Just before he left office, Mike Bloomberg unveiled what he heralded as the “Taxi of Tomorrow”: the Nissan NV200.
The contract for Nissan was estimated to be worth a billion dollars. Though it wasn’t the hybrid electric called for by New York law, and not all the cabs would be wheelchair friendly, it had almost everything else on a modern nanny’s wish-list: backseat air bags, high fuel efficiency, a “low-annoyance horn,” etc.
But since then, New Yorkers have learned what the real taxi of tomorrow looks like. Turns out it’s more a matter of software than hardware — in this case, smartphone apps that make it easier for New York city riders to call a cab. The most famous of these is Uber.
Unfortunately, the city has not been friendly to its upstarts, even though passengers welcome these new entrants.
Last week, the City Council held a hearing aimed at the heart of Uber’s business model: surge pricing.
Under the Uber model, passengers pay more during peak demand and less when there’s lower demand.
Unfortunately, Uber’s critics, led in the City Council by Brooklyn’s David Greenfield, don’t seem to appreciate the basic laws of supply and demand.
The virtue of the Uber model is that if you are willing to pay the price, the cab will be there for you.
Now, most people don’t want to pay that higher price.
But some don’t care. Some will pay it because they like the convenience, and some will pay it on those occasions — e.g., a rush-hour trip to the airport or an important job interview — when the most important thing to them is not price but the guarantee of a ride.
So long as this is a price agreed to by consenting adults, what’s the problem?
Whether Greenfield and his allies admit it or not, what they are really proposing is price controls, which in turn would limit the amount of money drivers (often immigrant owner-operators) can earn.
In the short time since Uber and similar upstarts have entered the market, the competition they have brought has done more than decades of city regulation to lower prices and boost options for New York’s passengers.
The yellow cabs say everyone should have to compete on the same terms. We agree.
The way to do that is not to heap more regulations on Uber but to give every kind of car service more freedom in the marketplace.