The government likes giving people benefits via mandates for businesses in order to obfuscate costs. Transparent and accurate pricing for a driver at 2AM results in a better allocation of resources. If the government wants to give people access to drivers at 2AM, then the government should either give people enough cash to pay the price of a driver willing to be available at 2AM, or run the service themselves.
These things have all kinds of social implications.
In the capital of Turkey, Ankara, the islamist mayor cut all the public transport after 00:00, making late evening events(concerts or simply socializing in bars and clubs) inaccessible to younger people from poorer backgrounds because the taxis were expensive and abusive(the taxi lobby was protected by the same government).
This caused divides between the youth and hindered the arts and entertainment scene for many many years.
Some stuff is essential services. Like the airlines, they must be available and accessible even when it’s not profitable. It often needs to be subsidized, the subsidy can come from the central government or the users of the service can share the cost of the unprofitable operations.
When you fail in that, the whole society and economy crumbles.
The government is not some magic money source. Saying the government should pay for something is saying the everyone should share the cost.
By mandating that taxis are available we are saying that the cost of off peek taxis should be paid by people that use taxis. If I never go to a town big enough to have a taxi service, or if I drive my own car everywhere, then I never share the cost for subsidising off peek taxis.
Which is more fair, everyone pays or only taxi uses pay?
I contend that is unfair to levy a societal benefit solely on customers of taxis during the hours at which taxis would be available anyway without government mandates.
I would even go so far as to say if the government is mandating something, then the costs should be distributed amongst that government’s tax base (can be progressively distributed, but across the whole tax base nonetheless).
There are many cases in which we might want the government to mandate something and direct the cost towards a particular group. For example, when a societal cost is caused by the choices of a particular group. Distributing this cost equally or progressively may be a less fair way to do it. And in some cases, distributing this cost to society as a whole may remove an important financial disincentive for bad behavior.
e.g.:
* making polluters responsible for cleanup costs
* making investors responsible for the costs of overseeing the markets they profit from
* making bad drivers responsible for paying for the consequences of their actions
I'd say it's more fair to say that we could distribute costs to society when it's a public service that generally benefits everyone, or the disadvantaged. But I don't think we would want to distribute societal costs incurred by the rich or reckless.
Your first and third examples are punishments for violating the law (or harming society), not societal benefits. Hence not applicable to what we are talking about here, in my opinion.
The second example I see no problem distributing amongst society, if functioning markets are providing a benefit to society.
There are corruption risks with making government functions dependent upon the thing they are policing.
To what degree to you believe that should be the case? There are multiple political interpretations of that sentiment throughout history with widely varying implementations and downstream consequences.
Is it just public transportation? Are airlines and trains public transportation? Is it other critical infrastructure? Utilities? Energy? Healthcare? Communication? Other societal necessities like food/housing/shelter?
It sounds like a line of reasoning that programmers fall into.
"This code is so stupid! Shouldn't it be like blah!?"
And then a more senior person tells you a story and yeah, you couldn't have found a better solution given the circumstances.
Whatever the population feels like should not be subject to market pricing.
Also, whatever is prohibitively expensive to duplicate, such as water/sewage/gas pipes, electrical/fiber wires, etc. Or public transport like underground train systems.
"not subject to market pricing" is quite a spectrum of practices, and depending on how you define it, it could be almost nothing, or almost everything in the US.
Taxes, tariffs, subsidies, affect market pricing quite a bit and are extremely common. Some consumer protection laws place very loose pricing rules on businesses that are literally price controls, but in practice allow pricing to fluctuate with market rates. Some other industries have segments which are price controlled, and other segments that are not, i.e. healthcare, insurance.
I mean that the market price should not be obfuscated. I have no qualms about society choosing to subsidize certain things, but the costs should be explicitly recognized.
For example, give people access to higher education. Okay, have the government operate the higher education institutions. Or give the students cash to pay for the higher education institutions.
But do not obfuscate costs by guaranteeing all student loans with zero underwriting. (The more politically popular method since it keeps taxes low now and lets politicians say they helped people). Of course, this price obfuscation rears its ugly head in 20 to 30 years once tuition is now $50k+ per year.
3/4 of post-secondary students in the US do go to schools operated by the government, that doesn't preclude those institutions from charging tuition.
Do you mean 'obfuscated' or 'inflated'?
I'm not sure how prices are obfuscated in US higher education... prices are published and you sign several pieces of paper with the price on it before you walk into class for the first time. Guaranteed loans don't obfuscate prices (in fact, DoE loans have more paperwork than private loans), they enable schools to inflate prices because it gives more buying power to their students. This isn't something that would be fixed by handing out cash instead, in fact, grants/scholarships are another factor that have enabled schools to inflate costs. If you shift the demand curve up and to the right, the equilibrium price goes up -- it doesn't really matter what shifted it.
The lack of underwriting is what obfuscated the prices (along with non dischargability of loans in bankruptcy).
A prudent lender would not lend a teenager tens of thousands of dollars to study something the society does not want (indicated by high probability of low paying careers as a result of that education).
Grants/scholarships/subsidized tuition might push demand and hence prices higher, but because grants impact taxpayers’ wallets today, there would be a built in check on spending. Not so with lending the money to teenagers.
The government can defect spend, and raise taxes later. That's even more of an obfuscated price than an ill-advised loan. Either mechanism of surprise costs is a bad thing.
The root of the higher-ed problem is social. We're forcing kids to make career decisions before they're ready, and we're forcing them into paths based upon 1970s stereotypes about the workplace. 50% of counselors and secondary-teachers are clueless about the broader workplace, and the other 50% would be politically chastised by parents if they told the truth.
We'd solve 80% of our student loan crisis if it was politically okay to tell kids:
1. If you don't have an interest in higher learning, don't want to go to college, or "just want a job" you shouldn't go to college. Don't go to college because your mother is pressuring you to do it, because she finds it 'unfashionable' or 'embarrassing' if you don't.
2. Just because you can do something doesn't mean someone will pay you to do it. How many job openings are in that career path, how many people are competing for that job, and how do you rank against them?
3. Academic talent is 50% of what employers care about. Nobody is going to care about your GPA if you don't have social, professional, and self-marketing skills.
That's one way to do it, as I said. The other way is to share the burden of the service by all of its users.
In the case of Taxi service, I find to be more appropriate users of the local service sharing the cost of the low hours. Central government paying for local services tends to be very inefficient.
The question is does society benefit from taxis being available all night long? If that is the correct question, and the answer is yes, then society should be paying for it.
By restricting the distribution of costs over only people who use taxis, then people who use taxis are unfairly shouldering a burden that society benefits from as a whole.
People who use taxis also get an unfair benefit by making a disproportionate use of publicly-funded roads which they don't pay for. Very few things are 100% private or 100% public. Most large organisations necessarily exist in a space of negotiation and compromise with the rest of society - you can use this public resource, but you have this public obligation. We'll reduce your taxes by this if you agree to provide that. We'll build this for you if you pay that. And why should the world work any differently?
I definitely sympathise with your main point - there's a tendency to see a problem and go looking for a nearby business to soak rather than funding it through general taxation. But assuming we accept that there should be a fleet of taxis that operate overnight to provide this socially-mandated service (and whether that fleet is directly owned and operated by the government or is something that private operators provide as part of a mutually agreed bundle of rights and obligations is immaterial IMO), for private industry to undercut the profitable segment of that service would be a both direct social loss (money out of the government's account) and a waste of real value (those expensive taxis sitting in the daytime).
Another way to think about it is the taxi companies enjoy slightly/moderately less profits than they could maximally get in exchange for a safer and better society (eg 24/7 taxi coverage). The same can be said for drivers licenses, car insurance, employee benefits, etc.
Instead of the government acting as either entirely public or entirely private, why shouldn’t it act instead as a mediator between the public and the private? This seems to be the most logical decision for me compared to either full socialism or full libertarianism.
> enjoy slightly/moderately less profits than they could maximally get in exchange for a safer and better society
This is an enormous assumption (frequently wrong), and precisely why the costs of a government mandate should not be implicitly laid on a select population.
It actually results in attempts to cheat and incentivize corruption. For example, NYC had or has a problem with cabs not taking people to poorer neighborhoods. The government can mandate it all day long, but they did not stop cab drivers from discriminating. The correct solution in this case, would be to pay the cab drivers the market price for going to the poorer neighborhoods.
The payment obviously would have to come from the government, either given directly to the poorer person or can be given directly to the cab driver. But either way the incentivizes would be properly aligned, increasing supply of cab drivers willing to drive to the poorer neighborhoods.
Where this falls apart is that it requires increase in government spending, meaning increase in taxes for rich people. And obviously, they are going to oppose this wealth transfer. It is much easier and cheaper to simply require cab drivers to go to poorer neighborhoods under threat of fines or whatnot, and sit back and let the status quo continue.
Interesting. I suppose if the mandates cannot or will not be enforced then it presents a problem, although I don’t know how well the incentive system works with say, clean air/water acts, which seem to be both mandated and incentivized.
>Instead of the government acting as either entirely public or entirely private, why shouldn’t it act instead as a mediator between the public and the private? This seems to be the most logical decision for me compared to either full socialism or full libertarianism.
It depends on the context of mediation. In one sense, government-as-mediator is completely compatible with a libertarian nightwatchman state so long as such mediation is impartial and does not infringe on public and private rights of either party.
But I don't think such a distinction helps here, as the functional differences between taxis and Uber amount to little more than legal fiction.
