# Federal Judge: Chicago's differing regulations of Uber vs taxis may violate equal protection



## chi1cabby (May 28, 2014)

*http://cookcountyrecord.com/stories...taxis-may-violate-equal-protection-judge-says*


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## Wil_Iam_Fuber'd (Aug 17, 2015)

Chi1 another great link, thanks!

In my reading, the money shot is the 3'rd from last paragraph. But, these costs and requirements are not that onerous for the TNP's to implement if the Federal Court compels it. 

The Insurance piece is the biggest cost and products are in development that could mitigate this. All of these factors might bring another .$25 cpm to the TNC Operators. This doesn't really close the competitive price gap in any meaningful way.

The Judge dismissed the medallion value claims which IS the significant financial/cost issue. Which the taxi guys made by violating equal protections in the first place, having created a monopolistic supply control. So...don't really see how this is a "Big Win" for the Taxi Industry. 

Maybe I'm wrong...idk.


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## Hackenstein (Dec 16, 2014)

Wil_Iam_Fuber'd said:


> Chi1 another great link, thanks!
> 
> In my reading, the money shot is the 3'rd from last paragraph. But, these costs and requirements are not that onerous for the TNP's to implement if the Federal Court compels it.
> 
> ...


I don't get how no one can grasp the idea that an unlimited number of taxis is not a good thing.

You either have a reasonable limit, which sometimes includes a Medallion system, or you run into problems.

Merely calling it a 'monopoly' is not accurate.


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## observer (Dec 11, 2014)

Wil_Iam_Fuber'd said:


> Chi1 another great link, thanks!
> 
> In my reading, the money shot is the 3'rd from last paragraph. But, these costs and requirements are not that onerous for the TNP's to implement if the Federal Court compels it.
> 
> ...


The "taxi guys" didn't create the medallion system, the cities created the medallion system.

The "taxi guys" do benefit from the medallion system, to the extent it limits competition.


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## Hackenstein (Dec 16, 2014)

observer said:


> The "taxi guys" didn't create the medallion system, the cities created the medallion system.
> 
> The "taxi guys" do benefit from the medallion system, to the extent it limits competition.


It limits the size of the fleet. I can't imagine there's a more competitive industry on Earth than driving a yellow cab in NYC. Every single driver is competing for fares all day long.


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## Lack9133 (Mar 26, 2015)

Wil_Iam_Fuber'd said:


> The Judge dismissed the medallion value claims which IS the significant financial/cost issue. Which the taxi guys made by violating equal protections in the first place, having created a monopolistic supply control. So...don't really see how this is a "Big Win" for the Taxi Industry.


Creating a supply control can be justified in some ways. As everyone knows on this board, demand for a taxi has sharp peaks and valleys. There are days where drivers could be sitting for hours without a trip and there are days where the passenger could be sitting for an hour waiting on a ride. It goes back to the old saying, you can't build a church for Easter. It's the same thing as not building a high supply of taxi's to handle NYE considering there is no business for those surplus drivers come January 2nd. Generally there are enough taxi's on the road to handle the demand around 90% of the time with the exception being during major holidays and during the Friday/Saturday night bar rush. It also gives drivers an incentive to work during low demand and high demand times. Since drivers cannot surcharge, limiting taxi's allows drivers to make enough money during those high demand times which can carry them through the low demand times when there are more supply than demand. In the end, the supply and demand equilibrium is not based on strictly high demand nights but for an entire week, month or year. The other reason this is done is to prevent companies from having a monopoly as you mentioned. Since passengers care more about response time than pricing (ex: will pay an Uber surcharge before waiting on a lower priced taxi), the company with the most drivers get the most requests which in turns gets them more drivers and more trips until no one else can compete. It's basically why Lyft struggles competing with Uber, Uber has all the drivers.

I am against the fact though that cities do not issue additional permits as the population grows. There should be a formula available that cities follow which will release additional medallions as the population/demand (not for just one night but on a yearly basis). Some cities do this but instead of offering new permits to existing companies, they just add a new company which doesn't improve response time considering the previous companies still have the same amount of taxi's per mile when one is requested. In this particular case, cities need to progress with the changes in demand.


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## F-uber (Aug 1, 2015)

Lack9133: incredible post! This is something I have been trying to articulate for several years. I usually say it is feast or famine for drivers in most locations. The feast usually involves annoying, abnoxious, vomiting, and sometimes violent drunks that drivers have to endure to compensate for the downtime. Not to mention working in traffic jams, bad weather, awful hours, and the risk of an auto accident.

If the public had more of a perception of this I think we might have better working conditions.


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## F-uber (Aug 1, 2015)

Hackenstein said:


> I don't get how no one can grasp the idea that an unlimited number of taxis is not a good thing.
> 
> You either have a reasonable limit, which sometimes includes a Medallion system, or you run into problems.
> 
> Merely calling it a 'monopoly' is not accurate.


An unlimited supply of drivers is great for riders, but suicide for drivers. If every driver was paid for downtime, that would be great, but is hard to see that happening.


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## The_One (Sep 9, 2015)

observer said:


> The "taxi guys" didn't create the medallion system, the cities created the medallion system.
> 
> The "taxi guys" do benefit from the medallion system, to the extent it limits competition.


No it does not limit competition, there was always competition, it protects the drivers, as they can make A LIVING WAGE. And uber is a FHV dispatch service, not a Taxi, and you always had FHV services in every city and still do.


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## observer (Dec 11, 2014)

The_One said:


> No it does not limit competition, there was always competition, it protects the drivers, as they can make A LIVING WAGE. And uber is a FHV dispatch service, not a Taxi, and you always had FHV services in every city and still do.


Of course it limits competition, make that, used to limit competition.

Since Uber has come in not honoring the medallion system, has competition gone down? Stayed the same? Or is there more competition?


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## Lack9133 (Mar 26, 2015)

observer said:


> Of course it limits competition, make that, used to limit competition.
> 
> Since Uber has come in not honoring the medallion system, has competition gone down? Stayed the same? Or is there more competition?


Cab companies are not in competition for passengers, they are in competition for drivers. In that regard, yes, Uber has increased competition and forced cab companies to provide competitive rates in order to contract the best drivers.

In terms of passengers, the public still only cares about response time, not brand. If there is a cab in front of them, they will generally take the cab before the Uber. If there is no cab present, they will ping Uber. For true competition to work, the public has to bypass available alternatives for their competitors. Since the public doesn't do this in the taxi world, there is little incentive as a driver to "go that extra mile" considering a majority of the time your income is based on smart positioning of your vehicle and sheer luck.

The medallion system is keeping Uber in business in my mind. If they every deregulated max cab limits and the public had an infinite number of cabs available in front of them, Uber's trip requests would decline.


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## Hackenstein (Dec 16, 2014)

Lack9133 said:


> Cab companies are not in competition for passengers, they are in competition for drivers. In that regard, yes, Uber has increased competition and forced cab companies to provide competitive rates in order to contract the best drivers.
> 
> In terms of passengers, the public still only cares about response time, not brand. If there is a cab in front of them, they will generally take the cab before the Uber. If there is no cab present, they will ping Uber. For true competition to work, the public has to bypass available alternatives for their competitors. Since the public doesn't do this in the taxi world, there is little incentive as a driver to "go that extra mile" considering a majority of the time your income is based on smart positioning of your vehicle and sheer luck.
> 
> The medallion system is keeping Uber in business in my mind. If they every deregulated max cab limits and the public had an infinite number of cabs available in front of them, Uber's trip requests would decline.


The TLC sets rates in NYC. Uber is doing illegal ehails without paying a cent for a Medallion. None of it is 'competition,' that only exists on an even regulatory playing field where the costs are the same.


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## Michael - Cleveland (Jan 1, 2015)

Since when does the *Equal Protection Clause* of the Fourteenth Amendment apply to an industry - or even a company?
The 14th amendment is about the civil right of individuals to be treated equally under the law, without discrimination.
I'm not sure any judge is going to get too far down the equal protection path when it comes to the right of a city/state to determine how it regulates local businesses.


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