Lisa Chow did a story for Morning Edition about Uber's "surge pricing". Similar articles have been written recently. They all raise the question about whether it's fair to charge people a fare for a ride that's higher than the originally advertised price.


Now, "surge pricing" is ubiquitous. It costs me more to ride the DC Metro during rush hour than during the middle of the day. It costs me more money to drink a beer at the bar after 7pm than it does during Happy Hour. It costs me more to see a movie in the evening than it does in the morning. If I wanted to go to Las Vegas for New Year's, my hotel room would cost significantly more for the holiday than it would for the week following.

All of these are examples of adjusting prices to put supply and demand in equilibrium. Metro wants me to ride at off-hours to avoid overcrowding on their trains. The bar wants me to get there earlier and fill barstools rather than not go at all. The hotel wants to maximize its profit on a night it knows it's going to be sold out.

What makes all of these examples different from Uber is that the surge is predictable. I know what hours I'll pay more for my Metro ride. I don't show up at the movies not knowing what the price is going to be. And typically I book my hotel at least a few days (if not weeks or months) in advance to lock in my rate.

With Uber, I go out on the town, and when it's time to come home, pull up the app, and the price could be just about anything. It's not based on certain hours and I can't book my ride in advance to lock in a rate. This is where Uber is getting into trouble with customers like the woman in the NPR story who called the pricing model "ridiculous". It's not ridiculous, it's just implemented in a way that makes them look bad.

Gasoline prices are a great example of something that adjusts frequently in price and which consumers don't like paying more for when they've previously paid less. Gasoline prices similarly "surge" after storms and natural disasters, just like Uber prices, and consumers make similar accusations of "gouging" just like they do with Uber!

But even in the fuel market, savvy consumers can "hedge" against price swings by buying options in the financial markets that essentially lock-in a price for a fixed period of time. It makes more sense on a commercial-scale, but individuals can do it if they really wanted to or were really concerned about volatility. Even then, gasoline prices don't double or triple in a matter of minutes.

There's a solution for Uber though. The specifics would need to be ironed out, but generally it would look like this...

Just like I can lock in a hotel rate or airfare by booking in advance, Uber can let me book a one-way or round-trip in advance and lock in a price. They have data and algorithms and they know when demand is likely to peak. I might be willing to book a ride in advance at 1.5x the regular rate if I fear the price might be 2x by the time I need the ride. I don't like surprises, and I suspect many of Uber's customers don't either.

Now, the driver would still need to be paid whatever the "going" surge rate is, in order to keep the correct number of them on the road, and sometimes Uber might lose money on a pre-booked ride, other times they might make money. If their prediction model works correctly, it will all come out even in the end, but from the consumer's point-of-view, the predictability of knowing what the service is going to cost would be reassuring. All of this happens behind the scenes in any case, and the customer would never need to know these specifics.

The economist in me fully understands the reason why they've implemented surge pricing. And even knowing full-well its purpose, I still don't like it as a user. That's exactly why they need another solution and should probably stop doubling down on their position that surge is here to stay.
Aaron Wiener has a post in which he writes about the newly coined term "Ubertarian" and reading through his five points, actually describes me pretty well. But that's not the point of this post. What I really want to dig into is the idea of regulation versus "free market" which seems to be the cornerstone of this ideology.

He describes:
They support government regulation—except when it inconveniences them. Clamping down on the big banks? Yes, please. Tighter safety standards? Love 'em. Restrictions on app-based taxi competitors, or on the number of bars or restaurants in their neighborhood? An outrageous imposition on the free market!
The DC Taxi Commission is a perfect example of regulatory capture, a failure of government where the agency that's supposed to be the regulator becomes a lobbyist for the very group it's supposed to be regulating. The DCTC often seems more concerned with the livelihood of cab drives than they do about protecting the consumers who use taxi services.

(from Wayan Vota on Flickr) 

Let's take a simpler example. Say I hire two rides. The first is a cab I hail on the street and the second is a car I hire through Uber. Let's say I have equally terrible experiences in both cases. The drivers are rude, the cars are filthy, and the drivers try to exploit me by taking a out-of-the-way route to boost up the fare.

In the first instance, I have to manually write down the driver's ID info. I have to fill out a long form and either mail it, fax it, or drop it off in person at DCTC office in Anacostia (online submissions are not available). It's unlikely I'll ever hear back or that the driver will face any consequences for his actions.

In the second instance, I already have the driver's name and licence plate number and a GPS record of the ride; all I have to do is submit a complaint through the app. The process takes about 60 seconds and it's likely that within a day or two I hear back with an apology and possibly a partial or full refund for the bad route and other problems.

As a consumer, it's obvious which of these two scenarios better protects me. It's not that regulation is "inconvenient", it's that it's failed. DCTC is in the business of protecting the interests of drivers, and killing all competition is part of that. It shouldn't be like this, and the solution from the policy perspective is a complete reform of the regulator and how it functions.
Until recently, if someone asked what I thought about professional football, I'd have said that I wasn't interested in watching or participating in it. This season my opinion has changed, subtlety at least. I've gone from not caring much about professional football to really starting to dislike it.

(from Clinton Crumpler on Flickr)

I read about the concussion scandal several years ago when the article first appeared in GQ. Even after Malcolm Gladwell wrote about it about the same time, I filed the story away in my brain and forgot about it for a while. It wasn't until Frontline produced a two-hour documentary on the topic that it really started to become clear just how shady the NFL has been acting throughout all of this.

But let's say I could get past the concussion scandal, or the fact that the "nonprofit" NFL swindles taxpayers out of millions, or the childishness of far too many adult men (players). What I can't get past is the fact that my hometown team is owned by one of the most unlikable businessman in all of sports.

I haven't cared for Dan Snyder since he sued the City Paper a few years ago over hurt feelings. But the way he's handled the name change fiasco has almost been too painful to watch. You know he's fighting a battle that inevitably he's going to lose (how quickly it happens is the real debate), but his resolve in the meantime makes him about the last person I'd ever want to give my hard-earned money to. And so I will never attend an NFL game for his team, or buy merchandise, or give them the TV ratings.

That's not to say I don't like professional sports. Or that other sports don't have issues. I'm a baseball fan, but it was notably less fun being a baseball fan during the steroid scandal than it was before, or after. Professional football seems to be going through a similar point in their history. The question is whether or not they'll try to fix what's gone wrong or just continue to deny that any problem exists.

At the end of the day, I don't feel bad about disliking football. It's not like a local business that's going to fail because they don't have enough sales. There are plenty of fans and the sport makes plenty of money. Perhaps the most incredible statistic is one that was mentioned during the Frontline documentary:  the amount of money spent on a single Sunday Night Football game is roughly equivalent to the entire budget of a Harry Potter movie. When you think about it like that, the amount of money out there in football is mind-blowing. And that's to say nothing about the Super Bowl.

Being a fan of football easy, so I get why it's so popular. Easy in the sense that there are only 16 games in the regular season, that's 146 fewer games than in the MLB regular season; and most of those games will conveniently be played on Sunday afternoons. You'd have to spend the equivalent of over 20 days if you wanted to watch every game of a baseball team in a season. That's 10x more than an NFL team. But it's also brutally expensive if you want to be anything other than an armchair quarterback. NFL tickets can run into the hundreds of dollars for "cheap" seats, and then you have to be willing  to put up with the atmosphere at the games.

So yes, I'm done with professional football. Maybe I'll even take advantage of Super Bowl Sunday to get a reservation at a hot new restaurant.
If there's one street in Washington that's caused much consternation among commuters, it's Pennsylvania Avenue, between the Capitol and the White House. Back in 2010 the city experimented with a new transportation approach: putting the bike lanes in the middle of the street, rather than on the far right, as had been typical. The design is actually quite well-done. The problem is that the quality of the design relies on users following the rules; and far too often that doesn't happen.

This sign at 13th and Pennsylvania sums it all up. On the top, instructions for bicyclists to obey the traffic light; on the bottom, a sign explicitly banning U-turns.


I ride this stretch nearly every day, and almost always see drivers (especially taxi drivers) making U-turns. I also see bicyclists going through red lights. I've never witnessed enforcement for either violation.

The problem with illegal U-turns is that they're dangerous. Drivers have to cut through two bicycle lanes and find an opening in traffic on the other side. The situation got so dire last year that the mayor announced emergency rulemaking explicitly banning U-turns. But he didn't mandate any enforcement, so U-turns regularly occur to this day.

Red-light running is its own problem. I never do it, but plenty of people do. I understand the argument for allowing Idaho stops, but when the signage explicitly says "obey this signal" it would seem that Idaho stops are not justified. The real problem is that red-light running is fuel for the anti-bike crowd's fire. Like it or not, drivers use it to justify their own law-breaking and you can witness this attitude in any debate where a legitimate complaint is lodged against a dangerous driver.

David Alpert has a good overview of three taxi hailing apps that you can now use in DC. I've only used one (Uber) but did recently create an account for MyTaxi. Since I almost never hire rides, I haven't used the latter yet. For the purpose of this post, everything I say about Uber refers only to its taxi service, not its Towncar/SUV service.

In my opinion, the DC taxi industry isn't just bad, it's downright terrible. The economist in me sees the obvious problems: cabbies don't have any incentive to provide good service because people don't really get a choice in which cab they hail, nor can they usually hire the same drivers more than once.

Adding to that, the taxi regulator (DCTC) is extremely weak and cab drivers know they can get away with a lot of abusive behavior (refusing destinations, inefficient routes, discrimination, etc.). And traffic enforcement is weak, so cab drivers also know they can drive like dangerous maniacs and pick up more fares as a result.

(from thisisbossi on Flickr)

David's post is about how these apps change the user experience. I think there's even more to it than that.

Uber, for example, is a new de facto regulator of the taxi drivers that use the service. If I have a bad taxi experience, I can file a complaint with DCTC (and it probably won't go anywhere) and I can file a complaint with Uber (and it's much more likely I'll have the situation resolved or at least get an apology).

If a taxi driver working for Uber provides poor service to enough customers, he could get kicked out. If Uber is generating a decent amount of business for him, this could be incentive enough to provide good service to the passengers who hire him through the app.

The other issue that the technology addresses is anonymity. For a driver that finds passengers via street hails, providing bad service to one customer isn't going to stop another customer from hailing him a few blocks down the street. With Uber, customers get to rate their drivers after each ride, so the driver has the same incentive to earn a good rating on Uber as any business has to earn a good rating on Yelp.

In order for Uber to have enough muscle, they need to generate enough business for cabbies so that the drivers have no choice but to use the service if they want to make any money. If Uber isn't pushing enough business to them, drivers might not care if they get kicked out, because they can always go back to using street hails for business, or sign up with a competing app.

It's too early to tell if any of these apps will make a dent in the DC taxi industry, let alone fix any of the problems. That said, I'm at least optimistic for the time being.

Parking Illegality

Ashley Halsey III has an article about the millions of dollars that were generated in DC last year via parking tickets. Here's the money quote:
Not counting Sundays and holidays, AAA calculated that the District issues an average of about 7.3 parking tickets each minute.
This is incredible, not because of how many tickets are being issued, but because it shows just how rampant illegal parking is. In fact, I'd be willing to bet that for every one person who gets a ticket for illegal parking, dozens more get away with it. 


(from thisisbossi on Flickr) 

A lot of the violations are from people who simply don't pay their meter (which is what it is), but another chunk come from people who park illegally because there isn't a legal space on the street at their destination. So instead of finding a legal space, they double park, park in bike lanes, loading zones, handicap spaces, tow-away zones, or wherever else they can squeeze their car, regardless of whether it's legal. Sometimes they throw on their hazard flashers, as if that makes it OK (though I've never seen that stop a parking enforcement officer from issuing a ticket). 

To some, the problem is too few parking spaces. This is a stretch. DC has plenty of parking spaces, but many of them are in garages. And garages often charge market prices, and people don't want to pay market prices when a much less expensive option is out there. Sometimes garages are a few blocks or more from people's destinations. Often the available legal spaces, even on the street, aren't right next to where people are going.


In this sense, what they really mean is that there aren't enough free or under-priced spaces directly in front of their destinations. What's the solution then? More government subsidized municipal parking lots? Lax enforcement that lets people double and triple park wherever they want without consequence?


Government could build more parking spaces, but the simple fact that those spaces won't all be right in front of where everyone wants to go all the time, illegal parking will continue.

The reason this is such an incredibly difficult issue is because illegal parking is enough of a "victimless crime" that any punishment greater than a monetary fine seems inappropriately harsh. But at the same time, the fines and current enforcement system clearly aren't enough to actually deter people from doing it. The result is that the city rakes in a ton of money, and it's extremely easy for people to cry "extortion" or "scam" when the numbers come out and show that parking enforcement generated $92 million in revenue. 

As Martin Austermuhle writes, nothing that the city will do can ever make everybody happy:
Townsend complains that D.C. charges too much for parking and enforces too aggressively, but at the same time motorists aimlessly circle the block looking for parking. In AAA's ideal world, parking would be (all but) free and enforcement (all but) nonexistent, which would obviously resolve the city's on-street parking woes by...allowing drivers to park all day and without paying a dime?
Of course, there is a world where exactly this exists:  the suburbs. DC has plenty of suburbs in all directions where parking is like heaven (though driving to that parking can be like hell). The great thing about DC is that it's a city and not the suburbs. The other great thing is that people have a choice between whether they want to live in the city and patronize businesses in the city or not. From what I can tell, despite many of the threats and much of the outspokenness, DC's central neighborhoods are doing just fine.
The other day I posted a silly thought experiment about using a van for personal storage and keeping it parked on the street. The analogy was flimsy and people pointed out problems with it (I ignored the costs of registration and insurance, I ignored the fact that the van might get targeted by thieves, and generally speaking, it's kind of a pain for just storing a bunch of junk).

For all those reasons, I was never actually considering doing it; but from the comments it sounds like some people already are (in DC and elsewhere). In any case, now that the conversation is going, I can get a little more serious about the issue.

(from thisisbossi on Flickr) 

We know what the market price for parking is in DC, and it's not the same in every neighborhood. In some areas, like around Dupont Circle, a monthly pass for a garage might cost as much as $250 per month. At $35 per year, street parking is offered at roughly a 99% discount to the market price for that area. It seems obvious why so many people would opt for a Residential Parking Permit and try to park on the street, even knowing that space is tight.

Let's forget about the hypothetical person who wants to use a parking space as a storage locker, but instead think of two people whose profiles actually seem common in DC...

Occasionally I joke on Twitter about my  plan to buy an old, beat-up Chevy Astro Van, park it on the street near my house, and use it exclusively as storage space. It sounds ridiculous, but it's actually an interesting thought experiment.

(from analog photo fun on Flickr)

People typically react by saying that doing this would be an abuse of the public parking system. Street parking is supposed to be for parking cars, not storing stuff they say. But in essence, street parking (public space) is used to store automobiles (privately owned things) for little to no cost (it would cost me $35 per year for a residential permit in my neighborhood). Using a van for storage would cost significantly less money than renting a space at one of those self storage warehouses, and it would be a lot more convenient.

Using an Astro Van as a storage locker would cause some pain for drivers in my neighborhood. Since I'd never move the van (except when legally necessary for street sweeping or an emergency no-parking permit holder) the space would never turn over. I'd single-handedly eliminate a valuable parking space from the neighborhood. And yet - doing so is perfectly legal and within my rights, under the current law.

Why is it that if I want to store a bunch of junk, I should have to go pay market price to do so? But if I want to store a car, the city will give me space, near my home, for practically free? That's really the central issue that's going to be at the heart of the many parking debates to come this summer. There will be finger pointing, there will be claims about what street parking should be for, and who street parking should be for and why it should be provided for next to no cost.

At the end of the day there will be a lot of unhappy people. But as I see it, this is an issue that will always have a lot of unhappy people. We're talking about a lucrative government subsidy, after all; and the people who like getting it aren't going to give it up without a fight.

Mixing Sports and Business

In the last two days I've devoured every article in the Washington Post about the Nationals painful and epic defeat on Friday night in the NLDS. It was a tough way to see the season end, there's no doubt about that.

(from wallyg on Flickr)

These articles make it clear that there are a lot of people emotionally invested in professional sports. I think they sometimes they forget that, ultimately, Major League Baseball is big business. Each team is a major corporation and the league itself is an organization governed by a bunch of executives. The television networks that show the games are under contract with the team owners and the games aren't usually available to those without cable.

This is why it can be so hard to be a fan in this game. It's the multi-millionaire and billionaire owners that call most of the shots. They get to decide how much they're willing to spend on players. They get to decide who to hire as the CEO of the company. They get to decide how much they charge their fans for the privileged of attending a game. They get to decide whether having a winning team is more profitable than having a losing team. Hell, they get to decide whether to even stick with their current city or pack up and leave for another.

In this arrangement, the "fans" are really "customers" and the "players" are just "employees" of the company that is the franchise. The fans put their hearts into their favorite teams, but it usually feels like the billionaire owners think about themselves before they think about the fans. Psychologically, fans don't like the idea that they're customers of their favorite team for the same reason college students don't like the idea that they're customers of the school they attend.

There were a lot of shenanigans that got on my nerves at the end of this year's regular season. Lerner's refusal to put up a few thousand dollars to keep Metro open late was at the top of that list. The actual cost would have been chump change, given how profitable a single postseason game surely was. But the refusal to do it made me feel conflicted - how could I be enthusiastic about a team who's owner behaves like such a selfish jerk?

The way MLB handled playoff scheduling and their contract with TBS was another thing that bothers me. The Nationals had the best record in baseball, but only got to play one night game in the five game NLDS. For the first home game of the series, MLB stuck Washington with the 1pm game and decided that it would be shown on the obscure Major League Baseball Network. Even the games shown on TBS seemed amateurish and the commentators were downright terrible.

Should the playoffs be a time to reward teams for their performance in the regular season? Maybe; but MLB's playoff scheduling is deliberately designed to put the most "profitable" games in prime time and stick the less profitable games in the afternoon time slots. The Nationals may have had a lot of success during the regular season, but they didn't have the all important "brand" that MLB cares about.

People like to think of professional sports as a game and not as a business. At least baseball would be a lot more enjoyable for the fans if their interests were aligned with the team owners - winning games. The reality is that fans of some teams have it better than others, but at the end of the day, it's all business, and it's all money.

Businesses as Third Places

Jessica Sidman has a well-written story about Yola, the recently-shuttered yogurt/coffee shop in Dupont Circle. I'll admit that I didn't go to Yola especially frequently, though I don't work too far away. That said, it was the kind of business that people frequently say they want in their neighborhood - a warm, inviting shop with lots of seating and better than average food and drinks.

(from Brother O'Mara on Flickr)

One of the store's partners is surprisingly open about the experience and the hardships that came with it. It's a story that makes me feel pessimistic about doing something as entrepreneurial as opening my own coffee shop in the city. She explains the problem about as explicitly as anyone ever has:
"We are a $5 average check size business in a close to $10,000-a-month rent location. It just doesn’t work. The math doesn’t work.” 
It's easy for an observer to sit back and recount the ways the business was a failure, or how it was doomed from the start. The same thing happened when Mid City Caffe shuttered last year. These people would say "a businessperson who knew what they were doing would have never opened in the first place, because the conditions weren't right".

Unfortunately, that's the reality and the problem. The environment is such that either a bright-eyed entrepreneur tries, and eventually it doesn't work out; or the business simply never exists in the first place. So whether or not it ever gets a chance, it simply isn't a sustainable proposition.

To survive, the business has to make either the revenue side of the equation, or the cost side of the equation, work in their favor. The problem is a classic chicken and egg: in order to make revenue, you need volume, and volume is highest where there's a lot of foot traffic.  Rents are also highest where there's a lot of foot traffic. Given that constraint, how do you make it work?

When I researched and wrote about this last year, the owner of Peregrine Espresso explained it to me in pretty clear terms. You have to keep the rent costs down, which typically means having as few square feet as you can reasonably operate a coffee shop in. It means you do a lot of take out business, and dis-incentivize "camping" at tables. In essence, you make it work by not being a "third place".

 Over at District Bean, coffee guru Jonathan writes:
In the grand scheme of things, though, there is so much activity in the DC coffee scene that the closing of one shop is but a blip in a wave of progress. 
I think he's right, but I also think this points to the divorce between coffee and third places. We'll still have coffee shops, especially ones that serve good coffee, because more people are demanding it than ever. But these coffee shops will either be located in storefronts with virtually no space, requiring you to take your drink to-go; or they'll share space with a business that can successfully cross-subsidize the coffee side, like a bar.

At the end of the day, a business can only be a viable third place if it's also profitable, and I think the days of coffee shops being meeting places or studying places or blogging places are over. Good coffee will live on, but the space where we enjoy it will change.

A Defense of Schlepping

Tess Wilson has a great article at Apartment Therapy that points out the benefits of schlepping stuff around the city. Her post focuses mostly on the fact that schlepping is good exercise, which it is; but I'd argue that it's even more than that. It's a seeming inconvenience that has plenty of unintended benefits.

Take grocery shopping for example. There are plenty of people who will argue until they're blue in the face that grocery shopping without a car is an unacceptable burden in life. I wouldn't take it that far, but I would agree that it's less convenient and more challenging to do than if you have access to a car.

(from william couch on Flickr)

I don't have a car, so when I do it, it means I have to make strategic shopping choices. I don't buy whole watermelons or 12-packs of Pepsi because those things are really heavy and bulky and difficult to transport without a car. To some people this is a great tragedy.

What would life be without sugary soda and 15 pound melons? To me, it's a blessing in disguise. Schlepping means I keep fresher food in the house, because I'm not tempted to "stock up" on junk that keeps indefinitely in the pantry. It means I have less waste because I don't overbuy.

No, this isn't for everybody, and I've heard dozens upon dozens of reasons why it's impossible for many people and many families. But that's not the point. The point is that sometimes when you look past what seems obvious, and you move beyond seeking out convenience at any cost, what you find might not be quite as bad as you might think. It could even be a blessing in disguise.

"Devil Wagons"

The transportation exhibit at the Smithsonian's American History museum is one of my favorites. It's as much about the evolution of transportation technology as it is about the history of suburban sprawl. It's a pretty balanced approach to the issue too.

(from gGraphy on Flickr)

Last weekend I stumbled across this little nugget in the exhibit:
Americans Adopt the Auto

Cars Everywhere?

For automobiles to become a permanent fixture on the American landscape - rather than simply a toy for the rich - people needed to be convinced that they were reliable, useful, appropriate, and even necessary. In the early years of motoring, not all Americans were convinced that the new "devil wagons" were here to stay. But as people came to value the convenience of the car, and as they adapted it to their own needs, cars became a significant part of everyday life.
This statement is enlightening because today we take for granted that cars rule the urban landscape, and in fact, the "necessity" of them was not immediately obvious when they first came onto the market. In fact, the necessity of them was questioned pretty aggressively.

Today, people believe that cars are absolutely a necessity - and they're not entirely wrong. But it's because we made policy decisions throughout history that made it that way. The reason why sprawl happened the way it did is complex. It's not simply because people wanted it to happen, as some believe; nor is it simply because government pushed it to happen, as others believe. The reason is somewhere in the middle, but it didn't happen by accident.

Legal Gray Areas

There's a rant over at the Washington Post about towing companies in the DC area. You can click through and read the article, but it sums up like this: Person can't find a legal parking space in a busy neighborhood. Person decides to park illegally instead. Person leaves the car unattended for ten minutes and car gets towed for being parked illegally. Person gets very upset. Person calls the situation "predatory". The end.

(from roujo on Flickr)

The article makes every indication that the author knew that parking in the space was illegal. There's also nothing to lead the reader to believe the towing company acted in violation of the government's regulations. If there were evidence that the towing company acted illegally, I think it would be more than fair to call this "predatory", but let's examine the situation for how it's described.

This point in particular caught my eye.
So we pulled into one of about four empty spaces outside a dry cleaner that was closed, right next to the building entrance. And, yes, there was a sign that said towing was enforced 24 hours.
I stayed with the car until I had to go up to help my husband lug the piece through the lobby. I put a sign on the car windshield written in Magic Marker: “Moving furniture, back in 10 mins, PLEASE don’t tow,” and put my flashers on. No mercy!
Emphasis mine. I see this every single day: an illegally parked car (usually doubled parked, but sometimes parked in a rush-hour zone) and the hazard flashers blinking, and I don't get it. Why do people think that putting the hazard flashers on makes an illegal parking job acceptable?

If anything, doing this does two things. First, it draws attention to the vehicle, so that the nearest parking enforcement officer can ticket the car, or call for a tow, or both. Second, it's an admission of guilt. The person parking illegally clearly knows it's wrong but does it anyway. You never see legally parked cars with hazard flashers on... The only thing I can think of is that this maneuver might prevent someone else from rear-ending the illegally parked car.

There has been a lot of discussion about ethics in transportation recently. First a debate over whether cameras should be allowed to catch speeders. Then a series of articles about whether it's OK for bicyclists to go through red lights. Now this about whether it's "predatory" for a company to tow an illegally parked car. All we need is someone to write an article about whether jaywalking is acceptable and we'll have hit the transportation ethics trifecta.

One common theme seems to come out in these pieces. A non-negligible number of people will say "it's totally illegitimate and unacceptable to bust speeders or illegal parkers if the speeding or illegal parking wasn't too bad".  There are people who will say "of course bicyclists need to go through red lights for X, Y and Z reasons".

Point is, it doesn't matter what the mode of transportation is in question, law breaking is rampant out there. The question is when and if law breaking should be tolerated. Should going 5 mph over the speed limit be ignored but 15 mph over not? Should illegally parking for 10 minutes be tolerated by illegally parking for 30 minutes not? How do we draw that line?

It's a very difficult conversation to have because the public opinion is not black and white. Instead, we're in a weird gray area where it's really difficult to decide on the appropriate shade of gray.
The Washington DC economy benefits heavily from tourism. Some businesses benefit directly while others take advantage of tourism spillovers. Is Capital Bikeshare in the same boat? I took a look at membership and trip data for one year from April 1, 2011 through March 31, 2012 to get to the answer.

Capital Bikeshare offers a variety of products, from one-day memberships up to annual memberships. Annual and monthly members (registered users) have plastic red keys that allow them to access the system. Everyone else (casual users) use their credit card to access the system for short-term periods. Though not perfect, this makes a nice proxy for locals (registered users) and tourists (casual users).

More short-term memberships were sold during the 12 month study period than for full-memberships. But since full-memberships cost more they ultimately generated more estimated revenue*.

Click to Enlarge

*This is a good time to mention that these are not actual revenue figures. These are estimates that I'm calculating based on membership, trip and price data. The actual numbers are probably slightly different. For example, the revenue statistic for registered users is likely inflated because I'm not taking into account the Living Social deal that Capital Bikeshare ran last year; but for the sake of this post I'll assume a "best case scenario". A more detailed methodology and caveats is posted here.

The real difference comes when you look at how registered and casual users are utilizing the system. Prior work has shown that casual users have a much higher propensity to take rides that incur fees. In fact 97% of registered user trips were less than 30 minutes and therefore generated no revenue. Only 59% of casual member trips were under 30 minutes.

Taxing Olympians

I stumbled across this article yesterday on the Americans for Tax Reform website. It's about how the IRS can (in theory) tax Olympics athletes who win medals, on the basis that those medals are taxable as income. The conclusion of the post is: isn't it outrageous?!

(from Shazz Mack on Flickr)

The problem with the simple analysis is that it assumes an absolute worst-case scenario. In other words, they present a chart that shows the tax costs for gold, silver and bronze medals, assuming that the winner falls into the 35% tax bracket ($388,000 per year and above).

Now, some athletes certainly fall into this bracket. The NBA players on the men's basketball team are filthy rich, so it's hard to feel bad that the tax falls on them. A few other high profile athletes, like Ryan Lochte and Michael Phelps get big bonuses from their sponsors and aren't hard-up for money. But I suspect that many American Olympians are of modest means and probably don't pay a 35% marginal tax rate anyway.

The funny thing is that the Americans for Tax Reform article links to a Reuters article that concludes with this:
Still, [Alex Knight, a tax partner at Atlanta’s Habif, Arogeti & Wynne] doesn’t expect to see the IRS chasing after athletes for a slice of their gold. “I have to imagine that would be a public relations nightmare,” says Knight.
Taxation is a funny topic. Nobody likes to pay them, so it's easy to point to any tax, no matter how far fetched and say, "hey look, the government wants to take your money, isn't that outrageous!?" Well, sometimes it's a lot less outrageous than it may sound.