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Uber, Lyft Continue to Destroy the Taxi Industry

A Very Serious Warning About Uber

Written by Jeff Siegel
Posted July 18, 2017

Not everyone loves free markets.

Socialists, wide-eyed millennials who see the tenets of capitalism as micro-aggressions, and hustlers of outdated technologies and irrelevant industries will always find others to blame for their own shortfalls.

Take the taxi industry, for instance.

As ride-hailing companies such as Uber and Lyft started taking market share from the taxi industry, the first response was a bag of aggression, frivolous lawsuits, and hired goons to petition the government to save them from their own self-imposed extinction.

No, I don’t have an ounce of sympathy for the taxi industry — an industry, by the way, that became complacent in terms of providing good service because it didn’t have to. When you’re the only game in town, you have that privilege.

But boy did things change when Uber and Lyft showed up to the party.

Today, the taxi industry complains about how these ride-hailing companies don’t have to abide by the same draconian regulatory hurdles that taxi companies do. Of course, it was because of those regulatory hurdles that the taxi industry maintained a very comfortable monopoly.

A $1 Million Privilege

The truth is, the taxi industry could’ve embraced the same technologies Uber and Lyft use today. But it didn’t. And now it’s paying the price for relying on the state to keep it in business.

Of course, it’s not just the taxi companies that are losing out. In fact, lenders are also losing big as the antiquated taxi industry drives gently toward that good night.

As reported by the Associated Press, lenders are the latest to feel the pinch from the progress. Check it out:

Three New York-based credit unions that specialized in loaning money against taxi cab medallions, the hard-to-get licenses that allow the city's traditional cab fleet to operate, have been placed into conservatorship as the value of those medallions has plummeted.

Just three years ago, cab owners and investors were paying as much as $1.3 million for a medallion. Now they are worth less than half that, and some medallion owners owe more on their loans than the medallions are worth.

Think about that for a moment.

Imagine having to run a business where in order to make a living, you have to get a loan — sometimes for as much as $1 million — to drive people from point A to point B. It’s absurd. And I couldn’t be happier to see this nonsense come to an end. But not everyone agrees with me.

Don’t Be a Loser!

I don’t know who said it, but I always loved this quote...

Winners develop a habit of doing things losers don’t want to do.

Henry Ford was a winner because the “losers” wouldn’t embrace the reality that something was better than the horse and buggy.

John D. Rockefeller was a winner because the “losers” wouldn’t accept that petroleum would be the fuel on which this new transportation technology would rely.

Jeff Bezos became a winner because the “losers” couldn’t see a bigger picture than brick and mortar.

The world’s most successful people become successful because they never accept the status quo. And thank God for that. But make no mistake; these folks also endure a tremendous amount of criticism and negativity from the “losers.”

Let me just give you a few examples...

This “telephone” has too many shortcomings to be seriously considered as a practical form of communication. — Western Union internal memo, 1878

Television won’t be able to hold on to any market it captures after the first six months. — Darryl Zanuck, head of 20th Century Fox, 1946

Airplanes are interesting toys but of no military value. — Marshal Ferdinand Foch, French military strategist, 1911

There is no reason for any individual to have a computer in their home. — Kenneth Olsen, president and founder of Digital Equipment Cooperation, 1977

Being a successful entrepreneur requires some thick skin and a lot of persistence. The same holds true for investors who choose to invest alongside these successful entrepreneurs in an effort to profit from the “next big thing.”

Here’s the Next Big Thing...

Back in 2010, when I told folks to buy Tesla (NASDAQ: TSLA) under $40, my inbox was flooded with vitriolic tantrums and unnecessary condescension.

Of course, I got the last laugh. Last I checked, Tesla was still trading above $300 a share.

The same happened with the early solar stocks I invested in, some of which delivered gains in excess of 900%.

I see it with legal cannabis stocks, too.

Check out this email I got back in 2015, when I recommended Canopy Growth Corporation (TSX: WEED) as a play on the burgeoning cannabis market in Canada.

It is irresponsible of you to recommend pot stocks. Pot is illegal and is a dangerous substance. You are telling people to invest in drugs! Your subscribers are going to lose their shirts. You should be fired!

I got that email when WEED was trading for about $1.50. Today, it’s trading around $8.00, representing a gain of about 430%.

A couple of years ago, it was like pulling teeth to get investors to take the legal cannabis industry seriously. But today, everyone wants a piece of this action. And who can blame them?

Next year, cannabis will be completely legal in Canada. In the U.S., more than half the states in the nation now have some kind of legalization in place, and just last month, Mexico legalized medical cannabis.

If you’re a regular reader of these pages, you know I often refer to this trend as the Great North American Legal Cannabis Trade. It’s been making me money hand over fist for more than three years now, and the gains keep coming. In fact, it’s about to get even better, as I explain in my latest e-book, “A Beginner’s Guide to Investing in Cannabis,” which you can get here.

My publisher has been so impressed with all the money we’ve made in this space that he even asked me to put together an introductory video to cannabis investing for folks who are just getting started. You can check that out here.

As an Energy and Capital reader, you know better than anyone that wealth creation does not come from accepting mediocrity and just going along with the crowd.

We were the first to help investors profit from the renewable energy boom back in 2006 and 2007; we were the first to help investors make ridiculous amounts of money during the fracking boom; and we’re the first to help investors create small fortunes by investing in the most lucrative legal cannabis stocks in the market. Heck, in my e-book, I even included 46 legal cannabis stocks you can buy right now.

The bottom line is that we’re here for one reason, and one reason only: to make loads of cash. And that’s exactly what we do, day in and day out. So if you haven’t already, please join us. Because sitting on the sidelines is not an option if you want to get rich.

To a new way of life and a new generation of wealth...

Jeff Siegel Signature

Jeff Siegel

follow basic@JeffSiegel on Twitter

Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

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