It’s one of the most innovative and creative devices developed by man, and one is probably sitting next to you on your desk right now, or hiding stealthily in your pocket. It is the amazing smartphone. This baby computer can do all sorts of amazing things, which you probably already know. And you can down load any number of different apps to help you in your life. One type of app, developed by several different companies, is a taxi cab hailing app. Among them are Hailacab, TaxiZapp, TaxiMagic, GetTaxi, and Uber.
With Uber, you can download an app for an Android or iPhone, and use the phone’s map program to tell Uber where you want to be picked up. If you have a different model smartphone, you can visit the mobile website, or simply text a message to Uber. Then, Uber dispatches your order for a taxi to the nearest available driver. When the driver arrives, you receive a text message
like this one. You jump in the car, and you are on your way. After the ride, Uber automatically charges a credit card you have on file with them. You can even leave a tip for the driver. No longer will a passenger have to try to desperately hail a cab on a busy street, hoping one will see him, and stop. A vehicle is assigned to each specific passenger. The application even sends the passenger the name and taxi number of the cab sent for him. No muss, no hassle, no fuss.
Except in the Big Apple.
Although Uber works in 17 cities in North America and Europe, it doesn’t work in America’s quintessential city; New York City. Why not? It’s because of a little thing called the TLC.
TLC in this case is anything but Tender Loving Care. It is a city run bureaucracy known as the Taxi and Limousine Commission. And it exists to “protect” the consumer from evil taxi drivers. Founded in 1971 from the disbanded Hack Bureau of the New York City Police Department, the TLC is staffed with armed peace officers. And they are there to enforce “the Rules”. These rules cover every aspect of the taxi industry including the age of the vehicles, the color of the vehicles, the decals, and the equipment,. But most of all it attempts to control the behavior of the driver. Drivers are not allowed to refuse service to passengers. They are not allowed to be armed. They cannot use a cell phone or other electronic device while driving (even if stuck at a dead stop in heavy traffic). They can’t smoke in the cabs. They must be neat and clean. They even require the cab drivers to be able to make change for a $20 bill. The rules for driver behavior run for ten pages, each violation carrying with it a fine, or the threat of loss of license, or both.
So Uber wanted to enter the most lucrative taxi market in the world. But they found themselves blocked by the TLC. According to the New York Times, “ (T)he program may have a significant problem: Taxi officials say that Uber’s service may not be legal since city rules do not allow for prearranged rides in yellow taxis. They also forbid cabbies from using electronic devices while driving and prohibit any unjustified refusal of fares. (Under Uber’s policy, once a driver accepts a ride through the app, no other passenger can be picked up.)"
Back in the 1930s, New York City did not have a Taxi and Limousine Commission. It was an open and free market. Anyone who wanted to could start a cab company. And when the Depression hit, many people did just that: They turned their family automobiles into taxi cabs. They didn’t have to ask permission, or seek approval of a bureaucrat; they just did it.
Of course, this did not sit well with the existing population of cab drivers in the city. So, in 1937, the administration of Mayor Fiorello La Guardia introduced a medallion system to the city. No longer would a free market prevail. Instead, the number of taxicabs in New York City was artificially limited to 16,900 taxis. (Later this number was reduced to 11,787, but gradually increased to its current 13,237 medallions). It was a pure case of protectionism; using the force of government to prevent existing companies from having to compete with start-ups
And the TLC, which was first tasked with enforcing the cartel, failed to keep up pace issuing new medallions. Note that in 1930, the population of New York was 6.9 million. Today it is 8.2 million. So the ratio of taxis to population has been steadily shrinking. This lack of cabs is the major reason why it so hard to get a taxi in New York on a busy afternoon, and why some regions of the city are barely covered at all. And the lack of competition removed all pressure on the cab companies to maintain quality, resulting in horrible customer service.
To mitigate the very problems it caused by its initial interference in the marketplace, the TLC instituted its inane series of rules and regulations on the cab driver’s behavior. But the bad behavior persists.
Into this morass of cabs in short supply, piloted by rude drivers, stepped Uber; truly a godsend for the cab using public.
But Uber runs afoul of TLC. And the TLC is striking back at Uber, hard. Already, the TLC has ordered Uber to stop processing payments with their app. And the TLC has threatened drivers who use the system with fines, or loss of their hack license. Why? Because they cannot bear the thought of changing their precious rules and allowing cab drivers more freedom.
Think about that. The government agency tasked with protecting the consumer, and priding itself on innovation is slamming down a true innovation and milestone in customer service. And that is how government works.