Most Taxi regulations are good for the public not the consumer.

Go back and you find people wanted to cut the number of Taxii on the roads. I would much rather you use a bus than a Taxi. The problem was regulatory capture constricted past this point.

ex: We don't want a lot of them on the road making traffic worse. Drive to B -> C you add X congestion, call a cab they drive from A -> B to pick you up, then B->C that's X + Y congestion, pollution, risk for accidents etc.

PS: The real issue is after regulation people tend to forget why it was added. "Let's deregulate Banks!"

>Go back and you find people wanted to cut the number of Taxii on the roads.

The explicit reason given, at least in the case of NYC, was the desire to make driving taxis more profitable. During the Great Depression there were more drivers than passengers and it couldn't pay the bills. How do we solve this? Limit the supply of drivers, therefore raising the price and reducing competition. From a consumer standpoint this is terrible.

We would have ended up with an explicit monopoly for a specific company if it weren't for some folks getting convicted of corruption (taxi company bribes) scuttling that deal.

> I would much rather you use a bus than a Taxi. The problem was regulatory capture constricted past this point. >ex: We don't want a lot of them on the road making traffic worse. Drive to B -> C you add X congestion, call a cab they drive from A -> B to pick you up, then B->C that's X + Y congestion, pollution, risk for accidents etc.

Why limit it to taxis? There is a great way to promote public transit, reduce air congestion and pay for roads: tolls and congestion pricing. This would affect all drivers, not just certain drivers.

>PS: The real issue is after regulation people tend to forget why it was added. "Let's deregulate Banks!"

The irony is it appears you've forgotten why these regulations were created in the first place.

>more drivers than passengers and it couldn't pay the bills. How do we solve this? Limit the supply of drivers, therefore raising the price and reducing competition. From a consumer standpoint this is terrible.

Yes, but what regulators didn't realize (and still don't) is that economic incidence is tricky. Just because you can charge more, doesn't mean any specific factor in the production chain gets to partake in any of that.

For example, just because Gucci bags surge in popularity doesn't mean the Gucci office janitor can charge more for his labor -- the supply of such services is unaffected and they can find more providers at the same price.

And indeed, the same dynamic applied for taxi medallions: sure, you can charge more to passengers, but the immense supply of qualified drivers -- who only need a small takehome -- means that they'll bid up the price of the medallions (rental price or capitalized) so that the drivers are still poverty level, and almost all the monopoly profits go to medallion holders, not drivers.

"The explicit reason given, at least in the case of NYC, was the desire to make driving taxis more profitable. During the Great Depression there were more drivers than passengers and it couldn't pay the bills. How do we solve this? Limit the supply of drivers, therefore raising the price and reducing competition. From a consumer standpoint this is terrible."

Is it? If it's not paying the bills, then you're not going to have people doing it. Making sure that the price is at a point where it can sustain itself makes it much more likely that it'll still be there tomorrow.

This source would disagree with you about the reason for taxi medallions:

https://books.google.com/books?id=VXpyNs5EaHEC&pg=PA119&lpg=...

It confirms the story that I have heard previously that taxi medallions were introduced to protect consumers. This doesn't mean that profit was not a reason but I'd like to see something that shows the "explicit" reason you state.

I suspect it's not just for the consumers but for the image of the city. Cabs are one system that visitors interact with immediately, before nearly anything else. Grotty cabs make a bad impression.

So does a 2 hour taxi line.

I agree, but most consumers probably see them as harmful, and many consumers are dissatisfied with state-sanctioned monopolies on taxi service. The actual effect doesn't matter to the consumer, only the perceived one.

Exactly, but I'd phrase it a bit differently: when it comes to taxis and apartments, regulations are bad for you, the consumer, and good for the people in your community (taxi drivers, neighbors), while in insurance, regulations directly protect the consumer.

Because people (especially in the US) couldn't care less about other people, regulation that annoys consumers is "bad", and the consumers then defend the companies breaking those particular laws. Those companies exploit the fact that in every industry, consumers always outnumber providers (or conversely, every person consumes from many more industries than those where they provide), and so the disregard for this kind of regulation will always work. Every new company will get consumers to gang up on the far fewer incumbent providers until they break the regulation that protects them, and so on, industry by industry.

It's a little like the robber barons, who used every new wave of immigrants to beat up the previous generation of immigrants who tried to unionize, and then hired the new ones in their place... that is, until the next wave of immigrants. Except the new way of doing this is far more effective, because it's always easy to obtain a majority that supports you and feel like they're doing the right thing at the same time.

For the most part I think you're spot-on, although it's worth emphasizing the nuance that not ALL taxi/hotel regulations are bad for the consumer.

Most of the AirBnB and Uber horror stories you hear are things that don't happen, or happen far less relative to the overall volume, in a world of licensed taxis and professional hotels/B&Bs.

Does the good of current regulations outweigh the bad? Likely not, in many cases. But there are reasons (at least some of) these regulations exist outside of capitalism being terrible and the successful trying (and succeeding) at pushing out competition.

I would argue that many (most?) housing regulations are good for the consumer. My landlord has to provide me with a safe and structurally sound place to live, which is good for me. If my heat breaks in the winter he's obligated to fix it, he can't evict me and leave me on the streets on a whim, or turn off my water if I am late on the rent, etc. Laws around security deposits are usually good for the consumer as well. Nobody wants what is referred to as a "slumlord."

Landlords often are annoyed about regulations (and some tenants unfortunately abuse them) but many came about because of the abusive practices of the slumlords.

Our society deems having a safe place to live pretty essential so landlords have a massive amount of power over their tenants if unchecked.

This is a little simplistic. I won't argue that these regulations have morphed into things that are overall negative for the consumer, but the reason they where introduced in the first place is because you had instances of people actually being killed by unregulated nefarious actors. That is certainly negative for the consumer.

When people are asking politicians why Joe Doe was able to operate his "taxi" company that wouldn't stop his car outside of the ghetto without a $50 "oops, I got lost fee", it seems obvious why regulation is put in place.

That isn't to say that said regulation remains entirely useful, just that your argument isn't really bore out by the history.

The reason why zenefits is having issues is that the laws they broke are still entirely relevant to everyone involved.

Well said.

The so-called "sharing economy" could as well be called "fuck you economy".

Don't know why this is downvoted it's spot on.

Flamebait aside, is it that hard to see the material differences in the classifiers between your example of a "dis/favored class" and the classes discussed by the GP? Hint: one has classifiers that one can eventually overcome, and the other doesn't.

Regardless, comparing regulations imposed on modern industries to Jim Crow is nothing more than oblique tedious posturing that ignores the full picture of what Jim Crow laws were.

I'd be interested in hearing a principled argument why "right race" is a bad way to choose a favored class for rent seeking, but "politically connected", "nepotism" or "random chance" (as pron was advocating for) is a good way.

Further, suppose we brought back only the economic protectionism bits - would that change things and make Jim Crow somewhat more acceptable? If not, bringing up the "full picture" seems like a non sequitur.

Let me clarify the question I'm asking. Jim Crow makes me emotionally angry, more so than taxi regulations. But I don't have a reasonable principle to back that up. On a rational, rather than an emotional level, I can't actually justify why Jim Crow protectionism would be unacceptable but taxi protectionism is acceptable. Can you?

Roughly because the evidence indicated that those regulations were intended not to protect whites from black competition, but ALSO and perhaps more importantly to preserve a economy in which "white trash" was prevented from forming meaningful economic relationships with blacks.

The whole point about any form of cronyism is to prevent people from engaging in trades they otherwise might.

http://object.cato.org/sites/cato.org/files/serials/files/re... covers the theory that Jim Crow was needed to prevent these exchanges

Further, suppose we brought back only the economic protectionism bits - would that change things and make Jim Crow somewhat more acceptable? (As asked in my second paragraph.)

Suppose we literallytook some sort of randomized occupational licensing. I.e. suppose we have a cutoff of 10,000 taxi drivers, selected via shuffle(applications)[0:10000]. Now suppose we replace that random process with a racist one - first we allocate the 10k slots among white/asian people, and allocate the remainder among non-Asian minorities. Would that be morally acceptable and have the positive economic effects that pron claims?

Why is the first process morally acceptable and economically beneficial but the second one isn't?

if we have meaningful group identities. protectionism established by preventing dis favored groups from entering a market causes both the general harm a random allocation would from inefficiency AND the additional inefficies imposed on the targeted minority.

Asking society as a whole to bear a cost of inefficiency in exchange for some safety is less bad than imposing both that and the additional cost on a non-consenting minority.

For a methodological individualist it'd be harder to make a case.

In both cases the costs are imposed on a non-consenting minority - in the first case the minority is chosen by math.random(), in the second case the minority is chosen by genetics.

It sounds like you want to appeal to some principle that certain minority groups (those with "meaningful" group identities) deserve special moral consideration? Supposing that nerds or just some protectionist lottery victims created a "meaningful group identity", would that make them deserving of protection?

You are right that for an individualist (which I am), this is a lot harder. So I simply wouldn't share your moral conclusions, but I'd at least understand where you come from.

Your implication about economic protectionism being a net drain on society regardless of the classifiers could have been made without using a ridiculous example such as Jim Crow -- the non sequitur of Jim Crow lies not with my response, but with yours.

I can't and won't argue that "politically connected", "nepotism" or "random chance" are the best way of doing things, but "ambition", "ability", and "intelligence" play a non-negligible (at least non-zero) role in how much prosperity one can achieve in the taxi, real estate, etc. industries. Under Jim Crow style regulation, "ambition", "ability" and "intelligence" have zero impact on whether or not one can achieve one's fullest potential. "Right race" (a.k.a "random chance") is the only way to end up maximally successful under Jim Crow. Your argument that modern regulations are akin to Jim Crow falls flat with respect to how fungible the upward mobility is in the face of regulation.

If you look at it systemically, the puzzle disappears. It's not hard to see that the system Jim Crow laws were part of was more harmful than the system taxi regulations are part of, however one dislikes taxi regulation.

Feelings like the one you describe are often better at giving us information about systems than an analytic view (e.g. measuring comparables, in this case comparable regulations). Emotion can be irrational and take us further from the truth, but it can also take us closer. It's a question of the quality of the emotion, and one can learn to distinguish these things.

As I asked in my second paragraph, what if we got rid of the system but brought back the racist protectionism only? Would that benefit the community and all the other good things that are suggested above?

Being very concrete, I'm suggesting that we take any protectionist system which uses a random number generator (e.g. first 10,000 people to apply get a sweet gig, everyone else is screwed and forbidden from economic competition) with a different random number generator (whether a person was born $rightrace). Nothing else.

My emotions say the same thing about non-systemic racist protectionism, although your proposed solution suggests this should be ok. So I don't think your solution works.

This is a trivializing form of argument. You can't abstract things out of their original contexts like that without destroying their meaning—at least not at any level higher than, say, the lambda calculus.

Why can't you? Are you suggesting that reason doesn't apply to morality or the real world?

By abstracting in this way, we have a way to determine whether the principles we claim are important really are. In the case we are discussing, it seems like some other fact or principle from the original context is important. Which one is it, and why?

If we can't figure it out, maybe we should consider the possibility that our emotional/cultural baggage is misleading us. At the very least we should have less confidence in our beliefs than before.

Your critique seems very anti-intellectual to me - the claim that you can't reason about things outside their context seems like a cheap appeal to retreat back to our emotional conclusions. Am I understanding you wrong?

> I'm suggesting that we take any protectionist system which uses a random number generator

You're right, if you take any complex enough formula, and hide most of its variables and consider just the result modulo some number, it would look like a random number generator... And I think understand now why it may be hard for some people to see the variables, or why they'd insist on considering only some of the digits. What was the saying? "It is difficult to get a man to understand something, when his ideology depends on his not understanding it". But it goes beyond that. I really think that any interaction that is based on exercising judgment or negotiating a contract -- things that underlie most human interaction -- seems arbitrary to you. You need rules that can apply universally and without judgment. To you, judgment means too many variables that break the elegance of a simple formula; moreover, those are variables whose values are often hard to estimate precisely enough, and so the result can sometimes go either way, which to you seems like it might as well be random.

And maybe I was wrong, and it's not about your choice of axioms, but that, like colorblind people, some things about human interaction escape your perception, and you fail to see why people would "randomly" favor one grey wallpaper over another.

> your proposed solution suggests this should be ok

Yes, I too am puzzled as to why dang is so much in favor of non-systemic racism.

> But I don't have a reasonable principle to back that up.

Sure you do. Just try to find your hidden assumptions and axioms, and try to come up with alternative ones. Remember, for every reasonable assumption, the opposite assumption may be just as reasonable. In this particular case start asking yourself what does a "favored class" mean? Who favors it? Why? How is the class formed? What does "protection" mean? From what? To what end? Why is that end desirable (or not)? And every time you deem something good (or bad), keep asking yourself why, until you get to your personal set of axiomatic values[1]. Of course, when coming to a question of fact ask yourself, am I sure this is a fact, and if so, are there possibly other pertinent facts that I may be unaware of?

> Can you?

I can easily, but I could also come up with a reasoned argument to support your point of view[2]. The result in this case, as in many others, is fully determined by your choice of axioms.

I could fully argue both sides of any ethical debate, but I support the one side whose required axioms coincide with mine. I would like to believe that my personal choice of values (which has changed considerably over the years) is at least partly a result of my effort to study society in earnest (i.e. semi-professionally), and my values are almost universally shared among those who have spent years studying society, while those with opposing values usually have not. So I can only hope that my values are supported by some measure of external "truth", but, of course, I can't say that they are objectively more "correct" than yours.

BTW, I'm not advocating for randomly chosen favored classes, but for protecting all groups that are disadvantaged by our current choice of economic structure from further unfair harm which said economy may inflict on them.

[1]: And don't just say "freedom", because freedom alone is a self-contradictory value (there can be one completely free person, but not two) that must be further qualified by other values. So if you think freedom is your only axiomatic value, try harder and you'll find more.

[2]: Pretending, of course, that you'd chosen a better example than Jim Crow, where members of the favored class were former chattel slave owners who "protected" themselves from treating as human the multitudes of victims they had violently abducted and robbed (and raped and killed) for two centuries to enrich themselves. But I think I can see past that poor choice of an example to understand what you're getting at.

I hope you're just trolling :/

Check his post history.

> regulations are bad for you, the consumer, and good for a small group of rent-seekers (like taxi drivers)

FTFY

Well, that's a tradeoff. If the number of medallions is kept up with demand (as is the case in many places), I'd argue that some mechanism to protect the livelihood of those who can't obtain better jobs is a net positive, as it allows the less fortunate to get ahead, especially in an economy where decent blue-collar jobs are getting harder and harder to come by. It's not like taxi drivers are fat cat millionaires who get rich off the back of poor consumers.

Generally the medallions are owned by someone else invariably rich (or lucky to get it early) and then rented out to the taxi drivers. The taxi drivers start doing shady things in order to pay the rental costs and earn a living. Then various sides get into the game of how many medallions should be available in the market to play with the supply/demand curve and maximize their own profits.

I think Uber is owned by someone much richer than any taxi company owner, and the difference is that the shady things in Uber's case are done not by the mistreated employees but by the owners themselves (often against their own employees), and they don't do it to earn a living. I am not saying taxi company owners are saints, but Uber is by no means better.

If you've seen the HBO series Deadwood (a masterpiece, BTW), I'd say we're replacing an Al Swearengen with a George Hearst. Both may be villains, but the scale makes all the difference...

I don't very much care for Uber. I don't want them to have a monopoly in the taxi market. Hopefully a more open taxi industry with competition allows for improved quality.

Competition without regulation doesn't improve quality, historically it lowers it.

If Uber ultimately goes public, then the owner will be society. The medallion owners largely were individuals who had the access to credit and leveraged in as the values rose.

There is a lot more transparency with Uber, however if they achieve a near total monopoly on transportation such as Google did for search, the end result from a consumer experience standpoint may end up the same, with different trade offs.

The alternate issue, the employees/drivers, won't matter in the long run because there won't be drivers whether it was Uber or medallion holders.

> If Uber ultimately goes public, then the owner will be society

thats a ludicrous reductionism as to what "publicly traded" company actually means and it discredits the rest of otherwise reasonable argument to say this.

> If Uber ultimately goes public, then the owner will be society.

No, if Uber is ever nationalized, then the owner will be society.

If Uber merely goes public, then the owners will still be the stockholders, its just that it will be easier to trade in the stock.

From failing operations in Venezuela to gigantic state operated industries in China, I see a lot of examples of nationalized & government operated companies where the end beneficiaries are the insiders who get to re-allocate wealth to themselves at the expense of the rest of their citizens.

> If Uber ultimately goes public, then the owner will be society.

You mean those in society with disposable income to invest (or a 401K). That's not quite the same as "society".

> The medallion owners largely were individuals who had the access to credit and leveraged in as the values rose.

Sure, they were small-business entrepreneurs. As I said, they are Swearengen to Uber's Hearst, but their immigrant employees certainly benefit from the regulation, too.

> The alternate issue, the employees/drivers, won't matter in the long run because there won't be drivers whether it was Uber or medallion holders.

Perhaps, but there will be other similar issues.

Sovereign wealth funds, pension funds, both public and private, own immense quantities of stocks in publicly traded corporations. If the trend of give-everything-away philanthropy continues, even the most tightly controlled corporations should continue to spread out through society.

If Uber goes public, nothing significant will change. The same creepy people will be in charge, the CEO will still be the same guy who's advocated breaking laws and sending PIs to stalk reporters.

Rent seeking through regulations designed explicitly to eliminate competition is not suddenly ok because you perceive them as "blue collar."

It's unreal that people would attempt to defend this.

I guess that depends on the values you hold, doesn't it? For many of us, there are some values that occasionally trump that of unrestricted competition, and many of us believe that sometimes free competition reduces freedom rather than increases it.

More accurately, there are a few of you that support rent-seeking.

Or even more accurately, many of us think that it is possible to conceive of things worse than rent-seeking, and so in some circumstances it is possible that a reasonable amount of it may be the lesser of two evils (just as accepting killing in self defense is not the same as "supporting murder"). Others, of course, may believe that there can be nothing worse.

The other difference is the consequences of the laws being broken. Insurance industry laws are much stricter in enforcement than rental or auto laws. Lawmakers may look the other way on taxi or rental regulation, because they realize there's a market shortage. They're much less willing to look the other way on insurance (or any financial services) fraud.

It could also be that insurance industry participants are more centralized and organized than taxi and real estate companies, but I'm less sure that this was a driving factor in the regulation.

They are also backed by the financial industry and are considered financial and legal instruments.

while it isn't possible to "front run" your insurance deal as your broker, putting you into the wrong insurance has a variety of outside financial consequences that are not insurance related at all.

For example - Zenfits could theoretically "redline" certain kinds of businesses into certain kinds of insurance, even though the employee pools qualify for something better/totally different. By doing so, Zenefits could make more profit per insurance policy sale and renewal, but their is more risk in the lifetime customer that they will explode, since it is the wrong policy. Zenefits see hypergrowth and projections towards even further hypergrowth. However, they also create systemic SMB risk

Since SMBs do not typically get lots of help with these sorts of HR issues, the "wrong" insurance could be the difference between bankrupcy and existence 5 years down the line, even though there is competition among policies. The broker is supposed to act as guidance among many competing insurance policies against that eventuality, hence the regulation.

If Zenefits can't guarantee their employees can actually act not in Zenefits interest as brokers when queried about two policies and the benefit to the customer, despite what Zenefits would make out of the sale, because of behavior within Zenefits, then there are problems for the businesses that brokered with them, and any bank that loaned them money (since part of the premise there is that this stuff is properly managed!)

Interesting. I hadn't thought of it this deeply - that's there's an insurance equivalent of fiduciary duty.

Don't take this the wrong way

I'm actually surprised I'm the first one who mentioned it. People are very focused on the Zenefits as startup issue, rather than focusing on "What if it was say one of AIG's largest franchisees (or insert some conglomerate of insurance brokers, especially as famous as AIG) who was doing this." Once framed this way, it becomes much more obvious that the startup issue and how it relates to growth is a different set of issues and framing than "cheating on tests in insurance brokering/lacking proper insurance brokers doing the sales/place of regulation in insurance."

This especially becomes true when if you turn on the tv and hear the occasional pitch about loans against life insurance policies, or question too deeply why AIG was even betting in the subprime mortgage market and became systemic risk if they are an insurer.

It must mean that insurance itself is a kind of financial instrument, or cash flow, or something where you can create exchanges off of it in its own way(1). Which means there is fiduciary duty of some sort when the initial underwriting for the insurance is written.

This is going to be a headache for anyone who bought one of those policies and/or underwrote one.

(1)Technically speaking, options, futures, and forwards all started out as insurance contracts, some dating back as far as before Hammarabuai's code, so insurance contracts today must be some remainder of something special, I suppose.

It's more the 'unions' than the 'regulations'. It's in the best interest of any union to keep prices inflated artificially by utilizing government regulations, like the medallion system.