Tuesday, June 26, 2012

It Only Took Forty Years

One chapter in my Machinery of Freedom proposed what I described as "jitney transit," organized ride sharing for pay, as a low cost form of mass transit. The capital and operating costs are already covered, since lots of people are already driving from one place to another with empty seats in their cars. All that is needed is some way to connect riders with drivers. I did, however, note one problem:
The other difficulty is political. Many large cities have regulations of one sort or another to control cabs and cab drivers; these would almost certainly prohibit jitney transit. Changes in such regulations would be opposed by bus drivers, cab drivers, and cab companies. Local politicians might be skeptical of the value of a mass transit system whose construction failed to siphon billions of dollars through their hands.
I just got an email from a friend, pointing to an article on a modern version of the idea currently being implemented via a cell phone app. The entrepreneur responsible describes regulation as the key obstacle. Existing legal restrictions are avoided by making the payment nominally voluntary; the rider makes an offer of payment via the app, chooses how much to actually pay when he arrives. But there remains the risk of future regulation, pushed by incumbents to slow down innovation that competes with them.


Daniel A. Nagy said...

Actually, the low-tech version of this system has been working all over the former Soviet Union since I can remember myself. You go near the curb, stick out your hand (not horizontally, just a little bit), and within a minute someone will stop. You tell them where you want to go and how much you want to pay. You either get accepted, or you get a counter-offer or the guy drives away. The conventional time limit for haggling over the price is 4 seconds (with the exception of Uzbekistan, where haggling seems to be a national pastime).
Some people do it to earn some extra cash on the side, others do it full-time.
Here is an entertaining account from an American journalist about the cut-throat competiton on Moscow's market of personal transport.

The availability of this service is one of my favorite features in that part of the world.

David Friedman said...

It was working in the U.S. early in the 20th century, before it was regulated out of existence at the behest of the trolley companies, which didn't like the competition. I discuss that history in the chapter I mentioned of my book.

astrolabio said...

when I'm in Rome I always think about that chapeter of the book (super expensives and unprofessional cabs, plus a very bad public transportation system, plus lacking of parking lots etc) I have noted also that someone has tried to do a similar thing via public burocracy (with public cars) called "car sharing", it doesn't work very well, very few people use that. for long distances howerver it work pretty well in germany, there aren't legal issues because travelers simply share gas and highways costs, so there is not a profit.

Anonymous said...

there's a driver and a girl or guy in back and you know nothing about either of them. gee, what's the worst that can happen? they seem nice, don't they? no regulation, no nothing, just trust. blind trust and faith. HRMMMMMMM.

it ain't hard to, like, make the unlock button on certain doors do nothing. or to just remove the button. are you going to check for that every single time that you enter a foreign vehicle?

will said...

In response to pokarpokar - state regulation does not prevent what you describe. See for example


Kidnapped and murdered by a state licensed taxi driver in his officially registered vehicle.

Also for your information, here in the UK taxi doors lock the 'customer' within the vehicle until released by the driver after payment has been made. So no need for horror film imaginings - you are already prisoner of the driver - a situation mandated by the regulators themselves.

As usual the compulsory regulation of a product or service prevents alternative options. Few people question the safety of officially sanctioned services. In the absence of mandatory regulation enterprising firm could win a lot of business from lone travellers by offering in-car cctv, vehicle trackers, or sat nav displays in the passenger cabin. Under mandatory regulation and the cartelised industry it engenders there is little to no incentive for such offerings.

Russ Nelson said...

and it is the uncertainty noted by your final sentence which stops me from creating a virtual trolley system where I live.