Last month the city of New York raised more than $200 million by auctioning off 200 new taxi medallions essentially, the right to operate a yellow cab in the city. Some 2,000 such medallions are likely to be sold in all, which means $2 billion of much-needed revenue for New York, if prices remain high. But will they? It s surprisingly easy to justify a million-dollar price tag1 for a medallion but in order to do so, you need to assume that medallion owners income will remain constant, in real terms, over time.
Historically, the impressive political power of the medallion owners has helped to keep their income steady. They re good at keeping the total number of medallions relatively low, and they re also good at pushing through periodic increases in metered fees. The combination of the two allows them to rent out their medallions to drivers for about $75,000 per year.
That s a very good deal for the medallion owners, and a much less good deal for the taxi drivers, whose income, says taxi commissioner David Yassky2, is grindingly low something less than $150 per day3, for a 12-hour shift.
Essentially, every time you take a cab, your money gets split roughly evenly between the driver and the medallion owner. Which means that when a company like Uber comes along, it can offer lower fares to riders and substantially higher income to drivers a win for everybody except the medallion owners.
The key datapoint came in October, when Uber said in a blog post4 that when it lowered fares for its UberX product, its drivers income actually went up rather than down: in Boston, it rose by 22% per hour, which is a lot of money. The result has been that UberX is now priced near or below prevailing taxi rates5 in most cities: in Washington DC, for instance, UberX costs 18% less than a taxi6. And the drivers of those cars are making significantly more money than they would make if they were driving a cab.
Details on driver income are a bit sketchy, but at least one driver seems to be grossing over $1,000 per day7, on good days, while Uber s own advertising8 talks about an income of $70,000 per year. If you re tactically smart as an UberX driver driving towards hotels when empty, or waiting for a while after dropping a passenger off at the airport in the hope of picking up a fare back then a six-figure income does not seem to be uncommon. And demand for UberX cars continue to exceed supply: the only reason they re not even cheaper than they are, in cities like New York, is just that the cheaper they get, the more people want to use them, and Uber just doesn t have enough cars and drivers right now to meet such demand.
We ve already reached the point, then, at which it makes sense for almost any taxi driver who doesn t own his own medallion to give up the rickety old yellow cab, with all of its onerous regulations9, and just drive an UberX instead. I m sure that many have already done so, and that more will follow suit over the course of 2014. And while for the time being there s probably a big enough pool of cab drivers that new ones can be found to replace the people who have started driving for Uber instead, eventually the medallion owners are going to have to start cutting their drivers a sweeter deal, to prevent them from defecting to the competition.
Back in 1999, Jim Surowiecki10 proposed that we should deregulate cab fares in New York. That was a bonkers suggestion back then, because in an era of street hails, you need to know how much a cab costs before you hail it. But with the arrival of apps like Uber, we re getting much the same effect. When you e-hail an Uber, you have just as much of an idea how much it s going to cost as you do when you hail a cab. And so then the various services can effectively start competing with each other on price and service.
Intuitively, that sounds like a bad thing for drivers, and I understand why cabbies in San Francisco might consider Uber and its ilk to be the enemy11. After all, more competition means lower prices, right? And if passenger start using taxi alternatives rather than taxis, that means less income, overall, for the taxi industry.
But in this case, the cab drivers at least the ones who lease their cabs on a per-shift basis should think of themselves less as small business owners, selling their services to passengers, and more as valuable employees, selling their services to either taxi-fleet owners or to companies like Uber. Looked at that way, more competition means higher wages, not lower income.
Precisely because taxi fares are highly regulated, cab drivers have historically had almost no bargaining power when it comes to their own income. The fares are set, and even if fares rise, the fleet owners will waste no time in taking advantage of that rise in fares to simply raise the cost of leasing a cab. Especially in New York, where there s a limited number of medallions, anybody who wants to drive a taxi basically has to just accept whatever deal is offered.
But now they have a choice, which is excellent news for them, and also for the public as a whole, which clearly loves the ability to easily order cabs from indoors, rather than having to take their chances on the street or on the phone with a dispatch service of dubious reliability and punctuality.
On the other hand, it s not good news for the owners of the fleets. If they have to pay more to retain their drivers, that s going to eat into their profits. And in turn, that will mean that they re in turn willing to pay less for medallions.
That s fine by me. So long as the price of a medallion stays above zero, the number of taxis on the street will remain constant, and the arguments against Uber12 which are based on the idea that taxis will become scarcer won t apply. What s more, the continued existence of all those taxis will ensure that Uber will find it difficult to raise its rates. After all, it has already discovered that demand is much greater when prices are taxi-like than when they re significantly more expensive than taxis.
But I do think that as UberX catches on, along with its various competitors, the price of a taxi medallion is sure to fall. And that s especially true in a world of rising interest rates, where medallions are valued on a discounted cash-flow basis. So while both drivers and passengers should embrace the arrival of UberX, if I was a medallion owner, I d be worried. And I certainly wouldn t be looking to buy new medallions, at a million bucks a pop.
- ^ justify a million-dollar price tag (blogs.reuters.com)
- ^ David Yassky (www.nytimes.com)
- ^ less than $150 per day (blogs.reuters.com)
- ^ blog post (blog.uber.com)
- ^ below prevailing taxi rates (www.chicagogrid.com)
- ^ 18% less than a taxi (blog.uber.com)
- ^ over $1,000 per day (readwrite.com)
- ^ Uber s own advertising (www.quora.com)
- ^ onerous regulations (blogs.reuters.com)
- ^ Jim Surowiecki (www.slate.com)
- ^ the enemy (www.bizjournals.com)
- ^ arguments against Uber (www.slate.com)
As reported by Overdrive in October, fleets rank the oft-dubbed driver shortage directly after hours of service1 regulations and the Federal Motor Carrier Safety Administration s Compliance, Safety, Accountability program as issues they say are the most concerning for them and, partly, the industry.
What do they see as the main obstacle in finding and hiring drivers?
According to some fleet representatives and other panel members at a session held on the subject at Overdrive sister site CCJ s Fall Symposium2 last week in Scottsdale, Ariz., driver image could be the biggest issue in attracting new drivers to the field.
The panel kicked around driver deficit numbers3, too, saying the industry on the whole would need to hire 239,000 drivers each year for the next 10 years to keep up with freight demand and to replace the more than 1/3 of drivers (37 percent) on the road today that will retire in the next decade.
The panel members agreed the public image of drivers is the biggest obstacle fleets face in pulling new drivers into the field.
However, Prime Inc. s John Hancock, director of training and recruiting for the fleet, did say his fleet focuses on maximizing driver and owner-operator income to help the fleet s drivers view trucking as a good career choice. People want a good job, he said, adding good income and opportunity for growth goes along way in fulfilling those needs for many people.
- ^ fleets rank the oft-dubbed driver shortage directly after hours of service (www.overdriveonline.com)
- ^ CCJ s Fall Symposium (ccjsymposium.com)
- ^ kicked around driver deficit numbers (www.ccjdigital.com)
- ^ Click here to see the full coverage of the panel discussion (www.ccjdigital.com)
06 Dec 2013 | After spending the better part of the year on tour around the country, the time has finally come to announce the winner of the DAF XF 105, an absolutely monumental prize that is valued at over $250,000…
Palletways, Europe s largest and fastest growing palletised freight network, has announced that it will be the first pallet network to achieve a high-profile Transport for London accreditation, which rubber stamps best practice in the industry. The Fleet Operator Recognition Scheme (FORS) is a voluntary…
Palletways, Europe s largest and fastest growing palletised freight network, has announced that it will be the first pallet network to achieve a high-profile Transport for London accreditation, which rubber stamps best practice in the industry.
The Fleet Operator Recognition Scheme (FORS) is a voluntary certification scheme aimed at ensuring that fleet operators in London and throughout the UK, work to high standards that go beyond the minimum legal requirements, in areas such as health & safety and environmental impact.
Following rigorous assessment, Palletways met the accreditation s bronze level requirements across all its owned operation sites.
As part of its membership of FORS, Palletways now has access to a range of materials that will offer the network a competitive advantage, including information to further enhance its health & safety provisions and up-to-date technology & guidance to reduce the impact of freight transport on the UK environment.
The FORS accreditation was developed in conjunction with a number of stakeholders including the Chartered Institute of Logistics and Transport (UK), Department for Transport, Freight Transport Association, Health and Safety Executive, The Metropolitan Police, Road Haulage Association, Skills for Logistics and Vehicle Operator & Services Agency.
Peter Lascelles, Director of Owned Member Depots, commented: We are delighted to receive the FORS recognition. The accreditation sets us apart us apart from our competitors and confirms that we deliver an efficient, cost saving and forward thinking service.
He added: We will be making full use of the accreditation and access to materials to further enhance our CSR activities and will promote best practise ideas across our wider European network.
The Palletways Group is made up of over 300 depots and 13 hub operations, through which it provides collection and distribution services across 12 European countries, including the UK.
The company s distribution networks are made up of independent transport companies who share each other s resources to deliver small consignments of palletised freight to market faster and more cost effectively than ever before.
A few weeks ago, an ad by Volvo Trucks took the Internet by storm1. It featured action star Jean Claude Van Damme performing an Epic Split between two Volvo FM trucks in reverse. And now, unsurprisingly, it has been parodied.
But parodies of viral videos don t usually come from the owners of trucking companies. Especially owners of trucking companies that also happen to be running for state Congressional seats. But that s exactly what Mike Collins does in the video below.
Collins is a Republican candidate for the 10th Congressional district in Georgia and the owner of Collins Trucking. In his version, the trucks are Peterbilt, not Volvo, and they re not running in reverse, but big kudos to Mike for doing his own stunts.
As to why Collins performed his own Epic Split, the video explains (jokingly, we d have to assume) it is to demonstrate the dangers of Obamacare. Watch below.
BEIJING (AP) China’s November exports accelerated but import growth slumped in a sign the recovery of the world’s second-largest economy might be slowing.
Exports surged 12.7 percent over a year earlier to $202.2 billion, up from October’s 5.6 percent expansion, trade data showed Sunday.
Imports rose 5.3 percent to $168.4 billion, but that growth was down from the previous month’s 7.6 percent.
China’s economic growth rebounded in the three months ending in September to 7.8 percent after plunging to a two-decade low the previous quarter. But forecasters have warned that was likely to be temporary and growth would fall back late this year or early in 2014.
The rebound was driven by a government mini-stimulus based on higher spending on building railways and other public works.
Chinese leaders are trying to guide the economy to slower, more sustainable growth based on domestic consumption instead of exports and investment. An unexpectedly sharp decline raised the risk of politically volatile job losses and prompted them to reverse course temporarily to prop up growth.
The relative strength in November exports should help to reassure communist leaders who faced the prospect of job losses in trade-dependent industries due to weak global demand.
Slower Chinese growth and weaker demand would have global repercussions for suppliers of raw materials, technology and consumer goods.
The import slowdown caused China’s global trade surplus to widen by 73 percent to $33.8 billion over a year earlier, one of its widest trade gaps this year.
China’s trade surplus with the 27-nation European Union was $10.2 billion, while that with the United States was $22.4 billion.
General Administration of Customs of China (in Chinese): www.customs.gov.cn
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At MCI, we seek first to understand, then to be understood. We take pride and dedication in personalizing our services through highly collaborative approaches to cater to your needs. We believe in building relationships with our candidates and clients, keeping their interest at heart. It is imperative that we assist our candidates to make the right career moves to develop their potentials, and providing our clients with the right talents who will bring their business to the next level.
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Exchanging Places was back on the road again yesterday in London working with lorry drivers and cyclists helping to tackle the problem of cycle accidents in the capital by raising safety awareness for all road users. The Freight Transport Association (FTA) has expressed its support of the Metropolitan Police (Met)…
Exchanging Places was back on the road again yesterday in London working with lorry drivers and cyclists helping to tackle the problem of cycle accidents in the capital by raising safety awareness for all road users.
The Freight Transport Association (FTA) has expressed its support of the Metropolitan Police (Met) initiative, which helps provide HGV drivers and cyclists with an understanding of each others perspective. Through this they aim to ensure both road users recognise the risks and position themselves appropriately when on the roads.
The FTA s Head of Urban Logistics Policy Christopher Snelling commented: Raising awareness and, through that, promoting better and more defensive behaviour all round will be the best way to improve safety on our roads for all. More is needed, for drivers as well as cyclists; The Exchanging Places programme is a good example of what can be done when we work together to share the road safely.
The most recent Exchanging Places event was held yesterday outside Charing Cross Station, at which leading global insurer RSA partnered the Met and the programme, to produce a short video, supported by Transport for London. Published to YouTube the film is available to be viewed at: (www.youtube.com/watch?v=UN7mJR64tvs); the video follows a cyclist and an HGV driver who experience what it is like to be on the road from the other s perspective.
Peter Collins, RSA head of Corporate Responsibility said: As a major insurer, we want to play a role in making roads safer for all users. With the production of this film, we hope it will provide cyclists and drivers with a new perspective, avoid accidents and ultimately save lives.
The Metropolitan Police Cycle Task Force was responsible for setting-up Exchanging Places events in order to raise awareness of cycle safety. People are invited to sit in the driver s seat of the lorry cab in order to help them better understand of what an HGV driver can and can t see, especially in regards to cyclists on the nearside and directly in front of the vehicle..
Snelling added: Freight operators realise how important raising safety awareness is for all road users and these type of events play a big part in this. They are made possible by logistics companies providing vehicles and drivers free of charge at substantial cost to themselves. This commitment illustrates how the logistics industry is working towards trying to improve safety on our roads. FTA commends all companies who have provided such support and ask all our members to support these events where ever possible.
- ^ Posts by admin (www.haulagetoday.com)
- ^ Comment on Back on the road with Exchanging Places (www.haulagetoday.com)
Letter: Trucking company helps veterans succeed
First Published Dec 07 2013 01:01 am Last Updated Dec 07 2013 01:01 am
I was a fighter pilot during the Korean and Vietnam wars. Tom s coverage of C.R. England s support for our veterans makes me proud of our U.S.A.
Salt Lake City
- ^ C.R England (www.sltrib.com)
- ^ Copyright 2013 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. (www.sltrib.com)
National Truck Funding, LLC has named the winners of the 2013 American Safe Truck Driver Award. The American Safe Truck Driver Award is presented to three qualified truckers who met the eligibility requirements during the 12 month period ending Nov. 2, 2013.
The First Place Prize of $1,000 was awarded to Raymond Olexa of Gonzales, La. Olexa is an owner/operator leased to Trimac Transportation Central Inc. and has been a customer of National Truck Funding since October 2012.
The Second Place Prize of $250 went to Jared Lobdell of Amarillo, Texas. Lobdell has his own authority and operates as J&J Kids Livestock Hauling and Dispatch and has been a customer of National Truck Funding since April 2010.
The Third Place Prize of $100 was awarded to Henry Busse of Petersburg, Ohio. Busse is an owner/operator leased to Page Transportation, and has been a customer of National Truck Funding since September 2012.
The winners can claim their prize at the National Truck Funding headquarters located in Gulfport, Miss. National Truck Funding will provide the winning customers a tour of the facility, hotel accommodation expenses, dinner and an oil change. Also, their picture will be featured on the National Truck Funding website.
The 2014 qualification period began on Nov. 3, 2013 and ends Nov. 2, 2014.