Monday, December 16, 2019

the last book I ever read (Super Pumped: The Battle for Uber by Mike Isaac, excerpt eight)

from Super Pumped: The Battle for Uber by Mike Isaac:

Taxi owners knew they had to stop Uber. In some major cities, taxi owners had paid hundreds of thousands of dollars to purchase “medallions,” taxi-service permits required by the local government. Medallions could be absurdly expensive, upwards of a million dollars in peak markets like New York City. Drives and dispatchers took out huge mortgages to buy them. The limited number of medallions created an artificially constrained market, which meant cab drivers and taxi company owners could charge enough to earn a decent living (and pay for the medallion).

Then Uber showed up. The medallion system—a market based entirely on scarcity and exclusivity—was threatened to its core. With UberX, the company’s peer-to-peer service, anyone with a car could drive for Uber. That simple concept destroyed Big Taxi’s barrier-to-entry system, sending the price of medallions plummeting. In 2011, medallions in Manhattan were going for $1 million apiece; six years later, one fire-sale auction of forty-six medallions in Queens fetched an average price of $186,000 per medallion. Overnight, taxi drivers whose entire livelihoods were tied up in paying off an expensive medallion went underwater.

Cabbies were aghast. Doug Schifter, a livery driver from Manhattan, faced financial ruin after the rise of Uber wrecked his income driving for traditional car services. Schifter drove to City Hall in Lower Manhattan on a cold Monday morning in February 2018, put a shotgun to his head, and pulled the trigger.

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