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Jewish World Review December 6, 2012/ 21 Kislev 5773 Let the taxi app roll By Jonah Goldberg http://www.JewishWorldReview.com | If Hollywood remade "The Graduate" and set it in 1980, the one word the businessman would have for Dustin Hoffman's character wouldn't be "plastics." It'd be "medallions." That's because the single greatest investment you could have made over the last 30 years isn't in gold or silver or even Apple stock. It's in New York City taxicab medallions. Since 1980, New York's taxi medallions -- essentially the license to drive a cab in the Big Apple -- have appreciated nearly 2,000 percent, according to one estimate. Prices rose on average 8 percent annually for 30 years, dipping significantly only once -- right after 9/11, calculates economist Ilan Kolet, a writer for Bloomberg. Medallions have a better rate of return than Class A Berkshire Hathaway shares because New York tightly controls the number of medallions -- and hence the number of taxis -- permitted on city streets. In 1937, that number was 13,566, and it's hovered around there ever since. Medallions cost 10 bucks in 1937 (roughly $160 in today's dollars). Last year, two sold for $1 million each. Government-imposed scarcity and inefficiency created that value, nothing else. So it's no wonder that New York's cab industry loves its regulators and vice versa. The Taxi and Limousine Commission exists to regulate taxicabs. If taxicabs -- as we know them, at least -- go out of business, what's the point of having a commission? Such thinking has given birth to a national movement to kill Uber and companies like it. A San Francisco start-up, Uber is a car service that you "hail" with an app on your smartphone. In Washington, where I live, it is a life-changer. It's a bit more expensive than conventional cabs, but because I can't hail a cab in my suburban neighborhood and calling for one can take hours (if they show up at all), a fast and reliable car service is a real boon. The fact that it's a much nicer car that has been cleaned more than once since Jimmy Carter was president is a bonus. When Uber enters a new city, the last thing it does is ask for permission. Instead, it just adheres to existing laws and hopes it can build up enough popularity before the regulators come to shut it down. "If you put yourself in the position to ask for something that is already legal, you'll find you'll never be able to roll out," Uber founder Travis Kalanick told the New York Times. "The corruption of the taxi industries will make it so you will never get to market." In Washington last summer, it was a very close call. The entrenched interests were desperate to kill Uber. The customers -- a.k.a. local voters -- loved it and successfully got the company a reprieve until the end of the year. In 2013, champions of the old way on the D.C. council will take another stab at it, in both senses of the word. And the council will have new ammo on its side. The International Association of Transportation Regulators (who among us doesn't love their work?) met in Washington last month to formulate ways to restore the status quo ante. Matthew W. Daus, former head of the N.Y. taxi commission, is the president of IATR, and he talks about Uber the way Iranian censors talk about satellite dishes. It's a dangerous "rogue" app, Daus claims. These big-city regulators nationwide proposed guidelines that have nothing to do with making things better for consumers. IATR wants to ban using GPS devices as a meter to determine fares. Why? Because that's how Uber does it. Another proposed rule would ban receiving a hail over a smartphone while driving. My favorite proposal would simply ban luxury sedan drivers from taking a job that was requested less than 30 minutes ago. This is like banning a pizza company from promising to deliver in 30 minutes or less because that would be unfair to the established pizza shops that can't manage to deliver hot pizza. Of course, one frustration I have is that Uber's core customers are precisely the sort of affluent and hip urbanites who routinely vote to empower regulators to meddle in more important parts of our lives -- in health care, manufacturing, etc. And while the thought of them getting what they deserve has its appeal, I'd rather Uber survive and its customers learn from its example. That would be a lesson worth its weight in medallions. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. To comment on JWR contributor Jonah Goldberg's column click here. Jonah Goldberg Archives © 2006 TMS

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