all about? Welp, back in the day, Mrs Piscapo (honest) sued in court to retain the medallion assigned to her husband (for being a WW warrior) when he died. It turns out she had been doing the driving for many years, and just because her fellow died, she argued, she should lose her license? “Not fair!” sayeth the judiciary, and lo and behold, it became an “assignable license”. Welp, add that to yea old coppers being able to Limit the number of taxis, (traffic enforcement being their territory, along with general supervision of the population), we have, unintended to be sure, a situation of supply and demand. See? Easy. Classic bureaucratic capitalism growing out of its own inertia, sez I.
But meanwhile, back at the ranch, that is to say, *here*, back at FreakOnomics, I say unto thee: “It’s too late now, you can’t take it back.”
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Ah. Another way to say my previous Comment is:
“Mrs. Piscapo always wins, not matter whatever else, Mrs. Piscapol will always win out.”
This is a hard and fast universal rule, and yes you may quote me on it.
I always feel safer with a registered taxi driver. If the driver misstreats me in anyway I can report him to his company and the taxi commission. I’ll pay a little extra for that!
In Quincy, IL a guy started giving rides home from the bars. It became so popular that he bought a small bus. That’s when it became an issue
Just search “courtesy rides Quincy” to find out more.
The Dubai taxi regs remind me of the situation in Orlando, FL, where (at least until a few years ago, haven’t checked lately), taxis with in-town licenses and cabs that worked the I-Drive hotels could not line up for passengers at the airport, so you had what cabbies call “maximum deadheading.” The entire regulation scheme appeared to be a confection of Paul Mears, who owned the major cab, sedan and bus companies serving the area and also served on the regulatory boards. The drivers were effectively indentured to him–paying to rent the cars, received dispatches, and even gas.
The take-home lesson for me was not that regulation is bad, but that regulation is bad when the regulators are captured by monopolists.