On Thursday, Minneapolis will be one step closer to joining the 21st century. After months of dragging its feet, the City opted to do the inevitable: allow Lyft drivers to pick-up people within its borders.
Lyft. Uber, Airbnb. Amazon. These are technological disruptions to the status quo that cities are struggling to handle. While other reasons are often cited, this delay comes down to money, and who gets it. For example; Lyft and Uber, while city’s don’t balance a budget on taxi cab fees or taxes, the revenue they generate in is not insignificant. When it comes to App-based ride-sharing services, cities like Minneapolis (or Seattle and even Paris) get little in the way of revenue.
Getting started in the taxi business can be expensive. In Seattle, getting started will cost you at least $50,000 for a license. In New York City, a “medallion” can run upwards of $1 million. The cost in Minneapolis is more sane, but the number of taxi licenses are limited. At best, it’s protectionism by keeping the old guard propped up under the disguise of safety At worst, it creates scarcity and a monopoly develops.
I can’t remember the last time I was happy about taking a taxi. If your cab shows up, the experience usually goes like this: it shows up late, the backseat is messy, the ride costs too much, the driver won’t take a credit card and insists his machine is broken and doesn’t have proper change.
I’ve used Lyft a handful of times, and it is, hands down, a superior service. It’s more reliable, more affordable and more comfortable. Unless given no other alternatives, I will likely never take a taxi again.
In many regards, Lyft is doing what Amazon did in the mid 2000s: it creates harm to the establishment for the benefit of the masses. Taxi cab drivers will need to either adapt or risk having to find a new job. The upside is that a lot of people like me can make $200 on a Friday shuttling people around. The downside is that people with full-time jobs in that industry are without one. It’s benefit to the many with little regard for the establishment.
The tough question: does this hurt the economy? This is where economics gets tricky and unpredictable.
A few years back, I had a debate during a particularly warm Minnesota winter. It was over an article about snowplow drivers and ski slopes being negatively impacted by the lack of snow. Now, the plow drivers and ski instructors are very negatively impacted. But, what about everyone who didn’t have to spend $12 on an extra show shovel? Or, the government agency who saved money by not paying the snow plow driver? Certainly there is a benefit there.
We’ll eventually get things figured out, but were not quite there yet. In the meantime, I think we need to allow these types of services to prosper. Services like Lyft and Uber aren’t going to solve our transportation ills, but they are a good tool that should be placed in a toolbox of other options.