Why limit the number of operators? Is this an effort to create a medallion system or similar?
No. It's because this is a pilot program. At the end of the program, if the program is successful and a decision is made to allow this on a more permanent basis, then presumably the restrictions will be lifted.
For context, the bike share pilot programs (e.g. the Ford GoBikes and the JUMP bikes) also have similar restrictions.
Same answer goes for why limiting the number of scooters.
They may regulate it appropriately in the end, but it sets a bad framework as precedent.
Regardless, the deadweight loss from this decision is substantial. Imagine that the equilibrium number of scooters (the # the market will support, note that we are in the 'rapid adoption phase' right now) is 5000, instead of 2500. At 10 rides per day, times $3 per ride, times the duration of both levels of the quota, that's about $40M in lost economic value. You may fairly argue about those assumptions, but if the city were to propose a special $40M (or $5M or $10M) tax to pay for a study on the scooters, we would rightly be outraged. But they both have the same impact -- people in the city are $40M worse off with what, exactly, being gained in return?
Also note specifically that a big issue with the taxi medallion system was that the quotas prevented the discovery of the equilibrium # of taxis. If we do not allow a market equilibrium to be reached, it's very easy for regulators to endlessly argue over the 'right' number without ever getting close to what the market actually wants. Politics has a lot of inertia -- the medallion system perpetuated itself for generations -- so I do not think you can understate the importance of bad precedent.
Not really, this is how pilot programs generally always work. You limit the scope of the program for two reasons:
1. It keeps the program manageable, and it keeps the data more consistent. If the number of operators or scooters are constantly changing it makes it hard to actually draw any conclusions from the program.
2. The pilot program is being run because the SFMTA hasn't yet made the decision to allow this going forward (or they haven't finalized the rules governing it). Not having any restrictions on the program is basically the same thing as simply approving it, but the pilot program exists to determine if it should be approved and what rules it should be governed by.
Regardless, the deadweight loss from this decision is substantial.
The theoretical loss under certain assumptions, true. What if it turns out that the usage of scooters actually produces a net economic drain in the city?
The pilot program limits the potential benefit, but it also limits the potential downside too.
Also note specifically that a big issue with the taxi medallion system was that the quotas prevented the discovery of the equilibrium # of taxis. If we do not allow a market equilibrium to be reached, it's very easy for regulators to endlessly argue over the 'right' number without ever getting close to what the market actually wants. Politics has a lot of inertia -- the medallion system perpetuated itself for generations -- so I do not think you can understate the importance of bad precedent.
It sounds to me like you don't understand what a pilot program is. The pilot program only lasts a year, so these restrictions are only in place for a year. After the pilot program ends, the SFMTA will determine the new rules to use (assuming they decide to allow the scooters to continue operating at all) and the rules that governed the pilot program won't apply anymore.
Presumably the SFMTA will continue to require companies operating in this space to obtain a permit, but they'll also likely drop the "only 5 companies can participate" rule because that rule exists to limit the scope of the pilot program and keep it manageable. As for restrictions on the total number of scooters allowed, I guess that depends on the outcome of the pilot program. However, if the outcome is "2,500 scooters is better, or at least not worse, than 1,250 scooters" then the SFMTA is unlikely to put a cap on the scooters (since, as you said, they won't know what the optimal number is at that point).
Comments
No. It's because this is a pilot program. At the end of the program, if the program is successful and a decision is made to allow this on a more permanent basis, then presumably the restrictions will be lifted.
For context, the bike share pilot programs (e.g. the Ford GoBikes and the JUMP bikes) also have similar restrictions.
Same answer goes for why limiting the number of scooters.
They may regulate it appropriately in the end, but it sets a bad framework as precedent.
Regardless, the deadweight loss from this decision is substantial. Imagine that the equilibrium number of scooters (the # the market will support, note that we are in the 'rapid adoption phase' right now) is 5000, instead of 2500. At 10 rides per day, times $3 per ride, times the duration of both levels of the quota, that's about $40M in lost economic value. You may fairly argue about those assumptions, but if the city were to propose a special $40M (or $5M or $10M) tax to pay for a study on the scooters, we would rightly be outraged. But they both have the same impact -- people in the city are $40M worse off with what, exactly, being gained in return?
Also note specifically that a big issue with the taxi medallion system was that the quotas prevented the discovery of the equilibrium # of taxis. If we do not allow a market equilibrium to be reached, it's very easy for regulators to endlessly argue over the 'right' number without ever getting close to what the market actually wants. Politics has a lot of inertia -- the medallion system perpetuated itself for generations -- so I do not think you can understate the importance of bad precedent.
Not really, this is how pilot programs generally always work. You limit the scope of the program for two reasons:
1. It keeps the program manageable, and it keeps the data more consistent. If the number of operators or scooters are constantly changing it makes it hard to actually draw any conclusions from the program.
2. The pilot program is being run because the SFMTA hasn't yet made the decision to allow this going forward (or they haven't finalized the rules governing it). Not having any restrictions on the program is basically the same thing as simply approving it, but the pilot program exists to determine if it should be approved and what rules it should be governed by.
The theoretical loss under certain assumptions, true. What if it turns out that the usage of scooters actually produces a net economic drain in the city?
The pilot program limits the potential benefit, but it also limits the potential downside too.
It sounds to me like you don't understand what a pilot program is. The pilot program only lasts a year, so these restrictions are only in place for a year. After the pilot program ends, the SFMTA will determine the new rules to use (assuming they decide to allow the scooters to continue operating at all) and the rules that governed the pilot program won't apply anymore.
Presumably the SFMTA will continue to require companies operating in this space to obtain a permit, but they'll also likely drop the "only 5 companies can participate" rule because that rule exists to limit the scope of the pilot program and keep it manageable. As for restrictions on the total number of scooters allowed, I guess that depends on the outcome of the pilot program. However, if the outcome is "2,500 scooters is better, or at least not worse, than 1,250 scooters" then the SFMTA is unlikely to put a cap on the scooters (since, as you said, they won't know what the optimal number is at that point).