Cabbies plan protest Friday
Taxi drivers plan to converge Friday for a big protest outside the office of transport minister François Bonnardel.
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Tim S. 10:24 on 2019-04-05 Permalink
I’m not sure if anyone knows the answer to this, but if the government is planning to pay the drivers 500 million to compensate the drivers, is that basically an indirect taxpayer subsidy to Uber? Or is that how much money the government was collecting from taxi permits in the first place?
Kate 10:41 on 2019-04-05 Permalink
Arguably, it’s a taxpayer subsidy to the ideal of a free market.
Ephraim 11:24 on 2019-04-05 Permalink
Essentially, that’s compensation by the government for mismanagement of the permit business. They shouldn’t have been perpetual permits.
Blork 12:21 on 2019-04-05 Permalink
The permit (medalion) system is pretty weird because the government sets the limit on the number of permits there can be, and brokers their sale, but the permits are issued by the municipal taxi bureaus. And the price is set according to market demand. So when you buy a permit, you’re not buying it from the government, you’re buying it from the taxi person who is selling it.
It’s as if all house sales had to go through a government housing bureau that regulated the supply. So I’m buying your condo for $400,000, but I’m paying you, not the government — but the government brokers the deal. And I’m paying you $400,000 because that’s your asking price (and because you know that’s what it’s worth because that’s the only way to get a condo so people are willing to pay that much). If suddenly a bunch of other condos come on the market that are not governed by the housing bureau and therefore the supply is no longer limited, then nobody’s going to buy that regulated condo for $400,000, so the price drops.
That’s the Uber effect.
Disclaimer: I’m about 97% sure that’s how the taxi permit system works, but there’s a 3% chance I’m mistaken somewhere.
Blork 12:25 on 2019-04-05 Permalink
(More…) So the compensation from the government is because they set up this regulated system that people bought into, then they stopped enforcing it (i.e., you no longer need a permit to drive people around; just do Uber instead).
Following my analogy of condos, if the government artificially inflates the price of condos for many years and then suddenly stops, and condo prices drop, then it’s the government’s fault that you can no longer sell your condo for $400,000. So they compensate you for that drop in value.
Marc 11:51 on 2019-04-06 Permalink
What if it’s more like a degree than a condo? Say you went to school, took out loans to pay for it, and became a professional xyz’er. Then the government decides that you don’t need that education to do that job anymore and offers to refund you the cost of the education. That’s a nice gesture and helps in the short term but now your job situation is fubared because any regular joe can xyz now.