Cap, Trade, and Taxis
(cc photo by kennymatic)
Sarah Van Schagan at Grist asks for advice on “How should you talk to your cab driver about cap-and-trade?” Well, I’m not sure what the right answer is. But if you want to be very literal about it, ecological sustainability and the interests of cab drivers go hand in hand.
The main point has to do with car ownership. One good reason to take a cab somewhere is that you don’t own a car. Conversely, one good reason to drive somewhere is that having already bought a car you’ve incurred the bulk of the costs involved in driving anyway. So if you nudge people toward less car ownership, you’ll end up with fewer total vehicle miles traveled but more cab riding. It’s win-win. More generally, insofar as people live in denser patterns of settlements (which cap and trade certainly encourages) that’s more business for cab drivers.
At the same time, it’s crucial to say that cab regulators need to make sure to give cabbies a fair shake. In principle higher fuel costs shouldn’t actually be a problem for cab drivers. The competing mode of private vehicles face the same costs after all, and structurally higher fuel costs encourage people to divest themselves of their cars which increases demand for cabs. What’s more, cab drivers are better-positioned than owners of private cars to take advantage of fuel efficiency innovations. The problem, however, is that in most jurisdictions cab drivers are constrained from raising prices without approval from regulators. That means that higher input costs can drive your profit margin to zero with no ability for the drivers to do anything about it. If a tough cap-and-trade bill passes, or even just if oil continues on its current trajectory, cab fares will have to get higher.
37 Responses to “Cap, Trade, and Taxis”
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July 16th, 2009 at 2:00 pm
Turning taxis
from across the sea.
[/creepy child voice]
July 16th, 2009 at 2:03 pm
Aren’t taxi medallions allocated through a cap-and-trade system?
July 16th, 2009 at 2:11 pm
What makes you think most people can afford to give up their car, regardless of how much it costs to fill up the tank? Until efficient, cheap and desirable public transit penetrates every suburb, people will need to own cars.
July 16th, 2009 at 2:20 pm
anonymous @ #3
(1) Why not adopt a handle? It makes dialogue much easier.
(2) You’re not wrong, but on the other hand we’re reaping the pain of two generations spent building enormous swathes of low-density suburbs that aren’t (and often can’t easily be) served by good mass-transit, generations in which those low-density suburbs were massively subsidized by cheap gasoline, cheap utilities, and cheap roads, and made more attractive by poor provision of social services and sometimes even basic civil order in the urban cores.
Better, more farsighted policy would have avoided or at least reduced the problem you name, and while we didn’t do that and will therefore suffer a more painful transition there is no time like the present to start changing the incentives.
As gas prices make commuting from the suburbs less affordable, we will see more and better housing near to existing mass transit, we will see more and better mass transit reaching some of the suburbs — and we will see falling property values in the suburbs, which will for some renters (and movers) in the suburbs help to counteract some of the increased commuting expenses, even while the falling land values deepen the pain of property owners trapped in the suburbs.
July 16th, 2009 at 2:22 pm
@#3: Only people who live in suburbs. If car ownership is seen as an extra cost of living in a suburb, *and* car ownership becomes even more expensive than it is now, then more people might choose to *not* live in sprawling suburbs.
July 16th, 2009 at 2:29 pm
Mandate -from up on high- that America’s combustion engine taxi fleet be phased out over time and replaced by Barrack Obama’s shiny new electric car, the Chevy Volt. Now that is a WIN-WIN.
July 16th, 2009 at 2:43 pm
#3, how do you think the incentives for better, cheaper, faster public transportation are created?
On a side note, why does the government have any control over Taxi fares? I thought we learned price controls fail miserably 50 years ago.
July 16th, 2009 at 2:45 pm
Barrack Obama’s shiny new electric car, the Chevy Volt.
The creator of which he fired from GM for driving the company in the ground. Must be nice to selectively take credit for things without mentioning the problems they created.
July 16th, 2009 at 2:50 pm
if cab fares get too expensive, due to fuel cost, people will simply decide to take fewer cab rides and limit their activities to within walking distance.
July 16th, 2009 at 2:55 pm
if cab fares get too expensive, due to fuel cost, people will simply decide to take fewer cab rides and limit their activities to within walking distance.
Or biking distance. Or they’ll take public transport.
July 16th, 2009 at 2:57 pm
At the height of the the gas price spike, I needed to take a long cab ride in Manhattan. I asked the driver how he was coping, and he told me that he thought he was better off. Fewer cars on the street, so less time stuck in traffic. More people taking trains into the city, so more people needing cab rides.
So, yeah, cap and trade should be good for cabbies.
July 16th, 2009 at 3:10 pm
The competing mode of taking the subway, however, does not face the same cost. A shift from cabs to subway rides would be great for society but bad for cab drivers.
July 16th, 2009 at 3:46 pm
“The problem, however, is that in most jurisdictions cab drivers are constrained from raising prices without approval from regulators.”
That can happen without regulators, too. Last time I was in Cambodia, Lonely Planet had the going rate for a motorbike at $7 per day. But the price of gas had gone up substantially since the last printing of the guide and motorbike drivers were getting screwed because no tourist wanted to pay more than what Lonely Planet said they should pay. Without regulation, Lonely Planet became the regulation. And it wasn’t anymore flexible.
July 16th, 2009 at 4:06 pm
I love the people who back electric cars as the answer. I think you believe that power comes from the wall, not from the coal plant down the way.
Say you reduce combustion engines by 50%, and replace them with electric vehicles: Now you need more generation capability. Forget your wind and solar fantasies; they don’t scale in a 24×7 always on way. You’ll actually need more coal, nuclear, or natural gas plants.
But go ahead – advocate electric cars. Pretend power comes from the wall…
July 16th, 2009 at 4:21 pm
There’s a minimum density and taxi penetration needed to make the “less vehicle miles” claim true. If cabs aren’t circulating and simple to hail, it’s going to result in extra miles being traveled.
I live in a suburb of NYC, and took a cab to the downtown train station earlier this week — but the cab had to be dispatched to my house, bring me to the train, then return to the dispatch center. If I used the cab on both ends of my round trip, the number of vehicle miles traveled would have been about 5X the distance between my house and the train. If I had just driven, it would have been 2X instead of 5X.
July 16th, 2009 at 4:22 pm
If a tough cap-and-trade bill passes
That may be the funniest thing I’ve read in months! Thanks! If a tough cap-and-trade bill passes, oh heavens that’s funny!
Get tough now? You’re kidding. We’re going to get tough starting in 2020! Not now! Later!
July 16th, 2009 at 4:24 pm
James Robertson, I am in no way an expert, but my understanding is that the (perhaps utopian) vision is of smart grids and smart meters, such that the cars can be charged preferentially when there’s excess capacity, and especially when there’s excess clean capacity. Not that we’re close to having periods of excess clean capacity or smart grids or meters, but my understanding is that that’s the idea.
Also, I have no idea what the relative carbon efficiencies are of internal-combustion-car versus power-plant+grid+electric-car. Do you know?
Nut in general, I don’t think the issue is gas cars versus electric cars: it’s more cars versus fewer cars.
July 16th, 2009 at 4:29 pm
“But go ahead – advocate electric cars. Pretend power comes from the wall…”
Umm, you seem to be forgetting that controlling emissions is much easier on power plants than it is on cars. Emissions control technology works more efficiently on larger scales and the additional weight doesn’t matter as much when the power plant doesn’t have to drive around. Also consider the fact that power plants operate more efficiently than internal combustion engines because they can operate at higher temperatures (basic thermodynamic principle). Learn some physics, and get back to me.
July 16th, 2009 at 4:32 pm
And what Warren Terra says.
July 16th, 2009 at 5:14 pm
“Not that we’re close to having periods of excess clean capacity or smart grids or meters”
We might be closer than you think. My air conditioning unit has a switch on it that’s controlled by the power company. They can shut off my air conditioner during demand spikes if they want to. They offered me 25 bucks to install the switch. It’s kind of silly, because I only run the air conditioner for an hour a year to see if it still works.
July 16th, 2009 at 5:21 pm
#16 – using a 100V outlet, it can take 12 hours to charge something like a Tesla. It’s faster using a 400V outlet, but virtually no one has one beyond their dryer hookup – and that’s not always in a convenient location to the garage – and that says nothing of all the cars that normally park on the street. Drive through a typical suburb (or city, for that matter) – how are all those street parked cars going to get charged?
The problem with these blue sky proposals is that no one ponders how they’ll work in the real world.
July 16th, 2009 at 5:51 pm
“#16 – using a 100V outlet, it can take 12 hours to charge something like a Tesla. It’s faster using a 400V outlet, but virtually no one has one beyond their dryer hookup”
Dude, do you even have a clue? If you have a 100V outlet, there’s something wrong. Normal outlets run between 110V and 120V. Usually on the low side. Mine is unusual, running at 117.5V. The main feed to your house runs between 220V and 240V. The feed runs on both sides of earth ground and is split so there are two feeds running relative to ground that are 180 degrees out of phase at the 110V-120V range. That’s why there are two sides on your breaker box. Nobody has a 400V feed. And it would be 440V, anyway. Unless you have a three phase feed (commercial only!), which is advertised at 480V, but is probably 465V. Well, I shouldn’t say nobody. China has a weird 480V twelve phase system in some places, but it runs at about 400V. As for your dryer feed, expect that to run around 222V, because they give themselves some margin on hitting the 220V minimum to meet the National Electrical Code.
July 16th, 2009 at 5:57 pm
“That’s why there are two sides on your breaker box.”
Whoops, wrote to fast. The way breaker boxes are wired, every other contact is out of phase. That’s why the 220V breakers are double wide. They have to hit two out of phase contacts to get the 220V. Think about it like this, subtract -110 from 110 and what do you get? 220.
July 16th, 2009 at 6:03 pm
“The problem with these blue sky proposals is that no one ponders how they’ll work in the real world.”
The problem with your analysis, is you don’t know physics, and so you don’t know what the real world is.
July 16th, 2009 at 6:08 pm
Sigh. I get slagged for a typo. I meant 110V.
July 16th, 2009 at 6:17 pm
“Sigh. I get slagged for a typo. I meant 110V.”
Fair enough, but you still need to learn some physics. And maybe some concepts about hourly energy usage. Solar may only work in the day, but that’s when the peak electricity is. As an augmentation to the grid, it’s actually perfect. It works exactly when you want it to work. And you need to understand that coal plants have to slow down at night because nobody’s using the energy. It’s better to have fewer coal plants running at full capacity augmented by solar during the day than it is to have coal plants running off and on to meet the varying demand.
July 16th, 2009 at 6:22 pm
More than a few cab drivers bear a strong affection for certain countries that stand to bear the worst effects of climate change.
July 16th, 2009 at 6:26 pm
And let’s get real, Mr Robertson, you’re idea that your dryer runs eve close to 400V wasn’t just a typo. It’s evidence that you don’t know what you’re talking about. In a perfect world, we’d have 480V three phase feeds to our houses that can be split many ways. But in the real world, Tesla and Edison fought over AC vs DC, and even Tesla was afraid to argue for three phase.
July 16th, 2009 at 6:31 pm
Oh, and in a perfect world, we wouldn’t be using a 60Hz cycle. 40Hz or 80Hz would be better. 60Hz happens to be unusually good at stopping people’s hearts. We can thank the Sumerians and their crazy 60-based numbering system for that. We can thank them for our weird 60-based time system as well.
July 16th, 2009 at 6:44 pm
Comment on the fostert/Robertson thread.
While I am against energy plans that depend on solar energy becoming workable (as in, we are screwed if the technology doesn’t come through fast enough), I actually have no problem whatsoever with using solar if it is workable.
If it turns out that we can get solar to work, I’m all for building lots of solar plants. My only concern is that we will build a system that depends on solar working, on the assumption that we will figure out the kinks, and then we find that it doesn’t work, and instead of rethinking the policy we will simply be told “tough. If solar doesn’t provide enough electricity, well, we’ll just ban you from using air conditioning or driving a car until our energy use is low enough that solar can provide for it.”
July 16th, 2009 at 7:04 pm
“If it turns out that we can get solar to work, I’m all for building lots of solar plants.”
Umm, we’ve already built solar plants that work. Some people get their energy from it. I get my energy from a mixture of natural gas, coal, and wind. It all depends on what the market is doing that day. It’s nothing new. We already have the energy trading markets (one thing Enron did right). We already are working on better grid technology to support the financial markets. Better grids make for better energy trading. We are already doing the changes we need for the financial markets, why can’t we do the changes faster to benefit human beings? I know corporations are people too, but can’t people be corporations too? Why can’t we as people benefit as well as the people who are corporations? We will be better off if the changes that are already being done were done in an organized fashion rather than the ad hoc method we use now. This isn’t like going to the moon in the 1920’s. That would have been completely incomprehensible. This is like going to the moon in the 1980’s. Already been there, it’s expensive, but we can do it.
July 16th, 2009 at 9:39 pm
Umm, we’ve already built solar plants that work.
By “get solar to work” I didn’t mean “make it possible to get electricity from solar,” which we have been able to do for quite some time.
I meant “get solar to be a provide a large portion of our energy needs.”
So what I meant was “If it turns out that we can get large-scale use of solar power to be feasible and economical, I’m all for building lots of solar plants.”
This isn’t like going to the moon in the 1920’s. That would have been completely incomprehensible. This is like going to the moon in the 1980’s. Already been there, it’s expensive, but we can do it.
No, it’s more like getting making it possible for people to take tourist trips to the moon. We have the technology to accomplish such trips, but not efficiently enough or cheaply enough for it to feasible as a large-scale enterprise. The question is how long it will take us to find a way to do this (I say “how long” because think that both are possible in the long-term, the only question is how possible they are in the short to medium term – and obviously lunar tourism is a longer way off).
July 16th, 2009 at 10:10 pm
“I meant “get solar to be a provide a large portion of our energy needs.””
That can be done. All it takes is to make the money flow the right way. It will happen on its own if we stop subsidizing petroleum. Hell, it’ll happen anyway, eventually. It will happen faster if we start subsidizing alternatives at a higher level. One thing it doesn’t really need is a technological advance. Look, we’ve already agreed to heavily subsidize the energy industry. It’s just that we decided that we should subsidize the existing technology at a much higher rate than we subsidize new technologies. Our government’s intent is to prevent new technologies from emerging and competing with the industries that have more lobbyists. The solution here is to define an energy market that relies on competition based on efficiency. Not one based on who has the best lobbyists, which is the current system.
July 16th, 2009 at 10:27 pm
And let’s face it, the oil industry has been around for more than a century. It’s safe to say that it’s an established industry. Why does it need subsidies to survive? And Exxon-Mobil is the most profitable company in the world. How is it possibly so poor that it can’t survive without government largess? In short, the rich are really so scared of the poor that they always need subsidies to compete against them. How about at least a level playing field? Give the new technologies (okay, forty year old technologies) a chance to compete against the 150 year old technologies.
July 17th, 2009 at 10:54 am
Drive through a typical suburb (or city, for that matter) – how are all those street parked cars going to get charged?
Extension cords? Dealers could offer them free when you buy an electric car. (Not that they cost that much anyway compared to the cost of a car or a few hundred gallons of gas.)
Newly constructed condos, apartment buildings, etc. could have an electric-cars-only section of the parking lot with outlets set into the pavement or curb (although billing the electricity to the right person might require some additional technology – maybe sending your personal code and the outlet number to an automated system to activate the outlet? It would be technically trivial to accept email, web or cell phone text message activation). Old ones could retrofit with the same system, if the residents cared enough (or if the owners could get enough profit margin out of providing the charging station). Most free-standing houses have driveways that get close to the house anyway – in the “typical suburb” if there are any cars parked on the street, they are visitors (and no, electric car ranges aren’t so short guests need to recharge to drive back across town).
Of course an electric car could easily be fitted with a car alarm that would go off if someone unplugged it during charging (without entering the owner’s code), which would make it very difficult to steal someone else’s electricity to charge *your* car. Or the cords themselves could be designed differently from the current 3-prong standard and have a plug that physically locked into the socket and couldn’t be removed without the key.
BTW, energy = power x time, not voltage x time. There’s no reason you couldn’t charge quickly at 110V if the circuit and the car could support enough current. There are technical difficulties to large currents, but they might be overcome by technological advances (or you could use several circuits in parallel, charging separate sections of the car’s battery banks – of course you have to stop the user from plugging them all into one outlet multiplier and blowing his house fuses).
A century ago there was no infrastructure to provide gasoline to millions of cars, but here we are with millions of cars being provided with gasoline on a regular basis.
If over the next 20 years there are millions of people who want to buy electricity for their cars, I have confidence in the free market’s ability to find some way to sell it to them. That’s one of the things the free market does really really well (just as dealing with the externalities of carbon emission is one of the things it does really really badly).
July 17th, 2009 at 11:43 am
“How should you talk to your cab driver about cap-and-trade?”
In Amharic.
July 17th, 2009 at 11:46 am
I’m usually against most liberaltards on this blog, but James Robertson blew me away with his blatantly false mis-characterization:
Say you reduce combustion engines by 50%, and replace them with electric vehicles: Now you need more generation capability. Forget your wind and solar fantasies; they don’t scale in a 24×7 always on way. You’ll actually need more coal, nuclear, or natural gas plants.
First; Coal, Nuclear, and Natural Gas are all far more efficient at extracting energy from their starting resource. Natural Gas in particular is approaching 60% efficiency. ICE (internal combustion engine) are around 20-25%.
Second, with the wasted nighttime capacity we currently have we could power more than 50% of the vehicle miles driven in America. That’s a metric shit ton of energy that’s essentially free.
I am wholly against government intrusions and dead weight loss proposals but there is in fact some viability in electric cars in the next 20 years. Don’t expect the government to really do a whole lot in reaching that reality, but I do expect they will take credit. Painting electric cars as completely infeasible opens Liberals up to saying the invented the internet, when, no, actually the markets wanted it and you happened to be around for it’s creation.