Boy, is the New York Uber war hot. White phosphorous hot. I walked right into it Thursday night — in Amsterdam.
After dinner with a friend, a bankruptcy expert named Josh Rizack, I pressed the Uber app on my phone. A torrent of hell ensued.
I had forgotten that he’s leading a bellwether restructuring case in federal court for a high-profile New York City yellow cab company.
In this war, I generally find myself on the Uber side. As much as I’d like to make it a free-market philosophical thing, what I really like about Uber is that it works. You press a button and a car arrives. What a concept.
But even before I was harangued by my friend, and I mean harangued, it was pretty clear to me that the yellow medallion owners have been badly cheated.
When they bought their medallions, there was an inherent promise of a monopoly by the City of New York, and they no longer have one. There are now more Uber cars on the roads than yellows. That dropped the price of a medallion from as much as $1.3 million to around $625,000.
But what to do about it?
Nothing isn’t an honorable option. But forcing Uber to act and be regulated more like yellow cabs, as my friend demands, isn’t realistic either. Technology discovered a better way for cabs to operate. There’s no going back.
What the city could do, though, is compensate medallion owners for their losses. It was the broken promise of a controlled taxi market, after all, that drove medallion prices into seven figures.
But the overall losses are into the billions. And the city can’t exactly cut a check. But what about a multi-year tax break until a fair value of the loss is recouped? After that, prospective medallion buyers would at least have an honest assessment of the market they are entering, unlike their recent predecessors.
There has to be some creative way to make this right.
Oh, back in Holland, I happily took that Uber car. But my friend didn’t. In a parting shot, he stormed into the cold in search “of a real cab.”
William F. B. O’Reilly is a Republican consultant.