The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World

by Brad Stone

For decades, San Francisco had deliberately kept the number of taxi medallions capped at around fifteen hundred. Medallions in the city were relatively inexpensive and couldn’t be resold, and owners could keep the permit as long as they liked if they logged a minimum number of hours on the road every year. So new permits usually became available only when drivers died, and anyone who applied for one had to wait years to receive it. Stories abounded about a driver waiting for three decades to get a medallion, only to die soon after. The system guaranteed a healthy availability of passengers for the taxi companies even during slow times and ensured that full-time drivers could earn a living wage. But demand for cars greatly exceeded supply and so taxi service in San Francisco, famously, sucked. Trying to hail a cab in the outer neighborhoods near the ocean, or even downtown on a weekend night, was an exercise in futility. Getting a cab to take you to the airport was a stomach-churning gamble that could easily result in a missed flight. (Even when a passenger arranged for a taxi via phone, he couldn’t be sure the cab would show up; the driver might decide to pick up a street hail instead.) Attempts to improve the situation were fruitless, since the fleets and their drivers were adamant about limiting competition. Over the years, whenever the mayor or the city’s board of supervisors tried to increase the number of medallions, angry drivers would fill city council chambers or s...