From: Steve Laniel
Date: Thu, 20 Aug 2015 18:17:47 -0400
To: Michael J Moran, Linda Dorcena Forry
Cc: William N Brownsberger, Sonia Chang-Diaz,
Anthony W Petruccelli, Aaron Michlewitz, Byron Rushing, Jay D Livingstone

Dear Representative Moran and Senator Forry,

I read in the Globe about your bill, H.3702, that would add more regulations to ride-sharing services in an attempt to level the playing field with taxis. The intention is probably sound, but it seems to me that it’s going in the wrong direction. Why not loosen regulations on cabs? Two types of regulations strike me as hugely detrimental to taxi drivers:

  1. “Dead-heading”: if a cab picks up a passenger in Boston and drops her off in Brookline, that cab has to then drive back to Boston empty before picking anyone up in Boston. In that same situation, ride-sharing services can pick up passengers in Brookline. Each fare is thus more expensive for cabs than it is for the ride-sharing driver. Why not get rid of the dead-heading requirement? There’s no conceivable public-safety justification for such a requirement.
  2. Medallions: cab owners have to spend hundreds of thousands of dollars, even after ride-sharing services have driven down their value. Ride-share drivers aren’t subject to this requirement — and they shouldn’t be. Naturally we can expect that current medallion owners would hate the idea of their medallions becoming valueless, so of course we expect opposition here. The public good, though, is not served by defending entrenched property owners’ monopoly rents. Medallions introduce artificial scarcity, to no public-safety end.

The net effect of dead-heading requirements and artificial scarcity is that, as of 2011, Boston had the most expensive cabs in the country. And Boston cabs offer notoriously poor service, which is an expected outcome of a market protected by medallions: cab owners fight to protect their monopoly, rather than fight to provide better service to their customers. No wonder ride-sharing services have found a welcome home in Boston. And no wonder that the cab owners, long accustomed to monopoly rents, are outraged.

By the way: I’d be interested to hear the perspective of the cab drivers rather than that of the cab owners. Are the drivers choosing to quit the cab companies and work for ride-sharing services instead? Whose interests are we protecting? I suspect we’re not protecting the interests of the drivers. We’re certainly not protecting the interests of passengers. It looks from the outside like we’re only protecting the interests of the owners.

If what we care about is public safety, then by all means let’s require ride-share drivers to satisfy safety requirements. If, however, the goal is to level the economic playing field, then the way to do that is to weaken obsolete economic rules on taxis rather than strengthen them on ride-sharing services.

Steve Laniel