Posted on 08/08/2011 8:21:12 PM PDT by SeekAndFind
The New York Taxi and Limousine Commission just sold two taxi licenses at auction for the record price of $705,000, according to the NY Post. An aluminium plate on the hood of a yellow cab, the taxi medallion is a license to legally pick up passengers that informally hail cabs from the sidewalk. This privilege is reserved for the 13,237 licensed yellow-cab operators.
This system works very well for those that are in the system, much like a cartel or a medieval guild. It benefits those that are in the system at the expense of other drivers that might want to compete with them as well as passengers. This is why yellow cab drivers are so opposed to Mayor Michael Bloomberg's plan to allow livery cabs (those without medallions) hail passengers on the street. In under-served outer-borough neighborhoods where yellow cabs are rare, passengers routinely flag down livery cabs already.
The price of a medallion has tripled since 2000, even when adjusted for inflation. The drivers that are already in the 'guild' have a serious interest in keeping the system intact. To start, they have paid into the system by buying the medallion, and they don't want that solid-gold investment to be debased.
Also, if there were more drivers on the road, there would be more competition for fares. As a farmer's pension is his land, the medallion is not so much a possession as a retirement fund. One Pakistani driver worked for 26 years and sold his medallion for a profit of $570,000. Any of the taxi medallion-specific financing companies that loan money for the medallions also have an interest in keeping the system as it is.
(Excerpt) Read more at businessinsider.com ...
A scandal.
Every job, gov’t action, or money-making venture in NY City seems to be a rigged guild, union, or committee.
What happens when Wall Street declines to the point where NY’ers can’t pay for it all?
hard to imagine how this can pencil out for a cab driver yet alone how they can afford it. If the can afford that it seems they don’t need to be driving a cab. Oh well, I’m missing something here.
insane rent seekers.
They want a barrier to keep out competition. Bad idea.
The NYC Taxi medallions have always been insanely expensive. They are limited in number, and sold off at auction.
These high prices have driven out the individual entrepreneur and have given way to major companies owning medallions and leasing out cabs on a daily basis to drivers.
Another NY disgrazia!
Kinda like Pennsylvania and other states with blue-hair-supported blue laws controlling bar-and-resturaunt liquor licenses and state ownership of all spirits retail?
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