The problem with cabs is the information asymmetry. You dot know before you're getting in how good their knowledge is, this means that knowledgeable drivers can't charge more and you get a 'market of lemons'. This is a classic form of market failure, and is a strong case for regulation.
There's nothing stopping a competitor from starting a cab company that charges more and gives all their employees a difficult test. Of course, few would use it because few are willing to pay more money for having a knowledgeable taxi driver.
You dot know before you're getting in how good their knowledge is
Why not? Grant a certification with the test, allow cab owners/companies to put a mark on the car/site/etc, sue people using the mark without authorization. Cabs around here already have big ads on their doors, I don't see why couldn't they have a logo advertising their knowledge.
So any small business or startup without name recognition should be restricted from the marketplace by a higher authority until a government entity approves its service? Is that what you're saying? Wouldn't this basically kill Ycombinator?
Yes, that's how it works. If you want to run a restaurant you need to obtain a certificate saying that it's safe and hygienic, if you want to run a theatre you need to make sure that emergency exits are clearly marked and that there is sufficient ventilation, and also, if you want to transport people for money you need to have a certificate that says that 1) you are able to physically 2) your vehicle is in good enough condition. For all of those things you need the "higher authority" and it's a good thing.
Transport is the lifeblood of a city, and is extremely important to that city's economy. I think it's reasonable to say that it's a little different than the next photo-sharing app.
Googling is not an option when I'm on the street and I need a cab (I don't have mobile Internet access, nor can I justify the cost), which is most of the times when I actually take one.
