Russian natives fight city all: Are allowed to run hybrid cabs in NYC.

[NNadir]

This is one of the more mystifying stories in the increasingly bizarre world of government. Two Russian immigrants won taxi medallions based on a willingness to use alternate fuel vehicles to save New York City pollution and to save money. The Taxi commission fought against them. WTF?

On Wednesday evening, six Ford Escapes - medallion numbers 9V10, 9V11, 9V16, 9V17, 9V22 and 9V23 - hit the road without fanfare and became the first hybrid vehicles to be used as taxicabs in New York City.

There was no news conference or celebration to mark the event, though it heralds a new era in city transportation. The sport utility vehicles, which run on a combination of gasoline and electricity, look almost identical to regular Ford Escapes. The city intends to close the sale on 12 more hybrid medallions in two weeks.

The complicated story behind this development involves a long battle between three Russian immigrant business partners and the city's Taxi and Limousine Commission.

It began in June 2003, when the City Council ordered the commission to sell special medallions, to be used with natural-gas or hybrid vehicles, as a pilot project.

At an auction in October 2004, Evgeny Freidman and his partners, Mamed Dzhaniyev and Vladimir Basin, placed winning bids on 18 medallions and put down a $450,000 deposit...

... They had no time to celebrate, though. What should have been a simple deal soon became unbelievably complicated: The commission failed to approve any new alternative-fuel vehicles for use as cabs and eventually refused to take their money. The men, who know a good deal when they see it, did not want to lose this one, and so they complained, fought with the commission and, in April, filed suit in State Supreme Court in Manhattan.

According to that lawsuit, the men had sought to have the Ford Escape approved or to be allowed to convert several Ford Crown Victorias to use natural gas. The taxi commission tried to back out of the deal, saying that federal approval would be required for the natural-gas conversions.

The Council, angered by what it saw as dithering by the commission, passed a bill in June that compelled the commission to approve at least one alternative-fuel vehicle for use as a taxicab. The next month, the commission complied, approving six hybrid models, including the Ford Escape, for use by any medallion owner, not just the three Russians...

http://www.nytimes.com/2005/11/04/nyregion/04taxi.html

[phantom power]

1. Hard to imagine a better application for hybrids than taxis.

Heavy mileage, almost all of it in stop-and-go traffic.

[skids]

2. Payola.

Every action by any government body, no matter how minor, in NYC is stalled to look for a way to get someone to pay for influence. Just the way NYC works.

[dcfirefighter]

3. The method for assigning taxi medallions is a joke

These medallions are clearly nearly a half million dollars - and they are merely a license issued by the city. All of the other, previously issued medallions are also worth quite a bit of money - but to buy them (a license issued by the city) you must pay the previous owner.

The medallions have appreciated to the point that a new guy cannot possibly afford one - in fact, the only people who can afford them are investors who buy them and then lease them out, absorbing profits created by legislative fiat.

The city should determine how many medallions it is willing to issue, and then auction 1/3d of them every year. They'd have almost no value in trade, other than what they may appreciate within 3 year. They'd still be too expensive for the average schmo to afford, but at least the money would be going to the people of NYC rather than some idle investor. (And this is one of the very few situation where the investor IS idle - at least this facet of the investor - because he has not produced anything. The portion of the investor that purchases the sedans for the hacks to use is an active investor)

This is exactly the sort of license government should charge for. The government provides a service (enforcement of their oligopoly) to medallion owners - a service that is worth money - a service that medallion buyers pay for. Why isn't it collected by the government? The 11,878 medallions, if they sell for $300,000 each, would probably rent for $15,000/y each - generating NYC $180 million. That'a $180 million that doesn't need to be raised by wage, income, or poperty taxes.

[NNadir]

4. This is all true.

[htuttle]

6. Where I used to drive (in Milwaukee)...

...the city has a lottery (or used to 15 years ago) to sell the open cab medallions. When somebody wants to give up their medallion, it returns to the city -- they aren't allowed to sell it to somebody else.

This way, the city can still restrict the number of licensed cabs (which is a good thing for a number of reasons), but prevents the sort of market in medallions you see in NYC. The medallions always cost the same amount (I think it's a few hundred bucks, or used to be), and qualified new operators can get into the market if they want to without needing mafia money to get started.

I prefer the Milwaukee system to NYC's by far.

[dcfirefighter]

7. They can get into the market only if they win the lottery

seems neither fair nor efficient.

The medalions have a definite monetary value. If the operator must purchase the value, he has to work at least hard enough to make it worthwhile. If the state collects the payment for the medallion, it may reduce harmful taxes elsewhere.

I also have no problem with an unlimited number of medallions, as long as the operator can prove a safe vehicle as well as a valid license and driving history. However, generally this means that taxis must compete for fares - generally meaning poor returns for the cabbie. However, where the cabbie must pay for the medallion, his net returns aren't that much better. Face it, there's not much money in cab driving. However, if you can amass 130 medallions, like those russians have, you can make a pretty good chunk of change just by owning a piece of paper issued (and enforced) by the city government. IMHO, since the government (people) is doing the work (monopoly enforcement), the government (people) should reap the benefit.

Similar distortions exist for all limited issue government licenses, patents, titles, and agreements: TV/Radio/RF broadcasts, Tacit pollution 'permits', Mining permits, Grazing permits, Timber permits, Drilling permits, Land development permits, Land Titles, and most public Utilities.

I also mention patents, though while they do encourage invention, in this day of rapid technological advances, it is unlikely that one person really has a 20 year lead on everyone else. IOW, if Tesla didn't invent the radio, Marconi would have at about the same time. I would support a general limit of 5 years for a patent, with a completely nationalistic clause that other Americans could bid on the right own that patent every 5 years thereafter, up to the 20 year international standard. Generally, most inventers aren't very good businessmen, and would probably make more money by selling their patent off the bat. Many, if not most patents are developed by multinational corporations anyway - some of which merely develop the patent to be able to use the US Government to exclude others from competing with them. In my eyes, the US government (of, for, and by the people) should reap the financial benefit of doing all that work.

[htuttle]

8. Here's the deal with restricting the number of medallions

...and it's been sort of a hot industry topic over the last few years.

The reason you want to restrict the number of medallions is that if there are too many cabs, the individual drivers don't make enough money -- operating honestly, that is. You see the way the business works, if drivers are not making enough money to live, they WILL start taking the long way around and otherwise squeezing more money out of what fares they can get -- ie., ripping them off. It's like a law of physics. You really can't stop it by merely threatening them with penalities. Half the time you are transporting out of towners who wouldn't know any better anyway...

Municipalities have discovered over the centuries that the best way to ensure good honest cab service to ensure that the individual drivers have a chance to make a fair living (in addition to proper licensing, appropriate mechanical inspections, diligent complaint investigation, etc...). You do that by restricting the total number of cabs in the city (balanced against the demand for cabs).

Of course, you will find lots of stuff on the web about this that says all sorts of things to the contrary -- taxi deregulation seems to have become a popular topic among up and coming libertarian pundits.

As far as the money in cab driving, it varies wildly by the driver, the city and the season. Where I work, we run the company ourselves as a coop, keep overhead low, commissions high, and as a result know several dozen drivers (out of 150) who are homeowners. So there is money there -- but it isn't easy. However, those situations when I drove for somebody who owned 100+ cabs were fairly horrible. Both for me, and for my passengers. Bad cabs, bad business, bad moods all around.

Again, the reason I prefer the lottery to a medallion market is that while the lottery might seem hit or miss, it eliminates the need to get gangster money to start your business (and be honest -- where else is a prospective cab driver going to get $500,000?). Anyone can own a medallion with a lottery, but you might have to wait a few years on a list to get going (and most people end up just driving for someone else while they wait to get a medallion).

I generally agree with you on patents, though.

[dcfirefighter]

9. Lottery

I can't get behind this. I've no problem with limiting the number of cabs, I just think the city should get the credit for doing so. If there is a significant carrying cost with the medallion, owners will have to work to make it pay: keeping the car clean, new, and on the road.

I think technology has progressed to the point that drivers can be prevented from ripping off tourists. I'm thinking a GPS calculated route fee for the pickup and drop off regardless of actual route taken. (e.g. from 1200 Pennsylvania Ave NW to 4100 Connecticut Ave NW is worth $8.40).

I do like the idea of a co-op though. I think its an excellent way to run a business where many of the operators generally have self autonomy.

Now, if they could make these diesel's into a diesel hybrid, they'd be the cat's meow for taxis: http://www.london-fleet.com/corp/index02.htm

[Coastie for Truth]

5. We have HEV taxis in SF, and Santa Clara County.

Also HEV rent-a-cars at SFO, SJC, OAK airports.

Hertz at SFO had GM EV's and Toyota RAV4 EV's when GM and Toyota were still leasing them.