Wednesday, April 07, 2010

Airports and cabs

Just a few scattered nonpokery thoughts here.

1.

On my most recent trips to the airport, picking up and sending off Cardgrrl, I was pleased to discover that McCarran International has finally joined the 20th century--a bit late, but still. Previously, they had these idiotic quarter-fed meters. Because it is impossible to know in advance exactly how much time you'll need to occupy a parking space, that meant either pumping in way more quarters than were really necessary, or cutting it close. The latter option meant either running all the way back out to the parking garage to buy more time if you guessed wrong, or risking getting a ticket. It was a completely idiotic system for such a facility.

Now, though, they operate like every other civilized pay-for-time parking garage. You take a ticket upon entry, and pay for how long you were there on the way out. The potential downside of this is a long wait at the exit. But I have been impressed by the efficiency of the automated booths they have set up. Put the ticket in, put your credit card in, and you're on your way in less than 60 seconds, start to finish.

Efficient and appropriate use of modern technology--from a governmental agency? I was stunned.

2.

I forlornly stood by as Cardgrrl went through the security line when she was leaving. It took a while, which gave me time to watch the cycle of video messages playing on the overhead monitors. Our airport might suck in a lot of ways--no, scratch that; our airport DOES suck in a lot of ways--but we bow to no other air terminal in the world in the excellence and entertainment value of our instructional security videos.

I've watched them in other places, and they are just what you would expect from bureaucracies: lifeless, dull, mechanical messages conveying the point in as drab and unimaginative a form as human minds can conceive. Remember that wonderful Wendy's commercial from the 1980s, about the Eastern Bloc fashion show? (Svimvear! Evening vear!) Same idea.

But not in Vegas! We have Klingons from the Star Trek Experience (now defunct, but who cares?) and knights from the Excalibur Tournament of Kings showing that weapons can't be taken onto the plane. We have Rita Rudner telling jokes, but stopping when she gets to the security line, because humor is not appreciated there. We have Lance Burton, trying to empty his pockets of all metal items, but finding an endless variety of coins and other trinkets everywhere, including behind the screener's ear. We have characters from "Mystere" (whom I wouldn't have recognized before seeing the show recently) trying every which way to put a baby through the x-ray machine, before learning that one is to simply carry small children through the magnetometer. We have a bevy of businessmen performing a synchronized choreography of removing laptop computers from their cases for screening. We have Wayne Newton.

Every one of the dozen or so messages in the loop is well-executed, clever, funny, and yet ends up making its point clearly and memorably. Again--who would ever have thought that governmental lackeys could manage such a thing?

3.

A news story from yesterday illustrates nicely just what is wrong with nearly every governmental attempt to regulate businesses. Las Vegas taxis are, for the first time, now going to be able to accept payment via credit cards--something that obviously should have been happening 20 years ago, like everywhere else in the world.

Reading the summary of the meeting of the Taxicab Authority makes me want to pull out what little hair I have left. They were debating such mind-numbing minutiae as how much of a fee to allow to be charged, and in what form and with what frequency the cab operators would have to report these transactions to the Authority.

Here's an idea: How about just letting the owners/operators of the business decide such things on their own? If they try to charge outlandish fees, people simply won't pay them, or will use other cabs instead. There's this crazy idea called the free market, in which things like that tend to work themselves out to the satisfaction of both vendor and customer. It's as if there's an invisible hand at work. (Great concept, eh? I oughtta write a book.)

Of course, that would also apply to not regulating the number of taxis that operate, or where certain ones are and aren't allowed to pick up fares, how much they can charge, whether to allow smoking, whether to require video surveillance in the vehicles, and so forth. We simply don't need a nitpicking, meddlesome, inefficient regulator trying to micromanage the whole system. Supply and demand is a much better tool than central planning. The Taxicab Authority, and all other similar nanny-state bodies, should ask the Soviet Union about how well centralized management of services and commodities works out. Oh, wait--you can't ask them, because they collapsed under the weight of their own lethargic inefficiency, while sapping the lifeblood of freedom from the millions of souls they enslaved and tormented in the process. Sorry, forgot about that niggling detail for a second there.


And, to anticipate an objection, no, there is not a disconnect between the various segments of this post. I am pleasantly surprised at a couple of examples of nice work from the functionaries that run the airport precisely because long experience has taught us to expect all operations of governments to be as stultifying and aggravating as the lines at the DMV and the post office. If the airport were run by a private company instead of by the government, we would have seen obvious improvements like tBoldhe parking system implemented long before the public agency bothered getting around to it. Governments are necessary evils. We need them for some things, such as courts and criminal law enforcement and protection of individual rights. It's just that those things don't include running airports or taxicab services.


Addendum

I decided to add a note here rather than in the comments section, in response to what "deuce-four" (nice alias!) wrote. The argument, in short, is that having no regulatory authority would mean that there would be bad operators, which a visitor would chalk up to all Vegas cabs equally.

The first problem with that argument, IMHO, is that it would apply equally to any other sort of business: restaurants, hotels, casinos, shows. I.e., it becomes an argument for having a nanny-state bureaucracy trying to ensure that every consumer's every contact with every company is a positive one.

The second problem is that it assumes that governmental agencies are actually effective in screening out the bad apples. But this is patently not so. Vegas cabs are, despite being heavily regulated, notorious for such abuses as long-hauling customers. Is there actual evidence that the average consumer experience is better for having regulation than it would be without them? I doubt it; I think that is merely a guess, and an unwarranted one at that.

The third problem is that it assumes that there is no alternative except for (1) heavy-handed governmental regulation or (2) an anything-goes marketplace that will be littered with bad apples. I think that confuses the familiar with the necessary. Let me sketch what I think would be both most likely and most desirable, if we got local agencies out of the way.

Up would spring private, independent certifying companies. Let's imagine one we'll call White Star Taxi Endorsers. This national company offers certification of quality to cab companies all over the country. For a fee, the operator would get to plaster the WSTE name and emblem on the side of its cabs. Consumers who cared about quality in their cab service and were familiar with WTSE could selectively choose to hire only cabs with that certification. WTSE would require that its endorsed cab companies keep the vehicles spotlessly clean, have friendly drivers who spoke good English and treated people couteously and obeyed traffic laws, never long-haul clients, post fares clearly and have no hidden fees, etc. WTSE would spot-check compliance with local secret shoppers. WTSE would also provide a mechanism for dispute resolution if there were any problem with one of its certified companies allegedly cheating a customer or not performing up to snuff. WTSE might even provide a centralized dispatching service--a single 800 number you could call from anywhere to get a certified taxi (if one is available where you are), so that you wouldn't have to call a bunch of places to find out which local companies carried the White Star seal of approval. (They could even make an app for that!) Of course, maintaining such standards and paying WSTE's fees would mean that certified cabs would cost a little more than others, but in exchange the customer would have guaranteed standards of honesty and quality met. Alternatively, if you care more about low cost than quality, you could pick a taxi at random and take your chances. The point is that it would all be private, all voluntary, all free-market. I submit that the result would be better all around than the ineffective, inefficient, arbitrary, power-hungry local regulatory agencies.

Incidentally, the same would work for other kinds of things that we tend to think of as requiring governmental regulation. Take restaurants, for example. A private certification firm might well do far better than the kind of spotty enforcement of food safety and cleanliness that is typically done by city or county licensing agencies. Customers who care about such things would look for the seal of the company providing the inspection/certification service, and only eat at places endorsed by inspection companies they trust to do a good job.

The great majority of local, state, and federal regulations of business would, could, and should be done better and more efficiently by the free market, if only it were allowed to operate.

19 comments:

deuce-four said...

I completely disagree on the cab issue in regards to setting fees and reporting, etc. The problem with allowing any of the independent operators in that particular industry is that one or a few bad apples could spoil the whole town's reputation for cab drivers. (It's hard to distinguish between different cab companies when you're looking at a bunch of yellow cars and vans that all look similar.)

Think about it: when you visit a particular city and have a bad experience with a cab driver trying to rip you off for too much, do you blame that particular cab driver, or does that factor into how you viewed your whole experience of your visit to that city? Suddenly, that bad experience with a cab driver (and his poor customer service, prices, whatever) has spoiled a piece of your whole trip to that location, and that will be reflected in overall tourism spending for the city as more and more bad experiences accumulate with visitors.

Otherwise, I agree that inefficiencies in government are bad and should be avoided.

Michael said...

Just one other point on the cab issue and don't get me wrong I don't have any doubt that the Taxicab meeting was mindless drivel that focused way to long on minute details.

However, my point is in Vegas, at least on the strip and airport how are you going to create the environment where you don't like a cab's prices don't use it? Everything is queued due to the amount of people and necessity of organization in that case to move things along. Their are benefits to a uniform implementation, especially considered the whole setup isn't a free market, and neither are other businesses across the country.

My point being, it's very easy to point out that something should be free market and left to the businesses to decide and on it's surface I agree entirely. But due to current setup, regulations, and other laws, free market hasn't existed in this country either for the past 50-60 years.

Absolutely agree on the videos at McCarran, great stuff and they do a good job of lightening the mood a bit and taking some of the tension away from the process.

timpramas said...

Sure, while we're at it let's deregulate the banking and financial industries, de-regulated private businesses never rip people off or act in a manner contrary to the public good. I am trying to think of another first world country where so many services are provided by the government at a taxation rate lower than those other first world countries. The Soviet Union comparison is a straw man as no one is advocating a Soviet-style system.

Freight Train said...

Grump -
Be careful of using the term 'niggling'. It's a term that has been misinterpreted in the past. I wouldn't want you to have to write another post explaining the term. (or would I?)

Rakewell said...

Michael:

The current system of queues and all cabs being treated as interchangeable is based on the assumption that because all cabs charge the same regulated fares and live by the same regulated standards, they are all equal. Obviously, if you deregulate the industry, that assumption (already questionable) becomes impossible to sustain, and new ways would have to be found. A hotel, e.g., might make an exclusive contract with a cab company to be available to its customers.

Of course there would be adjustments needed. But that's OK with me. As it stands now, you basically have a system by which, if we compared taxis to hamburgers, every company has to produce a McDonald's burger. Unless somebody breaks the rules, they won't make a burger that is less than a McDonald's, but it's equally true that nobody will make a better one. I just want a system in which people who are content with McDonald's can have it, those who want something better can have that, and those who don't care about anything but price can go for something even dodgier.

Being in favor of choice--what a concept! And yet notice how ridiculous the idea seems to many of my readers.

Rakewell said...

Tim:

You want to hold up the heavily regulated banking and financial industries as an example of how tight regulation has prevented problems? Seriously? What--you haven't read a newspaper in the last couple of years?

Let me suggest this modest plan: Banks can choose to be regulated and insured by the feds, or choose not to be. Those that choose not to be will be able to make riskier investments and thus offer savings customers higher rates of return on their accounts. Regulated banks, as at present, will only be able to offer token rates of return because the range of investments they are able to make (along with other regulations such as reserve requirements) functionally limit how much the bank can make, and thus how much interest it can offer customers.

As long as the customer knows that he is putting his money in an unregulated bank, and there is no federal insurance (there may or may not be private insurance--that would be up to each institution to decide), do you really object to him being able to choose somewhat lower security in exchange for a higher rate of interest on his checking or savings account?

All I'm advocating is for people to be able to make a broader range of choices, in banks, in taxis, in restaurants, and, well, in pretty much everything else. If you find that idea so objectionable, I have to wonder why. What kind of pathological impulse does it take to make you want to compel everybody else to the same restricted range of options that you seem to want? Jealousy? Greed? A desire to control others? I really don't get it.

I just happen to think that more freedom of choice is a good thing. If you don't, well, that's pretty much an irreconcilable difference in preference for how the world should be.

The Soviet Union is not a straw man. It was a whole system based on people thinking the way you do, wanting to control and restrict everybody's choices to the one or few that the central powers had deemed best, whether in political candidates ("Vote for A or--oh, never mind, just vote for A") or coffee (stand in line for hours to receive your ration of the one brand available).

The Soviets would have objected to us having many taxi companies, and would have replaced it with a single, state-run cab service. But when the private companies are so tightly regulated that they effectively cannot differentiate themselves to the consumer, and become functionally interchangeable, and even the number of cars on the street is dictated by the Taxi Authority, it's hard for me to see any meaningful difference between what we have and what the Soviets would prescribe.

You like it that way. I don't. C'est la vie. Vive la difference.

Karl said...

The banking/credit issues we are facing right now happened because the banks were deregulated.

Many people lost a lot of money because they invested in financial institutions that had no oversight, no federal insurance and absolutely no regard for their customer's bottom line. Do you think those unregulated business' made it their goal to inform their customers that they might be completely insolvent in a matter of days because they were trading high-risk financial instruments with absolutely no capital reserves? Of course not. Instead, they lured a lot of investors with grand tales of wealth and fortune, with no need to advise against possible loss.

Communism is a failed theory, just like a completely free market is a failed theory.

As for the taxi thing, come on! There are already alternatives to the taxi stand. Town cars, airport shuttles, limos, public transportation. You can choose to pay more for a luxury town-car or you can stand in line for a cab.

The taxi regulations exist to maintain safety, transparent fees and some form of order when trying to hail a cab in front of a very busy airport. If you took out the regulations, the cabbies would go crazy trying to get you into their car rather than the next one. Ever fly to Mexico City? Trying to leave the airport you get bombarded by cabbies and hustlers demanding you use their services, intimidating tourists and generally making the experience horrendous. That's what a deregulated system looks like, total chaos.

Rakewell said...

Karl:

1. If you think the banking industry was, in any meanginful sense of the word, even "deregulated," you are, frankly, either ill-informed or delusional.

2. People who invested in complex, high-risk financial instruments with no clue of what they were actually buying or what the associated risks were deserve to have lost their money. Caveat emptor. If there was actual fraud, fine, we have legal remedies for that in both criminal and civil law. If they simply went for a get-rich-quick scheme that didn't work out as they had hoped, too bad.

3. I am continually amazed at how many people--how many *Americans*, especially--think choice is a bad thing. "No, please, don't give me more options! I can't handle freedom or complexity! I just want one taxi line, with all the cabs offering identially mediocre service at the same price! And while we're at it, don't let anybody else have more choices, either! Oh, and also, the number of choices in the potato chip aisle at the grocery store is WAY too daunting. Please force stores to remove all but one, so that I don't have to make a difficult decision!"

I take it that you would LIKE the system in the Wendy's ad parody of only one style of clothing to choose from, so as to not be overwhelmed with too many possible selections from too many outlets.

Good Lord, what is wrong with people these days? It used to be a universally agreed upon maxim that more choices was a good thing. No longer.

Anonymous said...

Taxis are an interesting industry, especially in a tourist town. I think Rakewell is making a basic mistake in one of the premises he is using for his argument: that deregulation of taxis will lead to significantly increased consumer choice.

Because a huge number of taxi customers are vistors to a new location, they do not have sufficient time, opportunity, or inclination to learn the differences between the taxi providers. As a result, even in a deregulated market most customers will not actually have more choice. Simply more variability in terms of the service they recieve, with little or no control exerted by the consumer.

In fact, if one looked at the regulation of taxis closely, I wouldn't be surprised to find that most taxi companies support the standardization of the industry. Worry about whether or not they get a 'good' taxi or a 'bad' taxi (whether that be a surprisingly expensive or depressingly bad service) could drive a larger number of travelers to rent a car.

Now I'm not going to go into other arguments. And obviously, there will be some experienced and discerning customers.

But to quote Rakewell: "I just want a system in which people who are content with McDonald's can have it"

The current system is FAR more advantageous to people who are content with McDonald's taxis - and deregulation would mean many people who prefer that level of service would have to work harder or flat be unable to find it.

All that being said, I don't care if taxis get deregulated or not... but I find that often in arguments like its everyone's logic is fine - but their premises are suspect.

Karl said...

1.So, the repeal of the Glass-Steagall act was NOT deregulation? I guess I'm just delusional, then.

2. Caveat Emptor? The investment vehicles offered to the general public were so convoluted and complex that you needed a ph.d in economics to untangle them. Even then, the banking institutions were obscuring their exact financial stability in order to maintain the status quo. With a more transparent system, a lot of the issues in the current economy could have been avoided.


3.You equate consumerism with freedom. I am free to choose a taxi, a town car, a limousine, a rickshaw, a bicycle, etc. for my transportation needs. If I were told that I could ONLY use the taxi cab and that there were absolutely no other choices, then yes, we've descended into communism. But as it stands, the cabbies have to follow regulations in order to maintain order, not to stifle my freedom to choose.

You are essentially proposing that we should get rid of all government oversight.

House on fire? Just scroll through the hundreds of free-market firefighters listed on your "SOS iphone app"

My friend just got robbed in the street? I'll just whip out that to-go menu of boutique police agencies. I don't like the Cops-r-Us company, their uniforms are ugly, I'll use the Police-for-Less guys, they don't charge as much for the ammunition they expend in shooting the petty thief.

Gosh, slippery slope arguments never sound quite rational, do they?

Neil said...

Dereg of cabs in Vegas.......and you think traffic is bad on the strip now?

Rakewell said...

Karl:

1. "Deregulated" does not equal "less regulated." That is, if an industry has 1000 pages of federal regulations, and you repeal 1 page, YOU might call that "deregulated," but I wouldn't.

2. I'm all for transparency. But it is manifestly the case that regulation does not equal transparency. One can have transparency with or without regulation. If you want transparency, I don't know why you're arguing for regulation. They are not the same thing.

3. Your parade of horribles is misguided. First, I said explicitly in the OP that criminal law enforcement is a proper function of government, so your selection of that particular example means that you either didn't bother reading the post, or you are deliberately representing me to take a position that I explicitly rejected.

Second, on what basis do you assume that a privatized fire control system would NOT work. It has been done. If you don't know that, well, then perhaps you should choose your examples with more care. Even today, homeowners in fire-prone areas of California, to choose one example, can buy fire insurance that includes more protection than the overstressed public system can give them when forest fires break out.

To be clear, a public fire department is pretty low on my list of things that I object to governments doing; were I king, I would have so many things ahead of it on the list to privatize that I might not ever get around to it. I'm not the radial sort of libertarian who thinks there is no such thing as a public good. E.g., while I can sort of envision how a fully privatized road system might work, I'm in no hurry to try it out. Not all things that governments do are equally bad or inefficient. But at the same time, it's pretty narrow-minded to look at how things are and assume that's how they must be, without taking critical looks at how things might be different--how they might even be better--if done in some way that is quite unfamiliar at present.

You seem to me to dismiss real deregulation of banking and taxis and fire departments without much more thought than "That couldn't possibly work well." I fancy myself a bit more imaginative than that.

Michael said...

Rakewell, thanks for the response. I don't think complete de-regulation would be a bad thing, my views are similar to yours in that I believe a completely free enterprise would work itself through difficult areas.

I do think there are many that don't understand that it would have to be a complete free enterprise though in order to function in that manner. And as much as I support it, I don't believe society as a whole can except a complete libertarian approach to business and other things for that matter.

To use the cab example at the airport, you make excellent points on what could occur if each company was able to run their business with no interference; but what about factoring in the airport owning a monopoly on the area. What's to stop a cab company from paying the airport for an exclusive contract and passing that price on to the customer? Eliminating their competition and arbitrarily raising rates as they choose.

I realize this is a slippery slope argument, and I do hate to be on the side arguing for a regulation of setting fees (it's my devil's advocate persona). But I guess the question is how far does de-regulation go? Do we de-regulate the airport, allowing it to do as it chooses, airlines? The assumption that de-regulation will force businesses to provide a better product is incorrect. There are just as many cases of a business eliminating their competition and becoming complacent with exclusive agreements or a monopoly as there are for providing a better product.

Anyway, thanks for the discussion on this have always enjoyed your posts.

Anonymous said...

The problem with private certification boards is that the certification is only as good as the certification board's reputation - let's say that you're faced with the prospect of choosing between a Green Star Taxi Endorser cab and a Blue Star Taxi Endorser cab. Which one certifies the good cabs? It's impossible to know unless you've bothered doing the research ahead of time.

Expand the idea to restaurants, spas, and hotels - do you seriously expect everyone to memorize a long list of which are the best certification companies for each industry?

I do agree that the final result would be much more efficient - over many years, like Zagat or Michelin, people come to recognize and trust certain brands. But in that interim period where nobody knows what to trust (or crappy taxi companies intentionally create certification boards that suspiciously sound like the good ones), it's going to be very difficult.

Would the long-term benefit outweigh the short-term confusion? I don't know. But I don't think it's as simple as "capitalism does it better."

Rakewell said...

Michael:

Actually, I think you will find precious few examples of monopolies that have succeeded for long. While in theory I'm mildly in favor of anti-trust laws, I'm persuaded that in practice there turns out to be little need for them, because market forces tend to end their hegemony faster than bureaucracies and courts can.

Are you old enough to remember back to when airlines were required to provide flights when and where the government told them to? Air costs were astronomical--out of reach for casual travel. Allowing them to compete on routes and prices has been an enormous boon to the public.

Are you old enough to remember when there was one phone company with a governmentally approved monopoly on everybody's telephone service? You couldn't even own your telephone--you had to lease it. Allowing competition resulted in unbelievable progress in lowered costs, better service, and technological innovation. Ma Bell had no incentive to change a thing until she started having to compete on the basis of price and service.

For both examples, I remember when the changes were about to happen, and there were "the sky is falling" predictions about how consumers would be horribly confused, how some people would be ill-served, etc. Change always seems scary. But I don't think anybody can look back at what improvements were wrought by competition and wish for the bad ol' days.

My hunch is that we would see the same sort of phenomenon with a free market in taxi service. I can't predict exactly how it would all fall out. Some things would definitely get better, some would probably get worse. But there is a long history of deregulation making things better for the great majority of people, measured by things such as price and consumer satisfaction. I'm willing to give it a try for cabs. Hey, if everybody agrees the result is horrible, we can go back to the way things were. But what if we're missing out on it being better because of misplaced fear?

And yes, airports should be fully privatized. There is no need for governments to run the things.

Karl said...

I apologize for missing that part of your post regarding the police force. I read the post last night and only began to respond to it this afternoon.

I was merely trying to point out that your "list of horribles" was slightly exaggerated. I quote you: "And while we're at it, don't let anybody else have more choices, either! Oh, and also, the number of choices in the potato chip aisle at the grocery store is WAY too daunting. Please force stores to remove all but one, so that I don't have to make a difficult decision!"

Of course I don't want to only have one choice of clothing or one type of hamburger or potato chip to choose from. It is a huge leap of logic to assume that because I don't think deregulating taxi-cabs is a good idea, then I *must* hate freedom of choice and want the government to tell me how to live my life.

Rakewell said...

Anon:

Yes, more choices means that consumers have to do more research in order to optimize their choices. I just happen to think that is a better scenario than being given only a single one-size-fits-all choice. We manage to choose from a bewildering variety of options for cars, clothing, phone services, groceries, life insurance, investiments, etc. I see no reason to think that picking a private certification company to trust would be that hard. All I'd have to do for a first choice is pick up, say, Consumer Reports and see what they have recommended. Not that much effort.

Michael said...

I'm barely old enough to remember Ma Bell, the others I've read about but didn't experience first hand.

For Ma Bell, I do remember the sky is falling mentality, but it could be argued that breaking up a monopoly is a form of regulation.

In the case of the airlines we are also talking about less regulations, not de-regulating. What they are regulating though has drastically changed and the airlines industry has prospered, although not necessarily the airines themselves, which seem repeatedly unable to turn a profit and have been propped up numerous times by our government.

Getting back to the original point, I don't think that letting the cab companies choose their own fare structure would result in the armageddon and as you mentioned if it doesn't work it can change back. (although that would be as difficult as changing it in the first place knowing how political groups do things).

It is interesting to me that we've gotten in to a discussion that is similar to the taxi board arguing about how much fees should be. Although I do believe ours is more interesting.

HighOnPoker said...

Grump:

The reason why cabs did not accept credit cards in the past is because there was no government regulations requiring them to accept credit cards. Why? Because credit card companies take a fee per transaction.

So, you first complain that LV taxis did not accept credit cards, which was resolved by a regulation. It is hard, then, for you to argue that the free market should decide how much they should charge for credit card transactions; as you pointed out, the cab companies will simply make them prohibitive. It's not like people price-shop with taxis.

I'm ok if you are against a law requiring cab companies to accept credit cards, but one cannot argue for regulation requiring credit card transactions and then blame the government for actually enforcing their regulation with specifics.