Larry Meyers at PDL Capital is out with a new analysis that shows Uber has lost its battle in NYC, but I am not buying it.
As part of his report, he claims this is a win for the medallion industry:
So with 20,000 registered UberX drivers, outnumbering yellow taxis by 50%, investors might expect taxi medallion revenues to have been clobbered. Yet the data reveals exactly the opposite.
UberX has thrown everything it has at the taxi medallion financial industry. The green Boro Taxis now make about 50,000 trips per day, or about 8% of the market. Subway ridership increased 2.6% in 2014, adding 132,000 riders daily.
All this…and it has barely made a dent in the taxi medallion financial sector. A 4.8% full-year decline from 2012 to 2014? A 6.3% decline for the first four months of the past two years?
This certainly doesn't sound like Armageddon, considering all the competition. In fact, it seems more like the taxi medallion financial industry is thriving.But, he does conclude with a point that I find interesting:
Simply put, Uber cannot compete when you can put your hand in the air and have a car pull over and pick you up in under 60 seconds.This is very true and a belief that I have long held. Uber is simply a workaround to the limited supply of taxis that taxi commissions allow in most jurisdictions. The ideal situation would be to lift the supply restrictions so that all sorts of new competitors could arise that you could hail by just putting your hand in the air.
Uber is most successful in cities like San Francisco, where the taxi commission has kept the supply of taxis incredibly low. To the point that, before Uber, it was often impossible to get a taxi when needed in most of the city.
For SFers, Uber was a great relief. But the SF taxi commission could destroy Uber overnight by allowing unlimited taxi operators Yes, hailing a taxi is still better than having to use an app.
But the taxi commission in the People's Republic of San Francisco is entrenched with the current taxi oligopoly and will not allow more taxis, instead new ways will be thought of to harass the workaround, Uber, which is really a regulated man's way around crony central planning.
-RW
Tech-savvy people tend to think everyone knows what they know, but I think Uber is still relatively unknown in the general populace. I knew about Uber from the very early days of its existence. I don't even use Uber very much, but when I do, I still get a lot of "You can do that!!??" kind of reactions.
ReplyDeleteOnce people discover it, they seem to fall in love with it, so I think it's too early to call victory for the taxi medallions.
But the general point is still valid. If the government got out of the business of determining winners and losers in the transportation industry, Uber would likely be irrelevant.