It's incredible to see cities that still do this. It means the investment goes into the medallion, the cabs can be crappy and the drivers don't get a fair return (the medallion owner does).<p>There are plenty of examples of cities that have abandoned the monopoly approach to supply and price of taxis. One example is every city and town across New Zealand.<p>Here's what it looks like:
The entry price for a new cab is low - a decent car that passes muster with regular inspections, a clean sheet for the driver and so on. There are no huge fees.<p>There are a lot more cabs than before deregulation (2 to 3 times). The difference is that even after a major event you can still catch a cab. That in turn means you are less likely to drive, as you know you can get a cab safely, and so those extra cabs get used.<p>There are a large range of cab companies - from unmarked 'limos' to branded Corporate Cabs, large regional players and then a host of cheap and cheerful players. My favorite right now is Green Cabs, which has a 100% hybrid fleet and charges less - as they save 30-70% on gasoline versus the v6 powered monster cars the traditional cab companies have.<p>You can pick the car you want when exiting an airport, and there are no monopoly suppliers at airports, though some pay to have better positions. There is no mandate to take the one in front, and people don't.<p>Prices are set by each company and registered with the government. They cannot change them each day, and they have to apply to all cars. It does mean that some firms are more expensive (nicer cars, better service) and some are cheaper. There are also some that are better for short trips (low flag fall, hugh cost per Km/Mile) and others for longer trips.<p>We have a market based economy for cabbies, and we as consumers and the cabbies (by the numbers) are much better off.
How can anyone, especially Wall St, credibly argue for free markets when there are mandated monopolies under their noses?
[edited to remove arbitrary attack on right wing]
<a href="http://en.wikipedia.org/wiki/Taxicabs_of_New_York_City#1930s_-_Medallion_System_Introduced" rel="nofollow">http://en.wikipedia.org/wiki/Taxicabs_of_New_York_City#1930s...</a><p>>> Only "medallion taxicabs," those painted in distinctive yellow and regulated by the TLC, are permitted to pick up passengers in response to a street hail. The TLC also regulates and licenses for-hire vehicles, known as “car services” or “livery cabs,” which are prohibited from picking up street hails (although this rule is less often enforced in the boroughs outside Manhattan)[44] and are supposed to pick up only those customers who have called the car service's dispatcher and requested a car.<p>Those $1m medallions are just an iPhone (or mobile web) app away from a crash. In fact, I think there's already some company that does this.
It would be interesting to see a breakdown of where the money goes when I take a cab ride. What % goes the the actual guy doing the driving? What % to pay for the vehicle? What % goes to the amortized cost of the medallion?
You too can own a piece of the taxi medallions in New York (or use them as collateral for loans, at least). Medallion Financial Corp is publicly traded (Nasdaq: TAXI).<p>Company: <a href="http://www.medallionfinancial.com/index.html" rel="nofollow">http://www.medallionfinancial.com/index.html</a><p>Quote: <a href="http://www.google.com/finance?q=taxi" rel="nofollow">http://www.google.com/finance?q=taxi</a>
Random notes.<p>The word "medallion" carries an emotional charge (it's archaic), but taxi medallions aren't all that different from commercial zoning restrictions.<p>Regardless of why they were introduced, medallions do more than restrict competition; they also give medallionholders something to lose if they abuse their license. Were barriers to entry eliminated, unscrupulous companies could put unsafe cabs on the road and simply fold up shop and reincorporate when anything bad happened.<p>Ironically, the sky-high price of NYC medallions is a result of a free-market spin on taxi licenses: taxi permits in NYC can be freely bought and sold (like seats on a stock exchange).<p>Cities have experimented with taxi deregulation and the results have been mixed; in particular, taxi deregulation has been reported not to improve driver salaries.<p>It's also important to remember that street taxi service is not a particularly efficient market system. In the norms of the taxi market, you cannot in fact be choosy about what cab picks you up (even if you could, there's virtually no information available to you when a cab pulls up). It's thus hard to argue that street taxi competition would be that beneficial to consumers.<p>On the other hand, because the street taxi market is also characterized by lots of externalized costs (pollution, traffic, hit-and-run accidents, etc), one way consumers could conceivably benefit from "competition" among cab drivers would be to auction permits off, and <i>increase</i> the cost of entry to the taxi market.
The price appreciation is artificial. It's disconnected from economic reality.
All it takes for the new Mayor of NYC to decide to issue thousands of new medallions and the price will fall.<p>This is what happend in Israel, when government issued many new taxi licenses and price fell from ~ $75K to ~ $25K.
With the super high cost of these Medallions, it seems like services like Uber should be able to compete on price, yet some how they're always more expensive than cabs.<p>Does anyone know why that's the case? Do Uber drivers consistently make more than cab drivers? Where does the money go?
The internet is great at killing business models where middlemen make the lion share of profit. Like Taxi medallion holders.
Über and services like it will destroy their margins eventually, and thus push down the price of medallions.