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Comment by netfire | Hacker News Reader

Plenty of industries are subject to local and federal government regulation, but that doesn't mean they should be protected from competition. Where does the motivation to provide good service at competitive rates come from if you are protected from competition? Such an agreement, in my opinion, is inherently bad for progress and for consumers in general.

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Protected from competition, no. Protected from unfair competition, yes. There are a limited supply of taxi medallions in NYC (~13,000?), the number of which is controlled by the government, and getting one (last I saw) will cost you upwards of a million dollars.

Uber is basically coming in, running a taxi business, and refusing to pay for the government mandated barrier to entry. I'm not expressing an opinion on the system as a whole, but I think it's hard to deny that taxi folks (from the drivers up to the people that own the medallions) have a valid reason to complain.

You make a valid point given the current system, but the government mandated system of limited medallions seems like an unnecessary barrier to entry and prevents small (and perhaps more innovative) companies from competing in the market. (which seems unfair). What benefit, if any, do the consumers get from limiting the number of medallions?

There are regulated industries then there are utility monopolies. In the latter case, the monopoly is part of the bargain that convinces a private company to get into a business subject to a particularly onerous regulation. Cab services are basically like utility monopolies. Protection from competition is part of the bargain cities make with them to get them to do abstain from doing otherwise sensible things like not serving unprofitable routes.

It seems you're trying to rationalize the situation. Taxis don't need to be regulated any more than other services. The reason these restrictions still exist is because politicians are afraid of the potential retaliation from the incumbents if the city deregulates the industry.

I'm not trying to rationalize anything. I'm trying to describe the status quo to people who don't understand how it got to be the way it is, and resort to hackneyed tropes.

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