5

Because of the limited space available, the title could be raising an unanswerable question. Given changes over time and the variety of viewpoints within the left wing, the answer could depend on both the period of time in US history and on what segments of the left are being considered.

However, if we consider something like New York City taxicab medallions that allow somebody to compete in offering taxicab rides in New York City, we see that there is a vested interest, based on wealth, and that it could be inherited. Obviously the main attraction of not being prohibited by law from competing with traditional taxicab companies -- from the point of view of drivers who provide rides in exchange for payment via Uber or Lyft -- isn't an opportunity to cash in on taxicab medallions that they either inherited or bought with inherited money.

Given the traditional opposition to inherited wealth or privilege in left-wing manifestoes, there is a prima facie case to be made that there's nothing left-wing about protecting traditional taxicab operations from competition. On the other hand, people on the left don't simply bring with them a shared ideology and otherwise operate as isolated individuals. Maybe sociological dynamics play a role on the left.

Thomas Kuhn examined scientific revolutions and emphasized that understanding sociological dynamics could explain what might not be well explained by simple ideology acting alone. Is there a sociological argument to be made to explain why the left wing would tend to oppose laws that would permit competition with traditional taxicab operations? There is an ongoing transportation revolution, that may in future include driverless cars, and perhaps some habits of left-wing thought will quickly become obsolete in the new environment.

  • I'd say comparing a cap medallion to the untaxed tranfer of massive previously-untaxed wealth that serves to create a permanent idle aristocratic class is probably not an exercise in accurate and relevant equivalence. – PoloHoleSet Oct 25 '19 at 14:39
  • What previously untaxed wealth do you have in mind? Also, could you copy and paste from the question some actual sentence or sentences that you interpret as being an inaccurate comparison? Given the limited space available for a comment, I recommend that you copy and paste the first five words and then write dot dot dot followed by the final five words of the excerpt that you have in mind. – Ren Eh Daycart Oct 25 '19 at 14:45
  • @PoloHoleSet "serves to create a permanent idle aristocratic class" looks like present tense. So we're not talking about increasing the size of an existing, idle, aristocratic class, but instead are talking about some processes presently creating a new class, and it is somehow known that the new class will be permanently idle, in contrast with Hitler's Reich that was boasted to be destined to last for a thousand years. What are you talking about? You're getting it from somewhere, but I don't remember anything like that in the question that I wrote. – Ren Eh Daycart Oct 25 '19 at 14:48
  • if I earn a million dollars, make investments that appreciate into hundreds of millions, and pass that to my heirs, that capital appreciation is never taxed in my lifetime, and while it may get hit by the existing inheritance tax, there are those who want to do away with that - the capital gains are never, ever taxed if cashed in upon inheritance. My heirs, and their heirs, on into perpetuity will be ultra-wealthy with never having earned a penny of their wealth. A healthy inheritance tax blunts that. That is different, in scale from a single taxi medallion, or small family business asset. – PoloHoleSet Oct 25 '19 at 15:13
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    Not sure where I ever claimed otherwise. I'm not talking about a lower capital gains rate, I'm talking about unrealized capital gains NEVER being taxed, at all, ever, which is what happens with any capital gains that fits under the estate exemption cap, or if one were to do away with an inheritance tax altogether. Your entire rebuttal seems targeted at a straw man you set up. Income is income, and should be subject to taxes. Estates should be taxed heavily, as well, since the argument that the government has done nothing to deserve that money also applies to heirs. – PoloHoleSet Oct 28 '19 at 23:01
7

The left generally prefers more regulations protecting the workers and consumers. The (local) government licensing taxi cabs is generally seen as along those lines. The non-traditional competition you speak of is generally seen on the left as erosion of those regulatory protections, by replacing them with the self-regulation of big business like Uber etc.

Also, the taxi licenses don't inherently have to be tradeable on the open market (and thus don't have to be inheritable wealth). Why the US mostly knows no other system is a good separate question.


Just to be more clear on this, the US [open-market transferable] medallion is a licensing system initially conceived to allow drivers to make a living just by limiting competition, but ended up as a boon to poorly regulated lending companies and hurting the same drivers it was intended to protect. According to the NYT, at the peak of the boom[-bust] cycle in NY city, 90% of the taxi drivers' revenue (4500 out of 5000 dollars per month) was going toward financing the loan for the medallion.

Many of the [NYC] drivers are [relatively] poor immigrants. Many of the medallion financiers are/were politically well-connected businessmen. One can argue the system was bound to create systemic corruption. In the words of one medallion broker quoted by the NYT: “If governing body does not care, then free-for-all”. So yeah, capitalism innovated around a measure intended to help the drivers stay afloat by diverting most of their revenues to lenders. Note that in most of the EU taxi licenses are/were not transferable, so there was no comparable crisis in the EU (except in France maybe, which introduced non-transferable licenses in 2015). In hindsight, the US medallion system is/was a bad combination of tight market restrictions (on license supply), with laissez-faire on transfers and their financing.

Whether people on the left in the US realize how bad a combination the medallion system is, is an interesting question. Insofar I've seen only calls from national-level US politician (e.g. from AOC) to bail out the taxi drivers and perhaps regulate lending better, but not do anything more substantial (e.g. France-like) to reform it. Alas, since taxi licensing is a local matter, most high-profile US politicians (e.g. those running for presidency) seem to have avoided taking a position on it, although they seem not to miss the opportunity to slam Uber and Lyft for their [contracting] approach to their drivers.

I did find some calls for substantive taxi licensing reform from the Robert Schalkenbach Foundation

The city could accomplish all of these goals more effectively if the taxi medallions were leased rather than sold. The lease could be renewed annually or every few years. The number of cabs on the street could be regulated more responsively, with the number of medallions available increased or decreased on an annual basis. The city would derive a revenue stream from existing leases each year, rather than, as in previous decades, not receiving any revenue from the large number of taxi medallions that were sold. [...]

Moreover, how much clearer would the financial transaction have been to the taxi drivers if they were leasing a medallion annually, rather than taking out a loan to purchase a medallion? [...] Would the city even charge $5,000 per month for a medallion? And if the city did, wouldn’t it be clearer to the driver that this was an operating cost, not a road to financial independence?


On the worker-rights angle, see this piece in Vox for example; it's longer but these are the opening paragraphs:

Last week, California lawmakers passed AB 5, a bill that’s expected to upend the business models of gig economy companies like Uber and Lyft that depend on the cheap, relatively unregulated labor of a contractor workforce. Experts predict that the law could cost Uber an additional $500 million in annual operating costs alone if it ends up compelling the company to reclassify its workers as employees, who would be eligible for minimum wage, health care, and overtime protection.

But Uber and Lyft say they’re not worried. In fact, both ride-hailing companies say the new law doesn’t force them to make the costly change of turning their drivers into employees. That’s because to do so they would have to consider drivers as part of their “usual course” of business. Uber has said its drivers aren’t because the app is really a tech platform for “digital marketplaces” and not primarily an employer of drivers.

Labor groups and politicians are seething over Uber’s argument. In interviews with Recode, they said they see it as another way that Uber and Lyft (which also said it won’t change its business) are trying to get out of providing basic employment protections to their hundreds of thousands of drivers in California.

“They’re digging in their heels like a child would and saying, ‘we refuse to change,’” said Veena Dubal, a law professor at UC Hastings who researches the gig economy. “[Uber’s chief legal officer] Tony West on some level probably realizes how preposterous it is, but that’s the line they’ve taken, and they have to be consistent with it.”

And UNCTAD has this consumer angle:

As an ongoing court case in the United States shows, however, Uber also faces accusations that despite seeming cheaper than traditional taxi services its data-driven algorithm are unfairly fixing prices in breach of competition rules.

The case of Uber raises the broader question of whether, rather than driving down prices and increasing quality, data-dependent commerce could have anti-competitive elements, harming consumers all over the world.

  • How about the fact that medallions in cities like New York used to cost millions and were never owned by actual taxi drivers? Did the left ever address this conondrum? – JonathanReez Oct 25 '19 at 3:44
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    @JonathanReez: according to this UK page most countries don't even limit the supply of taxi licenses. My answer wasn't intended to be a defense of the medallion system, which I think it's quite broken, but rather, to say what a generic "leftist" would say about letting Uber (or similar companies) operate unrestricted. In some EU countries (sans transferable medallions) Uber actually doesn't have the lowest price. – Fizz Oct 25 '19 at 3:57
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    "and were never owned by actual taxi drivers? " -- er, what? "Of New York’s 13,500 medallions, about 3,500 are owned by people who also drive the taxi themselves, according to the city." wsj.com/articles/… – BurnsBA Oct 25 '19 at 13:10
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    @JonathanReez Medallions selling for millions is a recent phenomena. Initially they sold for $10, they were $25k in 1969, $80k in the ‘80s, and $200k in 2002: still relatively affordable for the middle-class. It was only since 2002 that the price rose exponentially. This New York Times Article has a graph of prices since 1995 as they rose from $200k to $1M and fell back down – divibisan Oct 25 '19 at 14:25
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    @KDog How is regulating which types of vehicles can become taxis not beneficial to consumers? It ensures they have sufficient safety features, can fit most people comfortably, and can accommodate disabled customers. – Luck Oct 25 '19 at 21:02
3

This is an answer in two parts, first looking at sociological reasons for left wing support of a restricted market; but I conclude with some thoughts that protecting the taxi industry is actually cross-paritisan.


Is there a sociological argument to be made to explain why the left wing would tend to oppose laws that would permit competition with traditional taxicab operations?

Let me start with a mention of "Moral foundations theory" that was

first proposed by the psychologists Jonathan Haidt, Craig Joseph and Jesse Graham, building on the work of cultural anthropologist Richard Shweder; and subsequently developed by a diverse group of collaborators, and popularized in Haidt's book The Righteous Mind.

The original theory proposed five foundations: Care/Harm, Fairness/Cheating, Loyalty/Betrayal, Authority/Subversion, and Sanctity/Degradation. It now includes a sixth parameter, Liberty/Oppression;[3][4] while its authors remain open to the addition, subtraction or modification of the set of foundations.2

(This is not without its criticisms, but you asked for "a sociological argument")

What I wanted to highlight is this paragraph summary on the relation to political beliefs

Researchers have found that people's sensitivities to the five/six moral foundations correlate with their political ideologies. Using the Moral Foundations Questionnaire, Haidt and Graham found that libertarians are most sensitive to the proposed Liberty foundation,[4] liberals are most sensitive to the Care and Fairness foundations, while conservatives are equally sensitive to all five/six foundations.[6] Joshua Greene argued however that liberals tend to emphasise the Care, Fairness and Liberty dimensions; conservatives the Loyalty, Authority and Sanctity dimensions.[17]


I want to now focus on this "Care and Fairness" aspect as it relates back to the original question ("Is there a sociological argument to be made to explain why the left wing would tend to oppose laws that would permit competition with traditional taxicab operations?")

Let's take a look back to New York in the 30's before major regulation:

In the 1930s, the growth in unemployment and unsold automobiles produced a drastic increase in the number of taxicabs.10 While fewer people could afford to ride a taxi, the number of taxi cabs skyrocketed, while occupancy rates and revenue per taxi declined.11 Capacity and demand were moving in opposite directions.

An editorial published by the Washington Post in January 1933 illustrates the public's perception of the chaotic state in which the taxi cabindustry found itself:

Cut-throat competition in a business of this kind always produces chaos. Drivers are working as long as sixteen hours per day, in their desperate efforts to eke out a living. Cabs are allowed to go unrepaired....

Together with the rise in the accident rate there has been a sharp decline in the financial responsibility of taxicab operators. Too frequently the victims of taxicab accidents must bear the loss because the operator has no re-sources of his own and no liability insurance. There is no excuse for a city exposing its people to such dangers.12

Economists of the era argued that taxis were a declining cost industry; excessive competition between numerous small operators decreased carrier efficiency and increased consumer costs.13 The U.S. Department of Transportation also summarized the tenor of the times:

The excess supply of taxis led to fare wars, extortion, and a lack of insurance and financial responsibility among operators and drivers. Public officials and the press in cities across the country cried out for public control over the taxi industry.

The response was municipal control over fares, licenses, insurance and other aspects of taxi service.14 [1]

To summarize the above: too many taxis, means drivers are working too long, and because there are so many drivers any one driver can't make as much, and some can't even afford insurance. There's at least a few "care and fairness" complaints -- drivers, through no fault of their own, make less than they did several years ago; or a regular citizen has to incur additional costs of an accident when getting in an accident with an uninsured taxi driver.

Paradoxically, deregulation (now some decades later) also resulted in higher taxi fares:

One would expect that excess capacity would drive prices down, as it allegedly has, for example, in the deregulated airline industry.187 Paradoxically, precisely the opposite has occurred in the deregulated taxi industry. As Price Waterhouse observed, "prices rose following taxi deregulation in every documented case."'188

Professor Roger Teal of the University of California studied pricing at nine cities which deregulated (i.e., Fresno, Kansas City, Oakland,Phoenix, Sacramento, San Diego, Seattle, Tacoma, and Tucson). He concluded, "In every city in this study taxi rates are now higher in real terms than before deregulation, often by a substantial amount."'189 Before de-regulation, in none of these cities did rates rise as rapidly as the Consumer Price Index [CPI]; after deregulation, price increases exceeded the CPI in each of these cities.190 Professor Teal concludes, "taxi rates may have increased as much as 10 per cent more in the deregulated cities than they would have done under continued regulation.' [1]

The whole article [1] is good, but the key thing to note is from the abstract:

Beginning a half century later, more than 20 cities, most located in the Sunbelt, totally or partially deregulated their taxi companies. However, the experience with taxicab deregulation was so profoundly unsatisfactory that virtually every city that embraced it has since jettisoned it in favor of resumed economic regulation.

And the summary list on page 102

The experiences of these cities reveal that taxicab deregulation resulted in:

  1. A significant increase in new entry;
  2. A decline in operational efficiency and productivity;
  3. An increase in highway congestion, energy consumption and environmental pollution;
  4. An increase in rates;
  5. A decline in driver income;
  6. A deterioration in service; and
  7. Little or no improvement in administrative costs.

Some 40-60 years ago cities experimented with deregulating the taxi industry, but this resulted in widespread inefficiencies -- for both passengers and drivers. Since then, the majority of cities have reverted to a protected industry.

Does that mean protection is left wing? Arguably, deregulation was a right-wing proposal to let the free market decide, at whatever cost to existing businesses (including solo driver-owners). However, it seems the results from deregulation were so bad that the majority of people (in a cross partisan manner) agreed it was a bad idea but for different reasons -- on the left (perhaps) that drivers and passengers were harmed, and on the right (perhaps) that businesses (including solo driver-owners) where harmed.


[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2241306

  • 1
    Related info, but not used in this answer: Municipal Code of Chicago on Taxicabs: chicago.gov/content/dam/city/depts/bacp/publicvehicleinfo/… ----- Chicago fails to auction any medallions fall 2013: wapo.st/1oXVK3h ---- NY taxi wiki en.wikipedia.org/wiki/Taxicabs_of_New_York_City – BurnsBA Oct 25 '19 at 15:09
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    Thank you for the effort. Before versus after regulation doesn't seem to address the question, but is more a habit of thought of the general public in classifying deregulation as right/libertarian and regulation as left/big-government. The requirement that a driver be insured is very basic and applies to all drivers, not just taxicabs, so I see regulation as a strategy for compliance, to be contrasted with allowing non-compliance and then trying to deal with the outcome via courts. The left in the USA nowadays wouldn't try to forbid carpooling to maintain customers for taxicabs. – Ren Eh Daycart Oct 25 '19 at 22:04
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    Nor would a restriction on carpooling -- in places where taxicabs don't have enough customers -- be an example of a regulation imposed on the taxicab industry. On the contrary, it would be a restriction indirectly on all who want transportation options, but taxicab lobbyists may seek to reduce the available options, while simultaneously distributing boilerplate propaganda about how their industry is dedicated to ensuring that the general public has excellent transportation options available. Being specialized to provide a given service doesn't automatically align interests with consumers. – Ren Eh Daycart Oct 25 '19 at 22:12
  • The question asks for sociological explanations for protection -- why might a political group want regulation. This answer looks at the causes for regulation (including protection from competition), the consequences for deregulation (including protection from competition), and what political groups might support either decision. – BurnsBA Oct 29 '19 at 16:35
-6

The social dynamic is very straightforward. Government has a vested interest in creating an artificially high market for medallions by limiting supply, as do medallion holders. Left-wing Politicians now have captured an industry, and will artificially keep fares high or provide barriers to entry (restricting medallion sales) into the market in exchange for political donations from that same group. Leftists have done exactly the same thing in teaching, banking and other highly regulated industries.

It's not surprising then almost all of Uber's political donations go to Democrats as Uber does not want to be regulated in the same way as taxis are generally, nor does Uber want Democrats only to have taxi industry representatives interests at heart without them having a seat at the table.

More than $309,000 of this overall total was given to Democratic party committees and candidates and about $9,000 was given to Republicans.

And we do know that Big Taxi is lobbying fiercely, massively overspending the ride-share participants. These donations are targeted at the state level, and no party affiliation is given.

The taxi cab industry has donated at least $3,500 to the political war-chests of state legislators for every $1 that Uber, Lyft and Sidecar gave.

While at the macro level I haven't been able to locate overall national figures, not surprising since this is a state and local issue, anecdotally there is evidence, that in some markets, like New York City and Chicago heavily favor Democrats.

This dynamic, some call crony capitalism, produces brittle markets highly resistance to change and innovation, is bad for consumers, and even investors, and really exists only to serve the benefit of the Leftist political class.

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    This answer seems to be a complaint about capitalism, and users the words "Leftist" and "Left-wing" as synonyms for pro-business interests. See "This dynamic, some call crony capitalism" – BurnsBA Oct 25 '19 at 13:33
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    @BurnsBA Good god man, no. It's about the corruption of capitalism. – K Dog Oct 25 '19 at 13:37
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    @KDog Because I read the website? And because people arent lobsters KDog. Its rather simple. Nobody needs to read your social darwinist genetic predeterminism fanfic. – Tal Oct 25 '19 at 14:14
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    @KDog The purpose of medallions is to keep the number of taxis constant – that means, there’s no recurring profit (that’s what taxes on cab rides are for) – you sell them once and that’s it. In NYC, medallions were sold twice: in 1937 (for $10) and then a few more in 1996 (both under Republican mayors, I might add). Your assertion that they are a profit-center for the government isn’t backed up. – divibisan Oct 25 '19 at 14:20
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    Frankly the Uber donations seems more intended to pacify/bribe the Democrats from any ideas in regulating the Uber business model. Especially with Warren and Sanders having a made a public point of it. – Fizz Oct 25 '19 at 14:36

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