Taxi medallions have been the best investment. Now Uber may be changing that

The situation isn't the same as your hypothetical situation though. The licenses aren't perpetual or (for the most part) transferable.

Incidentally, the traffic flows pretty well there.

In my view the taxi licenses should be of fixed length. It's ok to say "The roads only allow for 13K (or however many) taxis." It's wrong to give people a lifetime annuity based on it, and create a barrier to entry in the industry. Better to have a fixed term like 5 or 10 years. Long enough that it's worth investing in the business. Short enough that others can enter. And the total # should be flexible, perhaps linked to traffic and population.

City streets are a limited public good. Aside from ensuring quality and consumer protection, regulation & limiting the number of taxis ensures that traffic can actually flow. A traffic consultant says that NYC's plan to add 2,000 medallions could slow down all traffic by 12% because taxis don't park -- they roam the streets constantly.

http://www.npr.org/blogs/money/2012/07/31/157477611/does-new...

Two great examples: 1.) Staying in Fremont, CA, needing a trip to the San Jose airport at 4:50 in the morning. I had a cab 'scheduled' but a few drivers didn't show up, and they didn't bother calling me to let me know that they were not going to show up. The dispatcher didn't speak english well and didn't understand the questions that I asked. If I had instant feedback that nobody was coming, I would have made alternate plans the minute that I knew nobody was going to pick me up. 2.) In Chicago for a business trip. I generally don't carry cash, but, needed a ride from point a to point b. Taxi driver's sticker said he took credit cards, but his machine was 'down.' A "standoff" of sorts occurred between me, the taxi driver, and Chicago PD; ultimately, after the police harassing him (and reminding him that a working credit card reader was required in the city), he reluctantly ran my credit card and let me out of his car.

It's unfair that the Taxi companies skirt these rules too -- Uber and Lyft just give their ecosystems a quicker way to get ride of bad actors and focus on customer service, where the Taxi companies are focused on keeping the medallion owners happy.

The current regulation regime does not produce safety, fairness or improve quality, but it does stifle competition.

So yes I'm with you on this one. I also find it a little funny that everyone brings up anecdotal evidence about shitty cab drivers and awesome Uber drivers as an argument for deregulation. Such micro activities are meaningless in the face of what happens at the macro-economic scale.

Better regulation, like what you describe, seems better than no regulation, but I'd be willing to accept no taxi regulation if it gets rid of the political cronyism and high prices that go with it.

But it's not clear to me that other types of regulation are desirable. Environmental standards should be the same for all cars; driver training has been made almost redundant by sat-nav systems; a reputation-based system might be better than a 'requiring pickup' system.

In particular, I want a regulatory system that makes it easy for someone to be a taxi driver only from midnight to 2am on Saturday nights. Or only to and from the airport between 3pm and 6pm. This is the sort of flexibility that brings down costs overall.

Did you know in many cities you cannot be a tour guide without a license? Open a hair salon? Want to do business with a government agency, well there might be rules pertaining to the services your business provides in that case, and that case only.

The list goes on and on. Eventually we need to really analyze what really is important. I would say if life is on the line then you might be justified, but driving a few people between points on a map?

They should be regulated by the market. Consumers will buy what they want and suppliers will conform to demand or go out of business.

I agree.

The medallion system is a disaster. In fact, it's systemized government corruption. Most of these medallion-owning assholes have never driven a taxi in their lives. They're just rent-seeking vampires.

The purpose of limiting the supply of drivers is to prevent a race to the bottom-- and I would generally support that, for a variety of reasons. But the effect of the medallion system is that drivers do no better under the system than without it, because they have to pay enormous leasing fees.

A fully unregulated system is a bad idea (it means you're screwed if you live in the outer boroughs, it will encourage unsafe conditions and driving) but the medallion system needs to be shut down.

I do think things like Uber and Airbnb are very cool and innovative

Uber is an evil company. It's not surge pricing alone that makes it evil. It's the complete lack of transparency around surge pricing, and the fact that (unlike Lyft) it increases its own take when surge is in effect. It's one thing for prices to go up when the supply of cars can't mean demand. It's an entirely different situation when the (a) pricing algorithm is opaque and (b) it's determined unilaterally by a company with every incentive to manipulate it.

I am glad to see the medallion parasites under threat, though. If I were mayor of any of these cities, my first move would be to scrap the medallion system, with no compensation to their owners.

Good idea or horrible idea, certain cities created licensing regimes that promised to protect taxi drivers from competition if they paid for medallions. Now that others are flouting the law and circumventing the licensing regime, the taxi drivers want their protection money back if they're not going to receive the protection they were promised.

https://www.quora.com/Ride-Sharing/How-much-does-the-average...

Most of the numbers quoted seem to be in the general neighborhood of $20/hour, more if you do it as a part-time thing during peak hours.