Next week, New York Governor Cuomo is likely to sign a bill
that will marginally increase competition in the NYC cab market. The
new rule will allow passengers to hail some livery cars in outer
boroughs and add 2,000 additional medallions for yellow cabs with
wheelchair access.
The auction of these medallions is projected to raise $1 billion. This figure might seem outlandish, but last month two medallions sold at auction for over $1 million.
That’s right, it costs $1 million for the right to drive a cab in NYC,
not accounting for any of the costs associated with owning and operating
the vehicle.
The price tag of these medallions that are sold to the highest bidder
demonstrates that in a free market, many more drivers would enter the
cab industry. Artificially constraining the supply hurts both consumers
and those who are not able to drive a cab because they are unable to
purchase a medallion.
Unsurprisingly, the Metropolitan Taxicab Board of Trade remains strongly
opposed to this bill. The increase in the supply of medallions will
lower the value of the medallions that cab drivers and larger medallion
companies already own. Their lobbying efforts reflect their desire to profit through the political system.
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| New York Taxis, by b00nj |
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| NYC Taxi, photo by PeterJBellis |
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| NYC taxi, by Niamor83 |
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