A teeny tiny violin for NYC’s taxi speculators
April 21st, 2012 at 7:13 pm ETTaxi medallion owners in NYC are up in arms over a proposal adopted this week to allow the sale of a special class of livery cab medallions that will allow street hails. This sort of thing is probably uninteresting to anyone outside New York, but the gist of it is this:
The supply of NYC taxis (the cabs in the familiar yellow livery) is constrained by the city. To put one into service, you don’t just have to comply with a long list of very specific regulations regarding the equipment; you also have to purchase a medallion giving you the right to own one. New medallions are not being issued, which means there is a speculative market in them, and the going price is several hundred thousand dollars.
NYC taxis cruise the streets of Manhattan (below 96th Street) frequently and are easy to hail. In certain parts of Brooklyn, they’re easy to hail. In the rest of the city (where the vast majority of New Yorkers live), they are few and far between. (This is the market in action; cabbies go where the density of business is.) As a result, people outside Manhattan tend to use livery cabs.
Livery cabs are also regulated by the city, but much more loosely, and no medallion is required. They are enjoined from picking up street hails, although often they do.
The city has adopted a proposal that will sell medallions for livery cabs for $10,000 permitting street hails. Medallion livery cabs will be required to install meters, and will presumably be subject to a range of other normalizing measures to protect consumers in the same way that medallion taxis are.
Taxi medallion owners (who are, on the whole, not taxi drivers or taxi owners, but investment syndicates) are concerned in effect that their rents — the money they receive as a result of owning something, not of doing anything — are being put at risk. But I don’t understand why. The new class of medallion livery cabs won’t be permitted to pick up street hails in Manhattan or at the airports, which is where the yellow cabs all operate anyway. And it’s not as though the market can’t support more supply; have you tried to get a cab at 5pm in Manhattan?
Let the market work, I say. It’s undisputed that there are millions (literally millions) of New Yorkers who can’t hail a cab in their own neighborhoods and would do so if they could. Theoretical (not actual, but theoretical) financial loss to a few dozen speculators should outweigh actual daily inconvenience to millions of people?



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Rich Mintz blogs on online fundraising and social media, American history and culture, bicycling and urbanism, food, technology, and other topics. Professionally, he's an expert in fundraising, constituency development, and social media for nonprofits, cultural organizations, cause-related marketers, and corporations. He is based in New York, where he serves as Vice President, Strategy, for 