[FoRK] Taxi Medallions: How New York’s terrible taxi system makes fares higher and drivers poorer.

Stephen D. Williams sdw at lig.net
Mon Jun 11 16:08:07 PDT 2012


On 6/11/12 12:17 PM, Joseph S. Barrera III wrote:
> On 6/11/2012 9:47 AM, Ken Ganshirt @ Yahoo wrote:
>> That is the way it originally started.
>
> I thought it started with the govt selling the medallions, not leasing them.

Somewhere, I believe in the story at the start of this thread, it indicated that this mess started when a rule change was made that 
the medallions could be leased out.  Once that happened, they were leased out by the shift and later through various intermediaries 
that invested in them.  Prior to that, they implied that you had to own the medallion to use it, which limited use to people who 
actually were in the business.

For other kinds of significant licenses, people who don't themselves have a license can work under the person who does, but they 
have to be closely supervised.  Paralegals, nurses performing procedures and handing out drugs, etc. all are in this vein.  If you 
essentially allowed the doctors to become licensing / indirect authorities, they too would boost their revenue by leveraging it to 
many workers who could cover many more customers.

There may be nothing wrong with limiting the number and quality of cab drivers and owners, but it is sad that the scarcity is 
accruing benefit to middlemen rather than some combination of the city and consumers.  When looked at certain ways (as if it were 
real estate, where and serious investor can later charge for apartments) it seems reasonable while in others (giving away airwaves 
or airport slots) it seems that benefit of competitive charges should go to the public good.  The mistake seems to be that this was 
treated like real estate when it is really a public commons (taxi service licensing) that should inure any thresholding fees 
directly to the public while minimizing public costs.  A thresholding fee may or may not be required, but seems to be here to create 
a barrier to weed out non-serious or shady participants.  Unless there is an extreme amount of skill and work involved (not here), 
this should be used as a public fee/tax, not a government giveaway to those that are simply good at gaming the system.

Contrast this to government sponsored skills checks by an FAA examiner: There is an extreme amount of skill and judgment involved, 
not to mention significant danger.  A typical fee is $250-400, probably mostly to the examiner.  Imagine if the examiners were able 
to extract a fee more like percentages of future revenue of employers for that pilot?  In a completely unfettered "capitalist" 
system, that could easily be the case.  Optimal for the one is not optimal for the many, unless the rules are carefully or luckily 
balanced.

>
> - Joe

sdw



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