Taxi Links of Interest

James Fallows writes a post defending taxi company Uber against proposed vicious fare requirements:

"Here's the headline version of what comes below: As a longtime resident of DC, I am accustomed to misadventures in governance in our "taxation without representation" existence here. But a fight over a new competitor to the District's (often horrible) taxi service offers something I haven't seen in a while. Not routine retail-level corruption, nor skillful top-level favor trading, but instead what appears to be a blatant attempt to legislate favors for one set of interests by hamstringing another. I know, I know, this happens all the time -- but the seeming crudity of this one gets my attention."

Sommer Mathis at The Atlantic Cities wonders if the taxi model is dying.

 [DK: I think there are major challenges to the taxi model and broadly speaking there may be something to her thesis. However, it is an open question if entrenched taxi and transit interests will squash new competition into for-hire vehicle services. History suggests that the old, flawed regulatory model will be hard to break. Let's hope, but we'll see. The optimal amount of regulation is less than we have now but more than none.]

New York City taxi fares are set to increase by 17 percent. Here is a NY Times story about this. Also in the Times, Michael Powell writes about the  plight of the taxi driver.

New York Magazine just published the Everything Guide to Taxis. There is lots of great stuff there.

Taxes are Not Benefits, and an EIA is Not a BCA

California is intent on moving forward with building a high speed train. There are lots of supporters of the project, and lots of attempts to make the project economically justified. For instance, here is a new economic impact report from the Bay Area Council Economic Institute that has high speed rail supporters excited. Here is what America 2050, an enthusiastically pro-high speed rail group, reported on the Bay Area report:

The Council's study identified a potential economic benefit of up to $2.5 billion for the region over time from construction-related jobs and investment, improved real estate values near stations and the right-of-way, and employee time savings. The additional benefits of the fewer polluting diesel locomotives and shorter travel times are in addition to this economic boon.

The headline of the America 2050 piece claims that the two reports cited in their story show the benefits of the project outweigh the costs. Neither report did any such thing. The BACEI report is an economic impact analysis (EIA), which is substantially different than a benefit cost analysis. See here for details. An EIA only looks at how a project will affect a given location's economy. There are no mentions of costs, and because many of the economic effects are transfers rather than new activities EIA should be used with caution.

For instance, according to Table 14 of the BACEI the report (page 27), the $2.5 billion in benefits is the high estimate. The low estimate of benefits is just under $1.5 billion.The BACEI counts state, local and property taxes as benefits, which in this EIA they are because it is new money to the state. But to evaluate the project's benefits against costs you recognize that taxes are not benefits (and certainly taxes should not be called an economic boon). They are transfers. The state gets revenue from taxes, but the people who pay the taxes don't have that money anymore. The costs and benefits balance each other out.

If this report was a BCA, then many of the benefits claimed get wiped out. The report highlights increased property values as a benefit and travel time savings as a benefit. You don't get to count both of these. The reason the property values increased, according to the study, is because of travel time savings. So either travel time savings are capitalized into property values, in which case you do not include travel time savings in your cost benefit analysis, or they are not, and then you estimate travel time savings as a benefit and leave property values out of it.

In any event, the BACEI economic impact report is fine for what it is, but it isn't a benefit-cost analysis. The EIA makes no claims as to whether or not the project makes sense economically, and this should be made clear when this, and similar, reports are highlighted.

Now Published: Credible Commitment and Congestion Pricing

Mike Manville and I are pleased that our paper "Credible Commitment and Congestion Pricing" is now published in Transportation. Available online at this link (gated). Here is the abstract:

Abstract
Transportation analysts frequently assert that congestion pricing’s political obstacles can be overcome through astute use of the toll revenue pricing generates. Such “revenue recycling,” however, implies that the collectors of the toll revenue will not be its final recipients, meaning that any revenue recipient must believe that the revenue collector will honor promises to deliver the money. This raises the potential for credible commitment problems. Promises to spend revenue can solve one political problem, because revenue is an easy benefit to understand, but create another one, because revenue is easy to divert. Revenue recycling may therefore not be a promising way to build political support for congestion pricing. We highlight the role commitment problems have played efforts to implement congestion pricing, using examples from around the world and then focusing on California. Because congestion reduction is a more certain benefit than any particular use of the toll revenue, demonstration projects, rather than revenue promises, will be key to pricing’s political success.

 

Taxi Links

In New York City a federal appeals court ruled that the Taxi and Limousine Commission is not in violation of the Americans with Disabilities Act even though only 231 of over 13,000 medallions are required to be wheelchair accessible. Here is a DNAinfo.com story about last week's ruling. Here is a story about the legal options disability rights advocates are considering. One potential benefit of more taxis being fully accessible is that taxis can then be used to offer rides now served by contracted paratransit. Access-A-Ride services cost way too much (about $60 per ride) and need to be fixed. Chicago has been expanding their accessible taxi fleet through a Taxi Access Program. See details here and this story that notes the number of accessible taxis in the city increased from 92 to 139 due to Mayor Emanuel's work.

Also in Chicago, the taxi drivers had a brief strike yesterday over lease rates and fares. And a new law allows drivers to charge passengers who vomit in the cab $50.

This story from the New York Post about the Master Cabbie Taxi Academy notes that New Yorkers don't really know their way around the city.  Part of the gap in knowledge may be related to the cognitive maps that people develop are related to their modes of travel.

In Sydney, Australia Allan Fels' work has prompted interest in improving taxi services. Here is an op-ed about some poor service issues.

Uber, the unlicensed for-hire taxi service, is opening up a lower cost service. See here and here. I'm not certain if Uber will break the existing regulatory structure for taxi licenses or ultimately succumb to it.

Orange County Toll Roads Cuts Jobs and Costs Because "Ridership" is Below Expectations

The LA Times reports on the Orange County toll road's budget problems. From the story:

Operators of Orange County’s toll-road network are planning to eliminate cash payments and toll-booth jobs as they try to squeeze more out of their financially strapped pay-to-drive highways.
Drivers who use the route 73, 261, 241 and 133 toll roads will need to have payment accounts linked to their transponders or their license plates in order to use the corridors. Cash payments will be phased out over the next 16 months.
The FasTrak transponders or the license-plate accounts electronically deduct money from a driver’s credit line.
In addition, a rate hike takes effect Sunday. Cash tolls will increase between 25 and 50 cents at most toll plazas and  FasTrak tolls will increase between 5% and 10%. Rates vary, depending on the time of day.
The changes, which will eliminate about 100 toll booth jobs, come about a year after the 73 toll-road project restructured its roughly $2.1 billion in debt. An agreement with bondholders requires the agency to hike tolls whenever feasible.
As ridership continues to fall below projections, leaders are looking for long-term, money-saving measures.

It isn't only transit that overestimates ridership! (Though roads tend to underestimate.)

I understand that toll roads are not doing that well as a private enterprise model in many areas. It isn't clear that this road isn't profitable, though. It is just below projections. The Toll Roads (the operators, you can like them on Facebook) regularly offer deals, giveaways and coupons to businesses as incentives to use their road. It is a bit of an odd model in that I am not used to getting a chance to win dinner simply by driving (and paying for) a particular route. I'm not sure if their marketing is successful, but perhaps there are some lessons about how transport can improve usage and service.

Some Thoughts on City v. Suburban Growth

Source: WSJ (Linked below)
Lots of media outlets are picking up the story first reported in the Wall Street Journal that cities are growing faster than suburbs. See here, here, and here for samples. A few things about these data that suggest we should interpret the results with caution. First, these are growth rates, not absolute numbers. Because central cities make up a minority share of regional population most population growth--by a lot--is happening in the suburbs. Consider Atlanta, the second fastest growing city compared with its suburbs according to the chart at top. Atlanta has 432,427 people as of July 2011 and grew at 2.4%. The suburbs have 4,926,778 in July 2011 and grew at 1.3%. Here is the data source. This means that the metro growth was 73,361 for the year, 10,135 settled in Atlanta and 63,226 settled in the suburbs. In percentage terms, 14% of the growth happened in the central city and 86% happened in the suburbs. That doesn't suggest a sea change in attitude.

For most of the metros, the difference between city growth and suburban growth is so small I'm not sure that the difference is statistically meaningful (see the table at the data source above). 2011 are estimated data, and there is an error term associated. Perhaps all of the differences in growth rates are significant, but they have not been tested yet.

There are also large variations by region of the country and metropolitan area, and there does not seem to be any obvious and coherent trend. The headline claim is that more than half of metro areas saw one year growth rates in central cities higher than for suburbs. That means about half saw central city growth lower than suburban growth. In addition, many of the faster growing central cities are growing at essentially the same rate as their suburbs for the one year period in question.

There very well may be a shift in preferences and behaviors happening, and I suspect there is because preferences and behaviors are always changing. I just don't see that the stories highlighted here provide strong evidence that a large shift happened in 2010-11.

Lastly, let's look at how some central cities that have received nice press about robust growth fared. Here is my post from May 4 titled "Can We Exaggerate the Significance of Cleveland's Downtown Population Gains?" and, yes, we can exaggerate the importance of a few people moving to downtown Cleveland. Cleveland shrunk by a rate (-.6%)greater than the rate its suburbs shrunk (-.3%). Cincinnati has also been celebrated recently (see here and here and here for a few examples). That's going so well that the city is declining while the suburbs are growing (see above graphic). I'm happy that many cities are doing well and growing. I hope the trend (if there is one) continues and expands. I'm just not sure there is any evidence of a broad trend yet.


***This post was updated to correct typos in the Atlanta data in the first paragraph.

San Francisco Has 38,000 Residential Units Approved

Many scholars and urbanists argue that San Francisco is not accommodating of new development, and this is problematic for the city's growth. There is some truth to this idea,and perhaps the 3,400 residential units currently under construction are not enough. However, according to the data in this San Francisco Business Times there are over 38,000 residential units approved in the city. A large share of these units are part of the Bayview Hunters Point redevelopment.  Whatever the restrictions are caused by zoning, the data at the link suggest that the city is set to increase the total number of units in the city by about 40,000, which is a lot. Let's see if rents come down and the local economy grows as predicted.