ROMNEY WORDSWORTH – What happens when a government created transportation monopoly collides with technological innovation? The government moves to crush innovation and protect its monopoly cronies, of course.
Within the jurisdiction of West Windsor, New Jersey, lies the Princeton Junction Train Station, a busy mass transit hub that services Princeton, Princeton University, numerous office parks and corporate campuses along the Route One corridor, and bedroom communities in Plainsboro, East and West Windsor, and other towns whose residents use the train service to commute to New York City.
Servicing this train station is a taxi cab guild. Taxi drivers join the guild by purchasing a Taxi Medallion. These medallions don’t come cheap. They are sold by cities and towns as a means of raising revenue. Recently Jersey City sold 20 such Medallions and raked in $1.5m dollars. A minimum bid is around $50,000.00 and typically rise to $100,000.00 in order to have a winning bid. Once you’ve bought a medallion, you have bought into a State enforced monopoly, and all the perks that go along with it.
As always happens with state created monopolies that are insulated by market forces, the taxi service in Central New Jersey is known for its horrible customer service, the long times taxis take to respond to a call, rude and discourteous drivers, and rampant price gouging. For instance, I have personally heard horror stories from Princeton University students who have described the practice of “stacking”. Taxi drivers in Princeton Junction make them wait until they have a full car, then they take the students to one location at Princeton University (which may not be near where they actually need to go) and, to top it all off, then proceed to charge each student in the car the full fare, as if they had taken a taxi by themselves. I’ve heard this story numerous times, but you won’t see the West Windsor police department write tickets to taxi drivers for this illegal price gouging. Tales of taxi drivers taking unnecessarily long routes are also legion. Many taxi drivers give riders, shall we say, a thoroughly multi-cultural Third World thrill ride, with foreign music blaring from their car speakers and incense soaked air to breathe.
A second story I heard from an elderly Jewish couple described being taken on a half hour taxi ride while the taxi driver spoke Arabic into a phone for the whole trip. Upon exiting the taxi, the Jewish couple was accosted by the driver, who yelled at them: “Death to the Jews!”
Uber would not exist BUT FOR the horrible customer service and high prices of the Taxi Guild Monopoly. Riders have fled in droves to Uber, and to a lesser extent the Uber knock off known as Lyft. Not only are the fares about half or less than what taxi medallions charge, but the app allows Uber to deliver rides within 5 to 15 minutes on average. Ride routes are created by auto navigation that the riders can confirm is direct and efficient. Uber stresses courteous customer service, and it delivers as is evidenced by its popularity. USA Today reported in May of this year that the resale value of Medallions are dropping in major American cities like New York, Chicago, and Philadelphia. In Chicago they have dropped from a high of $357,000.00 in 2013 to “only” $270,000.00 today. Taxi Medallions in New York City have sold for as much as one million dollars in the past, so pressure from Uber, which earned $750m in New York City in its first 4 years of operation, represent a serious asset depreciation for medallion holders.
But now the Taxi Guild Empire is striking back. West Windsor Township is willing to be the Brown Shirts for the Taxi Monopoly, and has started to wage a bare knuckle campaign of ticketing Uber drivers and impounding their cars. Entering the Princeton Junction Train Station drivers are now warned by a giant blinking LED sign:
When Conservatives complain of the regulatory state crushing innovation and killing jobs, this is what we mean. I sure it comes as a surprise to young, tech savvy Millennials that the Democrat politicians that they like to vote for are the same ones who want to take away their Uber, and consign them to being captives of local taxi cab monopolies.
This desperate attempt at erecting a blockade is doomed to fail. Uber is just too agile a service for this sort of thing to work. The Uber app allows drivers to contact riders and arrange for pick ups and drop offs outside of police drag nets. Riders don’t want to take taxi cabs, and State laws and ticketing campaigns won’t force them back into taxi cabs. The Medallion holders might as well be trying to hold back the tide of the Atlantic Ocean. It is also a bit galling that these same towns turn a blind eye to illegal immigrant laborers who gather in their town squares to be hired by contractors and landscapers, but they roll out the power of the State on actual citizens who just want to catch a cheap ride, or make a little extra money.
It is also bad public policy to enact laws that are ignored by a majority of the citizenry. It breeds disrespect for the law in general, and invokes a sense of injustice in the governed. Rather than try to protect old monopolies that the public hates, State and local governments should scrap the old guild systems and embrace innovation. We The People are going to do so anyway, with or without them.