My wife and I obey a simple rule regarding our leisure travel: She makes the plans; I follow them. Since she enjoys researching hotels and locations, and my tastes overlap with hers, we find it easier for her to do all the planning without any inputs or complaints from me. This system has worked well for the entire 16 years of our marriage. I never grumble, and she gets to book the precise trips she most desires. However, it has also led to my “learned helplessness,” whereby I no longer know how to book a flight, arrange a hotel room, or check in for a seat assignment. This won’t be a problem as long as she’s alive. But a recent incident scared me into the realization that even with her travel-arrangement expertise, serious troubles may still arise.
This past December we went to Florida for a week in which she played golf and tennis while I and my cancerous carapace, in order to avoid the sun, read books in the hotel room. We had to meet at an NYC airport but from separate locations, a simple complication that suddenly induced panic in this learnedly helpless traveler. Since I had not yet opened an Uber account, I asked if she could arrange for a car to pick me up at my office. After shaking her head in disbelief at my ridiculous incompetence, she arranged for one of her employer’s car services to send a driver. Unlike Uber’s smartphone interface, which tells you where to meet your driver, the car-service dispatcher who called me barked some unintelligible gibberish into the phone before rudely hanging up. I took a wild—and incorrect—guess as to which corner the dispatcher referred. Instead of calling the dispatcher back, an effort I knew would be completely futile, I called my wife to see if she knew a better way to locate my driver. Exasperated, my wife huffed into the phone, “Stay right there.” One minute later she came back on the line to tell me the driver had been waiting for me all along at Mercer and West 4th Streets, a corner that sounded nothing like the frazzled dispatcher’s earlier grunts.
I ran over to the SUV, hopped in the back, and asked the driver, “Hi, are you here to pick up Brennan?”
As he revved the engine and turned to face me with an impatient grimace, he sneered, “Yea. What took you so long? I’ve been waiting here for ten minutes.”
After that friendly greeting, the ride to JFK got even worse. The driver boasted of having driven more than “five million miles” as a car-service and yellow-cab driver, an accomplishment he thought gave him carte blanche to tailgate and honk at every vehicle he deemed to be operating improperly. He cursed Uber drivers as we passed them. During our trip, and without my asking, he recounted his life story—raised in Brooklyn, drove a cab, went broke, moved to the Poconos to save money, drove a black car, went broke, wrote for the car-service newsletter Black Car News, and now finding himself broke yet again, couldn’t make more than $100 per day thanks to the oversupply of for-hire cars that Uber, Lyft, and Via had dumped on the Manhattan market. He had lost his credit cards and his health insurance. He got increasingly angry and unbalanced as we approached my terminal. I was just happy to have arrived at JFK alive. And like the old movie cliché, he peeled away after I closed my door.
When I finally met up with my wife at the gate I told her I’d had the ride of a lifetime to the airport. “Some nut job who was cursing out Uber, talking about how an honest man can’t make a living driving anymore, and yelling at me for not getting to the secretly assigned corner promptly, drove me here and had me scared out of my wits. I think he’s clinically unstable.”
Without taking a breath, my wife said, “Oh my god, was his name Doug Schifter?” I told her it was. “I had him twice, years ago, and then told the office I would never ride with him again because he scared me so much.”
I broke in, “I wish you had told them that for me, too, but at least I made it here.” Karma comes full circle: That’s what I get for delegating 110 percent of my travel logistics to someone else.
On February 5, 2018, my driver, Doug Schifter, drove up to the front gate of New York’s City Hall and shot himself in the head with a shotgun. He left a lengthy Facebook screed detailing his inability to make money despite driving over 100 hours per week. He blamed New York politicians like Michael Bloomberg, Andrew Cuomo, and Bill DeBlasio for selling out to the wealthy tech titans taking over New York’s car-service industry. Not surprisingly, those who commit suicide don’t always make the best politico-economic arguments. A quick review of New York City’s for-hire car regulation since World War II shows how monopolists eventually got their long deserved comeuppance. But it’s tragic when naive underlings in the monopolists’ cabal get taken down with it.
In the early 20th century New York City issued 13,587 taxi medallions after some bureaucratic genius declared that to be the exact number of cabs needed for New York’s streets. Over the years the price of those medallions, which grant the monopoly right to pick up street hails, rose to a high of $1.3 million in 2013. So to start operating a yellow cab and charge $12 for a crosstown fare, a driver had to fork over more than one million dollars. Drivers bought these medallions, expecting to drive for several decades and then cash out later and retire on the proceeds of the increased medallion value. By limiting the supply of medallions, New York City created a secondary market whose asset rose faster than inflation despite no productivity gains, an economic anomaly explainable only by the “greater fool theory.”
Any tourist or New Yorker who has ever ridden a New York City taxi knows that the drivers take pride in abusing their monopoly status. New York’s yellow cabs gain much of their notoriety from the cramped quarters caused by the Plexiglas divider occupying half the back-seat leg space. In the last few years all cabs have installed obnoxious television sets, most of which cannot be muted, so a B-list celebrity will narrate your trip. Drivers talk on their phones with impunity despite a city law forbidding any phone use by car-service drivers. They honk nonstop in gridlocked traffic, and when I ask them to cease, they giddily tell me, “But that’s how we do it in my country.” Lastly, and here we stray into the culturally sensitive fray, the smell of the cars’ interiors will kill you if the drivers’ carelessness doesn’t first. Many drivers hail from countries where catnip and lottery tickets outsell deodorant. And since they drive 12-hour shifts, they often have a meal, or the malodorous remnants thereof, spread across the front seat. I’m American, so I just don’t understand how one can expect pungent body odor and food leftovers not to bother others, especially paying customers. If these behaviors annoy you, you are free to save your receipt, contact the Taxi & Limousine Commission, and demand a hearing. The driver can delay the hearing up to three times, about the number of adjournments necessary for you to realize it’s just not worth your time. In summary, yellow-cab passengers have been prisoner to this horrible setup for too long.
Now compare this experience with Uber. If your Uber driver commits any of the horrors detailed above, or if the car’s interior is not up to snuff, you instantly rate the driver “one star” on a five-star scale on your smartphone. Some Millennial will contact you in short order, listen to your complaint, and often refund your fare. While most New Yorkers are not looking for free rides this way, they do prefer to ride in cleanliness, silence, and peace, something rarely afforded in a yellow cab, with the ceaseless honking, driver yelling into his cellphone, and choking stench ruining the experience.
New Yorkers have voted with their smartphones and opted to ride with Uber, Via, and Lyft. Since Schifter’s suicide, five more medallion owners have killed themselves, citing the mounting financial burden of financing a million-dollar medallion along with the taxi industry’s declining market prospects. I expect this sad state of affairs to continue. But it’s hard to summon pity for a monopolist group that has treated its clientele so badly for so long. Technology brings with it good and bad in the market realm. Uber et al. have effectively cut out the middleman and his egregious $1.3 million entry fee, provided a more comfortable and safer service, and done it all without raising prices too much. And for whatever price increase there has been, there has been a much greater increase in the quality of service. So consumers have won as technology has advanced in the taxi industry. Early 20th-century Austrian finance minister and later Harvard professor Joseph Schumpeter presciently described what he called the “gale of creative destruction” as “[the] process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” The gale destroys many valuable relationships and traditional processes. But it also has the ability to bring new, more productive ones into use.
The gale creates undeniable human costs, as seen in the suicides of Douglas Schifter and the other drivers. Some individuals handle change better than others. Some mistakenly assume their monopolistic ability to gouge and mistreat their customers will last forever. When their tricks no longer work, those same bad economic actors can either adapt to the new game, or bitterly call it game over and not even try.
Leave a Reply