Taxi companies are against this kind of competition because of the licenses they had to pay in order to be authorized to take passengers. These start-up companies operate without such a license. I believe the same charge was brought against UberCab.
Taxi licenses are outrageously expensive. A driver in Paris told me his was 190,000 euros, and it can get even higher in touristic towns on the Mediterranean coast: http://www.licence-taxi.fr/prix-licence-de-taxi.php
You see the same thing in America. NYC and Chicago have taxi "medallions" (which are physical operating licenses affixed to the cars) and these are re-sold on secondary markets for well into the six figures since the supply is so limited.
They are considered legitimate investment vehicles (pardon the pun) with all the typical market phenomena (speculation, etc).
It wasn't explained in the video but I got the impression some sort of 'liberalization' of the licensing laws has occurred to make this possible.
I did some Googling and found some discussions about licensing liberalization in France but no specific mentions of how/when it was implemented (if it ever was).
It wouldn't surprise me if it were, though, since here in the UK getting a license isn't particularly tough (added: with some notable exceptions, see reply posts).. so maybe there's some EU harmonization going on in this regard.
What about "The Knowledge" required for London black cab drivers - which apparently takes between two and four years of study and exam attempts to pass:
[Edit: I sometimes wish they had something like this in Edinburgh - I've had to tell taxi drivers here where to go a few times and the taxis here are very expensive compared to Glasgow and London].
Good point. It's night and day between different areas. It's hard work to become a 'black cab' driver in central London, as you say. But just a few miles away in a different borough of London you can get a license with barely more than a criminal check and some other commonsense precautions (these are often called "minicabs" in London and can't call themselves "taxis" for a number of legal reasons). I used to do a lot of work for several south London cab firms and becoming a driver for them seemed pretty easy - you just had to do a certain amount of "account" work for free and you then got the lion's share of the remaining take. No "medallions" or crazy expenses beyond insurance and car maintenance.
I'm pretty sure minicabs can't pick up passengers on the street, only black cabs can do that. Don't minicabs have to rely on bookings through a central office?
My knowledge for outside of London is merely anecdotal as I never had any clients like that, but to the best of my knowledge, you're right for London. Outside of London, minicabs can use taxi ranks (in their area) and I'd be surprised if they couldn't be hailed in certain areas too (at least, I've seen it done in other large British cities).
In Paris, when the government proposed to allow motorcycle taxis and other modes of transportation (such pickup by taxis not from Paris and privately-owned shuttle buses) as legitimate ways to pick up passengers at the Paris airports (CDG, Orly), Paris taxi license owners organized a taxi-blockade of the airport. It was very effective. After a couple such blockades, I believe the proposed change was stricken from the law.
The whole thing was/is known as "Operation Escargot" -- Operation Snail.
I hope I have to eat my words one day, but I just don't see how any law involving "competition" in the Paris taxi scene could ever pass. Even small increases in the # of licenses will lead to taxi strikes (or the threat thereof), and the government/city back-off very quickly whenever that happens as you can imagine. The only way for it to happen would have to be through an out-of-France process, such as Euro-level (de)regulation or a competition proceeding (antitrust).
I'd love some more background for the video and any suggested liberalization of licensing (perhaps there is only minimal licensing requirements in Avignon in the first place, compared to Paris, e.g.).
edit: added "Paris" at the end of the last parenthetical.
"I hope I have to eat my words one day, but I just don't see how any law involving "competition" in the Paris taxi scene could ever pass."
Easy. If taxi drivers illegally obstruct public roads by "blockading", arrest and prosecute them. This is crime, not political speech. It is a broken political system where a minority can force an outcome by intimidating the public with violence.
'Taxi wars' is also current in Finland. Few young entrepreneurs tried to enter the market with moped-car taxis. Those teens were immediately choked out of existence with heavy handed bureaucracy. We've also had Maxi Taxis (a more serious venture), which entered the streets of Helsinki unannounced. They were trying to exploit a loophole (minivans registered as trucks) in the legislation. Besides heavy lobbying against them, they were constantly harassed and even physically blocked by taxis and their drivers (very radical approach in regards to current Finnish society). Maxi Taxis folded quickly as the legal loophole was closed in record time.
Our taxi licenses are cheap, but supply is artificially restricted. The Ministry of Interior decides how many taxis can operate in each town. Taxi licenses cost about 300 euros; processing expenses. Toughest prerequisite is a short (few weeks, cost less than 1k euros) taxi-entrepreneur course.
The Ministry of Interior resorts to micromanagement. They set the maximum number of licenses for each and every town based on estimated need (which is quite sensitive to lobbying). For example the current maximum number of licenses in Helsinki is 1386 (for a population of 590k). In 2008 100 new Helsinki-licenses were issued, and just as anamax commented above: It was protested with an argument "Cabbies don't make a "living wage" as it is". This number was reduced by 51 in 2010.
There are queues, but they are generally not very long (in Helsinki you might need to wait for 10 years, but many smaller towns have free spots which you can claim without delay). You can drive a taxi as a hired man as the license is vehicle-, not person-specific. Hired man gets paid about 30-40% of the turnover of his rides.
Both the number of licenses and fare rates are national monopolies. A ride of similar length costs the same in Helsinki as it does everywhere else. Rates are set by the Ministry of Interior.
No price competition and artificially restricted entry to market. Friction with modern society: heavy. Taxi monopoly might not be the first to fall, since we still have, e.g. state monopolies on gambling and liquor. Of these, the former could end soon thanks to the EU.
Here in San Francisco, some of the "old money" people control a large chunk of the medallions. The whole process is very opaque. Drivers usually rent the taxis from these owners; typically, it's $100 for an 8-hour shift, double that for weekends.
Sometimes I think about what would be a fairer scheme than locking away a medallion for life? One possibility would be to have 5-year Dutch auctions of medallions. This way the City keeps getting value out of the medallions, and can increase the supply as the population grows.
"One possibility would be to have 5-year Dutch auctions of medallions."
Or you could stop pretending the government can legitimately criminalize a harmless business activity at the behest of a rent-seeking cartel. Money is not obscene. Driving a customer from A to B in exchange for payment is not a crime.
Or you could stop pretending the government can legitimately criminalize a harmless business activity at the behest of a rent-seeking cartel.
I agree with you, to some extent. However, some level of regulation is necessary, otherwise "harmless" can quickly become "harmful". The case of South Africa is instructive.
In South Africa, the Apartheid government entirely deregulated the minibus taxi industry in the late 1980's. It was to be a cheap source of transport for the black population, since public transport links, particularly in newly established "white flight" areas were very poor (whites tended to have cars, blacks didn't). Also the idea was that individual taxi owner/drivers would help foster black entrepreneurship.
The best description of what happened next I've read is "the miracle of the 1980's turned into the nightmare of the 1990's". Instead of one-man one taxi, we got one owner, with many taxis. Taxi owners formed cartels, and violence in competition for routes led to murderous street warfare ("taxi wars").
The weakened state (1990-1996) was unable to intervene. Starting with the Mandela administration, attempts were made to re-regulate taxi operations, but were consistently stymied by the taxi organisations. Even as recently as the last 2 years, taxi owners, through road blockades (and a fatal shooting) managed to strong-arm the government into giving them control of a new Johannesburg bus system.
In any town and city in South Africa, overloaded, barely roadworthy taxis blast through intersections disregarding traffic rules, stopping dangerously, their drivers desperate to increase their takings, menacing their own passengers and other motorists with their aggression. Fatalities are not uncommon.
It goes without saying that every policy is contingent on a functioning government capable of protecting its residents from violence. You'd hardly expect the United States to have the same problems as violence-ridden South Africa, regardless of policy.
That said, I don't understand your reasoning. You claim that free-enterprise taxis are responsible for violence in SA. But if that government, according to your account, can't even maintain basic road safety, how could they possibly enforce a taxi monopoly? If they tried to set one up, they'd simply create a black market of cabs, which they'd have no control over. If anything that should be worse; "illegal" cabs would evade police and would not undergo whatever licensing/safety checks ordinary cabs get.
(On a tangent, a state-enforced cartel is quite analogous to the dystopia you describe. Instead of private businesses using mob violence to "defend" "their" turf, the police enforces it for them. Same crime, only institutionalized, sanitized, and socially acceptable.)
Yes, they lost control of road traffic enforcement as well, but not to the extent that they lost control of the taxi industry. Having some form of regulation would have kept the taxi operators busy evading the state rather than acting with criminal impunity (maybe even behaving better to not arouse suspicion), a better result than what actually happened.
And the state is stronger now than it was in the past, but the legacy of deregulation lives on - getting the genie back into the bottle is harder than letting it out.
Same crime, only institutionalized, sanitized, and socially acceptable.
"Sanitized and socially acceptable"...sounds good to me.
I generally agree with you; but you do need some controls, otherwise SF would be overrun with such drivers. The capacity of the streets is limited, you know. The idea in general is to have more people using public transportation, as it is healthier and better for the environment.
But: given the fact that we _do_ have some sort of a licensing scheme (medallions), it would be better to have short-term leases, than lock away a medallion in the pocket of some well-connected dude who makes a killing renting it out.
"but you do need some controls, otherwise SF would be overrun with such drivers."
That's a pretty laughable scare-story if you think about it. Streets literally clogged with taxis? They'd be out of business long before that.
Price controls do not work. There is no legitimacy for central planning in business activities, least of all in a nominally "free" country.
"The idea in general is to have more people using public transportation, as it is healthier and better for the environment."
No it's not. If it were, they would be criminalizing personal cars just like taxis. They're not. It's purely about enforcing a lucrative cartel.
(Not replying to the implicit suggestion that government should criminalize any sort of transport for "environmental reasons". I used to think that was a right-wing strawman...)
"But: given the fact that we _do_ have some sort of a licensing scheme (medallions),"
Medallions aren't licensing, they are cartel enforcement. They are about maintaining a price-controlled, quota'd monopoly for a politically-connected union class -- as opposed to inspecting, training, and certifying drivers and taxi cars for safety. They are orthogonal concepts.
I have spoken to a few cab drivers. They would love to drive their own cabs in the City, but don't have the license (i.e. medallion) to do it. What is to stop them from buying rickety old smog-producing cars and clogging up the city streets? And the glut of cabs will cause a downward spiral in quality of service. Why maintain a clean cab when it cuts into the profits, and your competitor is not doing so?
"Medallions aren't licensing, they are cartel enforcement. They are about maintaining a price-controlled, quota'd monopoly for a politically-connected union class -- as opposed to inspecting, training, and certifying drivers and taxi cars for safety. They are orthogonal concepts."
But your cousin can come and make the same argument you are making about inspecting/training/certifying drivers: that it is to maintain a 'cartel' and deny access to other drivers. Who will do this inspecting, etc.? The same government that you are scoffing at?
"What is to stop them from buying rickety old smog-producing cars and clogging up the city streets?"
What's to stop cartel taxis from cutting costs in the same way? I don't see the connection.
And the glut of cabs will cause a downward spiral in quality of service. Why maintain a clean cab when it cuts into the profits, and your competitor is not doing so?"
Brand value? Also, so what? So what if people who care about their wallets prefer a cab that costs half as much, even if its not as clean and shiny as your price-inflated central planning solution? (And it's not just taxis -- private mass transit, like vans, directly competes with taxi cartels and are likewise assaulted by monopoly enforcers. Price matters.)
"But your cousin can come and make the same argument you are making about inspecting/training/certifying drivers: that it is to maintain a 'cartel' and deny access to other drivers."
Because the intent of inspection, education, and certification is emphatically not to maintain a cartel, and unless the regulators are more-than-usually incompetent it will not cost anywhere close to e.g. $930,000 per person [1]. Nor would that entail explicit quotas/supply caps.
The intent of the medallion system is explicitly and openly to act as a supply cap, to artificially inflate wages in the taxi industry. It has nothing to do with safety regulation, and it is silly to pretend you do not see the difference.
> This way the City keeps getting value out of the medallions, and can increase the supply as the population grows.
How dare you suggest that we increase the number of cabs? Cabbies don't make a "living wage" as it is, so the number must be restricted. (That's how the political campaign to defeat such measures works.)
Edit: Just rang up to find out about rough prices, the journey I most commonly take is £11 in a normal car and £25 on a bike. So only really worth it when there's going to be bad traffic (which admittedly is quite often in London) or if you really like riding on a motorcycle. Can't remember how that compares to their more expensive car services, I rarely use them (99% of the time I'm on my own for work or with friends, exec cars only when with a client for some reason.)
Will probably give it a go next time I'm there just for the hell of it. At least then I won't be tempted to read Add Lib.
I've taken them in Phuket, only because I refuse to take a tuk-tuk. Kind of hairy, but if you take into account the large number of motorcycles/mopeds, you see very little in the way of accidents.
I forgot to mention the trikes in the Philippines http://www.youtube.com/watch?v=K3SbC7Uh_bI&feature=relat... You're very low to the ground and can be somewhat scary, but they get you from place to place rather quickly and you don't have to suffer the jeepney.
Taxi licenses are outrageously expensive. A driver in Paris told me his was 190,000 euros, and it can get even higher in touristic towns on the Mediterranean coast: http://www.licence-taxi.fr/prix-licence-de-taxi.php