Category: City Council

Uber v. Taxis

I decline to choose a winner. The people of New Orleans should be allowed to choose who wins by either using Uber or not  using Uber. Unfortunately, this is not the typical city approach to new companies disrupting the status quo. This is especially true when the threatened party is the deeply connected New Orleans taxi industry.

The Transportation Committee of the New Orleans City Council is set to debate rules changes to some city ordinances on Tuesday, June 24, 2014. Since I will not be able to attend that meeting, my thoughts (non-exhaustive) on the situation continue below.

Assuming that opposition to Uber stems from a concern for public safety, there are some common misconceptions out there that simply aren’t true. These include lack of insurance coverage, unsafe vehicles, random people as drivers, and the affordability of rides. First, Uber now provides significant insurance coverage for all Uber drivers that should certainly be adequate in the event of an accident. Second, the average age of an Uber vehicle is 6 years, and none are older than 10 years. Third, Uber conducts extensive background checks on its drivers before allowing them to hit the streets.

Further, before getting into an Uber car the customer sees a picture of the driver, the driver’s license plate number, and the driver’s name, and then after the ride is over, the customer can rate the experience they had with the driver. This process allows other customers to know who they are getting and the quality of the driver. Uber also is able to keep tabs on its drivers through this system.

Finally, while Uber does have a minimum fare structure to account for insurance and the background checks it runs on drivers (certainly worthwhile fees for a rider to pay for), the customer at least gets an estimate on the cost of the trip before getting into the vehicle. That way, if the cost is too high, they know to seek other options.

Now, comparing Uber with New Orleans’ recent updates to taxi regulations, at least on these four points there aren’t appreciable differences that weigh against Uber. Going beyond these points, Uber is far superior. First, introducing a new player into the market will provide additional transportation options for New Orleans riders. Anyone who’s continually heard a busy tone while trying to call a cab or seen a constant parade of full cabs heading uptown late at night knows that additional drivers are needed. Second, having the ability to rate your driver, and for your driver to rate you, sets up an incentive for drivers to not only be trustworthy and efficient (i.e. not take the long way), but for both driver and rider to just be nice to each other. This is a welcome addition.

Third, Uber technology requires drivers to use GPS. What does this mean? No more having to tell the lost driver that you are PAYING how to get to where you’re going! Fourth, it is far preferable (to me) to be able to pull up a ride on a phone app instead of standing out on a curb waving like a maniac or constantly calling dispatch and waiting for a car to pull up and honk. Further, the app allows you to see the progress of your driver on his way to pick you up.

Fifth, no more cash! Not only do you just hop out of the vehicle at the end of your trip without having to complete a transaction, but the app takes care of tipping for you. This process is preferable for rider and driver for 4 main reasons: 1) not having to give your card to the driver prevents drivers from engaging in swapping out your card with someone elses and then running up charges before the theft is discovered (I dealt with this multiple times in a previous life as a banker at Chase); 2) riders not having cash is also faster and safer (for obvious reasons); 3) no more having to make sure a driver’s credit card machine is working or that they aren’t flouting the city regulations requiring them to accept them; 4) it’s safer for drivers, too, since they don’t have to carry cash on them.

Of course it is true that not everyone has smart phones. This is why Uber will not destroy the taxi industry. There is still room for taxis. Regardless of whether you simply don’t own a smartphone (or haven’t updated your phone’s software to allow you to use it at the moment), or choose not to pay for the service at times of peak-pricing, or just happen to see a cab and hop in instead of pulling out your phone, there are still many customers and situations that will support taxis. Also, there is no reason that existing cab companies can’t adopt similar technology as Uber uses unless they have no incentive to. Unfortunately, due to the current lack of real competition on this front, taxi companies don’t really have an incentive to adopt better technology (not to mention it may not even be affordable at the moment due to the added expenses resulting from recent ordinance changes).

The point is that competition is good. Keeping a competing company out of a market for arbitrary reasons is not good. After reading the above and considering other possible public safety rationales for limiting Uber, I can’t help but think that keeping Uber out must be based on other motivations. Just because taxi companies have been granted a monopoly by the city doesn’t mean they are entitled to enjoy it forever. Plus, as soon as it is honestly acknowledged that what is really going on is simple economic protectionism, at least New Orleanians will know that it isn’t public safety that is being secured. Instead, it is profits of the well connected taxi industry paid for by the public. If the city of New Orleans truly cares about protecting the public and making sure there are safe, dependable, and plentiful rides for people choosing or needing to not drive themselves, then it will amend current regulations to allow for robust competition in the New Orleans taxi market.

Food Trucks, Who’s Your Nanny?

I don’t know about you, but I sure am glad we have LaToya Cantrell making sure food trucks look pretty and Jackie Clarkson looking out for restaurants’ private property rights.

Tuesday, March 12, 2013 saw another round of debate over Councilmember Head’s proposed food truck ordinance changes. I have been critical over a number of the changes, but at least they’re a step in the right direction. However, I’m starting to wonder if the council will even take that first step.

Councilmember Cantrell apparently thinks New Orleanians have difficulty distinguishing between food trucks and carnival-food vendors. How else could she justify suggesting an aesthetic requirement on truck operators? Aside from this being a ridiculous idea, I have a question for Councilmember Cantrell. Who’s aesthetic standard will apply? Yours (which could be awesome or terrible, but that’s irrelevant)? Or will it be some generic, uniform design that will actually make it more difficult to distinguish between the trucks? Newsflash, it is not the role of the government to decide what is aesthetically preferable. Get out of the way and stop playing government Nanny. Aesthetics have absolutely nothing to do with whether the trucks operate in a safe way in preparing food for their customers.

I reserve my most significant outrage for economic protectionist, Councilmember Clarkson. She believes it is her job on the council to protect restaurants from having to compete with those big, bad food trucks who are stealing everybody’s business. Ms. Clarkson does not think food trucks should be able to operate within 100 feet of an existing restaurant. Don’t ask her what a suitable distance is though, she has no idea.

“You’re talking about land owners, private property rights, you’re talking about tax payers on property. I come from that world…I’m trying not to get into measurements with you, and I’m trying not to argue.”

Well Ms. Clarkson, you are wrong in several ways. First, lets talk about those land owners and private property rights. You are allowing restaurant owners to tell other business owners where they may operate on public property (streets). A restaurant’s property rights and land ownership do not extend to the parking spaces on the public street. Also, I fail to see how your argument is in any way logical. Do you complain when a restaurant opens within 100 feet of another restaurant? What about when a bank opens within 100 feet of another bank? A salon 100 feet from another salon? You get the idea. If we were to apply your reasoning to all aspects of commerce we would quickly see New Orleans devoid of commerce. The better idea is that there be no distance requirements. Look at the line of art galleries on Royal St, the bars and restaurants on Magazine and Oak to name just a few examples. When businesses compete with and complement each other it creates thriving neighborhoods and districts. This is what your policy would prevent, Ms Clarkson.

Second, food trucks also pay taxes. They pay sales taxes on all their supplies, they pay fuel taxes on their gasoline, they contribute to payroll taxes, federal and state, for their employees, and they collect sales taxes for the city of New Orleans. The point isn’t that restaurants pay more taxes because of property taxes. That is a choice restaurant owners made when they went into business.

At the core of the issue is that banning food trucks from reasonable operating locations serves only one interest. The interest of a business that has set hours, a set location, seats, air conditioning and heating, etc. This restriction protects the business that already has all the advantages. The public is the group that suffers.

If you keep up your nanny-like behavior Ms. Clarkson, I will be happy to help send you back to the world you so proudly come from next election.

Tax Breaks For All

Since 2008, 62 “cultural districts” have been created in Louisiana. Of those 62, 20 are in Orleans Parish. Currently, a 63rd is being proposed for the Uptown-university area of New Orleans.

According to the Louisiana Culture, Recreation, and Tourism Department, “The primary goal of this initiative is to spark community revitalization based on cultural activity though tax incentives.” To accomplish this goal, they allow artists selling their original artwork within the districts to waive sales taxes. Also, owners of “historical” properties (i.e. 50 years old or more) can receive tax credits for renovation work.

I requested and received the annual reports for all 20 of the New Orleans districts. The data can be found here. For some reason, the Lincoln Beach district did not file a report for 2011 though. If you wish to see other years, simply change the year in the domain name.

If the goal of the New Orleans City Council is to make all of New Orleans one giant cultural district, they are well on their way.

 

The red blocks are the existing districts, with the blue being the newly proposed district.

I began this post with an aim different from where I wound up. Originally, I intended to dig through the annual reports to see if these districts were truly gaining anything from these special tax breaks. Also, I wanted to try and quantify the cost associated to taxpayers for these breaks. During my research though, I discovered that last Monday, July 23, 2012 was the first day of an investigative panel seeking to quantify all the tax breaks given in the entire state of Louisiana. I’ve sent an email to the head of the review committee to specifically request they not overlook the cultural districts. The results of this review are due by February 1, 2013, so I will eagerly await their report and save my time for other projects.

However, as I thought more about the issue, I realized my position had somewhat drifted. Yes, we need “to flush out low-performing and obsolete tax incentives by exploring their economic impact and value to those affected by them,” as House Speaker Chuck Kleckley, R-Lake Charles, a member of the Revenue Study Commission, put it. But, we also need to use the data to better simplify the tax code so all Louisianans benefit.

After all, a tax break or incentive simply allows people or businesses who earn income to keep more of their income. That is not a bad thing. Where it can get out of hand though, is when some parties are benefiting more than others simply due to their lobbying might. I’m excited to see the commission’s results and what kind of drastic, beneficial changes can result for all Louisiana taxpayers over the next year.

 

Council Gets Back to Black vs White Version 2.0

Unfortunately, it appears I was correct in my last post. Possibly overlooked as a result of the more advertised decision to support NIMBYs and hamper Tulane’s new football stadium plans, was this little nugget from Thursday’s (May 3, 2012) New Orleans City Council meeting.

Seriously, what else could Hedge-Morrel and Johnson’s childish reaction signal? Yes, race politics are still alive and well in this city.

I had hoped to use this post to take the rare opportunity to praise Johnson and Hedge-Morrel for opposing the vote yesterday on the Interim Zoning District, but alas, it must be overlooked as a result of their final actions of the day.

Council Gets Back to Black vs White

Don’t worry, I already expect racism accusations in response to this post, but it’s something I feel needs to be put out there before any decision is made by the New Orleans City Council.

There’s been a lot of discussion recently about changing the way we elect Councilmembers At-Large. Currently, all candidates run together on one slate and the top two vote getters receiving over 25% of votes are elected. Apparently, a number of elected officials have a problem with this. Their stated reasoning is that those elected are not chosen by a 50%+ majority, and therefore do not “represent” the majority. Their solution is to have two separate seats on the ballot so winners have a clear majority.

I do not believe their stated reasoning is the truth, unfortunately. Based on the comments centered around the council runoff between Stacy Head and Cynthia Willard-Lewis, I fully believe what’s actually going on is a way to underhandedly assure that one at-large seat is held by a white person and one seat is held by a black person. Of course no one could ever publicly state that that is what’s happening, but why wouldn’t it be? Members of the black New Orleans political class continually insist that race is the reason for every perceived slight.

How else could you interpret comments like Willard-Lewis saying in reference to all portions of the community feeling “they have access and that their voices will be welcome, respected and heard?” Or even more blatant, New Orleans native and former mayor of Atlanta, Andrew Young, stating “If you don’t have somebody representing you in public office, you really don’t get your share.” Translation; white people only represent other white people.

As a white person, I find these comments to be completely offensive. Also, Willard-Lewis and Young are being incredibly irresponsible. Instead of using their positions of influence to try and help remove economic, societal, and governmental barriers they prefer to hold their community back. Real opportunity and achievement is colorblind and until they stop viewing the world through a racial lens they will only fall further out of touch with the New Orleans of 2012 and beyond.