Wednesday, May 20, 2015
Ride-sharing services, such as Uber, are causing a collapse in the taxi medallion market. It's about time, and publicity about medallion holders being hurt is expected. The dirty secret of medallions is that they forced artificial scarcity. That caused the price of owning one to rise out of reach of almost all taxi drivers. Medallions were going for a million each in New York City not long ago. A driver working 14 hours a day, seven days a week for the rest of his life still couldn't afford to own one. The original idea for shields was to regulate the market for passenger safety and to provide a solid income stream to drivers. Neither objective worked well, and the artificial monopoly took a life of its own, One might not like the way Uber operates, but if it serves to bring the cost of medallions down, that will be enough.