But if the system isn't sustainable, then in the long term customers don't get what they want. So when we're designing society-level systems, we need to think about society-scale sustainability.
Personally, instead of our hodgepodge of retirement and health insurance systems, I think we should just fund a strong safety net out of taxes. That minimizes barriers to entrepreneurship and avoids distortions. But that's not what America had when the medallion system was being developed, so we got what we got. You can certainly propose a change to that, but if you want to be taken seriously, you have to explain how you'll solve the problems the existing system solves, or at least be honest that you're not solving them.
I can only imagine that someone who rarely or never travels would say something like this. The main reason I switched to uber is that taxis are universally horrible, both in terms of drivers and vehicles. It's gotten much better since uber forced them to compete, but they still generally suck.
So maybe you're right, and that was the reason for taxi medallions; but guess what? It didn't work.
> Uber has shifted capital and maintenance costs entirely away from cab companies and on to random people desperate enough to drive for Uber.
Again, this is something that I can't imagine hearing from someone who actually uses Ubers on a regular basis. Most Uber drivers I've talked to love the platform, and a good portion of them are e.g. students working a side job, none of them "desperate" people.
> I can only imagine that someone who rarely or never travels would say something like this.
Your imagination is poor. I've lived on 4 continents and am on an extended trip even as I write this.
We're talking about different kinds of regulation. You apparently care about things being shiny; most regulation, though, is about setting a minimum bar.
In the early, high-growth days of something, regulation is rarely useful because everybody's on their best behavior. It becomes more important when things settle down into a relatively steady state. Then, the incentive to shave nickels and dimes can come out elsewhere. E.g., taxis face significant safety inspections and maintenance requirements because when you use a car as a commercial vehicle, you put a lot more miles on it and you are more likely face safety issues.
We don't yet see these problems with UberX because it has only been going for a few years, and because Uber has a strong incentive to keep from becoming an obvious disaster until growth slows and revenue gains come more from exploiting their market position.
> Most Uber drivers I've talked to love the platform
Gosh, might they have some incentive to only say happy things to you? Gosh, might there be some selection bias in your sample? Gosh, might people not talk about their pain and fears to random strangers?
But taxi medallion systems served a number of purposes. One of the big ones is reasonable regulation of taxi and driver quality. Another was keeping supply and demand balanced at a level where people didn't have to cut corners on things like taxi maintenance just to survive, which helped keep taxi fleets safe. A third was setting up a reasonably livable wage for career taxi drivers. A fourth, at least in some cities, was creating a de-facto retirement system: since drivers had dibs on medallions, they could invest and create an asset that would fund their retirement. A fifth was creating a revenue stream for cities to that helps pay for regulatory and road costs. Those are off the top of my head; I'm sure there were more.
Now instead a lot of those costs are borne by other people. Uber has shifted capital and maintenance costs entirely away from cab companies and on to random people desperate enough to drive for Uber. Losses are no longer the problem of the cab company, but individuals. When those drivers go bankrupt, society bears the costs. When those drives use public assistance [1], society bears the costs. When they retire and we make up for their lost retirement savings, society bears the costs. And that's to say nothing of the direct and indirect societal costs that come from more traffic.
Similar issues come up with Airbnb. E.g., if you thought you were living next to a neighbor and now are dealing with an illegal one-unit hotel in your building, you are experiencing a loss. If the apartment you rent out is trashed because somebody is running an illegal business out of it [2], you experience significant loss. When rent goes up because people are illegally converting housing to de-facto hotel stock, that is a socialized loss with privatized gains.
I'm not even saying this is necessarily worse. As with the bankruptcy system as a whole, it can sometimes be overall better for society to pay for something. But we shouldn't sweep this stuff under the rug.
[1] E.g., https://uberpeople.net/threads/you-may-qualify-for-governmen...
[2] https://www.cnbc.com/2017/09/01/airbnb-nightmare-homeowners-...