9 ms·

The medallion system pretends to regulate the taxi industry, but in actuality it’s a scheme that allowed people to buy into a monopoly. This unusual arrangement

by bww 9y ago

The medallion system pretends to regulate the taxi industry, but in actuality it’s a scheme that allowed people to buy into a monopoly. This unusual arrangement has insulated the taxi industry from normal market forces at the expense of pretty much everyone living in or traveling to New York. Riding in a New York taxi is unpleasant and expensive, but since it was a monopoly it had no incentive to do better and there were never any real consequences for failing to provide decent service – even as it became increasingly aggressive in soliciting outrageous tips and jamming advertising down its customers throats. But it’s not a monopoly anymore and that’s a good thing for New York. I won’t shed a tear for the taxi industry.

djchung23 9y ago
Totally agree with you wrt to the taxi industry, but it's the individual stories that are heartbreaking :( "While the auction has drawn attention to the precipitous fall of the once-mighty taxi industry, it does not reflect the hardship — and heartbreak — of individual owners like Mr. Isac. It is their stories that often get lost in the larger debate over new technology and commutes, and tell of the human cost of the city’s rapidly evolving transportation landscape."
- chii 9y ago
  > it does not reflect the hardship ...of individual owners they bought into a system that really shouldn't have existed. Investments that fail are tragic, but losses of this nature can't really be protected from those who make it (otherwise, there'd be moral hazzard).
  - SonicSoul 9y ago
    it's pretty amazing how ignorant people are, and all in the name of intellectual superiority. you probably have a good job due to all kinds of luck (though im sure you don't think there was any luck) and then quickly judge these people for making a stupid decision. Meanwhile these people have very limited options and buying a medallion was the closest thing they could do as an investment into their future. is it a racket? maybe, but so is the stock market and corporate jobs. just because they are still working out, does not mean they will forever. Much like medallions it's all a myth that will work as long as it's not disrupted by something else. So these people put so much money on the line to buy into this system and work 2-3 shifts/day driving your drunk ass from club to club and all you can do is look back and call them stupid for buying into something that was impossible to predict that would be disrupted so quickly. it's so easy to turn around after a disruption and call anyone in the disrupted industry a fool for buying into "a system that shouldn't have existed" /end rant.
- unlmtd1 9y ago
  Crying for those poor people who bought into a racket? They lost a bunch of money dealing with criminals. Not sure how it's heartbreaking. Ppl using even slightly dirty combustion engines are committing a crime against everyone else. So they're double criminals. Still heart broken? Iv got a license to kill anyone, emitted by our committee for world order. It's a safe investment. Want in?
  - totalZero 9y ago
    > Crying for those poor people who bought into a racket? For those immigrants who bought into a city-regulated industry, yes.
    - arcbyte 9y ago
      > city-regulated industry That was the red flag right there
BurningFrog 9y ago
> it’s a scheme that allowed people to buy into a monopoly It is a rather ingenious "free market monopoly hybrid" that I can't think of existing in other fields.
- kristopolous 9y ago
  sure there is ... any centrally allocated system of real or artificially scarce resources based on market dynamics works this way. For instance, radio frequencies, water rights, domain names and ticket scalping. In some municipalities liquor licenses, mobile network providers, broadband, and now marijuana licenses work this way too. I wouldn't be surprised if banks, cosmetologists and realtors were like this too, but I don't know enough about them.
  - adamlett 9y ago
    Not to mention the music industry or really any industry whose business model is enabled by copyright.
    - em3rgent0rdr 9y ago
      More broadly: not just copyright but intellectual-property in general, which is government-granted monopoly protection.
      - adamlett 9y ago
        You're right in principle, and I thought about writing the same. But trademarks are IP too, and I have a hard time seeing how this applies to them. I also think copyright is far worse than patents for a few reasons. Firstly, patents do expire, whereas copyright never seem to. Secondly, patents disputes are mostly between businesses, which mean the forces are roughly equal on either side. Copyright disputes are sometimes between businesses, but more often than not, they are between businesses that hold the copyright on one side, and consumers on the other. And in those cases, the balance of power is tilted massively in favor of the right’s holders. Which I am guessing goes a long way to explain why the copyright period keeps getting extended.
afsina 9y ago
Agreed. In Turkey, taxi medallions are part of a terrible system. They are extremely expensive in big cities. In many cases, Taxi drivers do not own them. Different drivers work in two or three shifts and pays a predetermined amount to medallion owner (a hefty sum). Sometimes medallions are rented by a third party and he manages the taxi drivers and pays to the top dude. Government does not allow Uber like systems. Also Taxis are very expensive especially in smaller cities. And no, many does not behave nicely. They are also reckless in traffic. So we stuck to this monopoly and nobody questions. Why is driving a Taxi a profession in this age of technology? Anybody with decent driving skills can do this yet Taxi drivers are the first to prevent any competition. This pattern is quite noticeable in many other areas of industry. They make restrictions and regulations with good intentions, later it turns to a monster.
- jacobush 9y ago
  "Traditional" taxi does not have to be bad. I think (I may be mistaken?) London taxi drivers are quite polite and also have to memorise the geography of London, which I imagine keeps a lot of would be but lower quality drivers out.
  - beagle3 9y ago
    I agree, But it's still a monopoly that charges monopoly rents, mostly because of "tradition".
  - SuperGent 9y ago
    Indeed, but those that spent 2-3 years gaining the knowledge[0] and then paying for their cab, and licence are then being usurped by a Uber driver with a GPS and a cheap car. Even with the 'star' system the service levels will drop. [0]https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/learn-the-knowledge-of-london https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
- KozmoNau7 9y ago
  "Government does not allow Uber like systems" Uber is banned in Denmark as well, but this is because there are absolutely no security requirements for Uber drivers, no mandatory first aid traning, nothing. Proponents of Uber call it a "ridesharing system", but it really is a taxi system, and must abide by the same rules, namely driver training, verified fare metering and other security and fairness measures. Uber has refused to respect the rules, so they have been banned from operating here, until they can abide by the rules, which are in place mostly for passenger safety and to prevent fraud. "Why is driving a Taxi a profession in this age of technology? Anybody with decent driving skills can do this" This can only come from a person who does not know what it actually takes to be a taxi driver (not just a person who happens to drive a taxi, but an actual bona fide taxi driver). There is a certain level of customer service, competency and training involved. You can't just blindly navigate by GPS, you have to know the city, know the traffic, know the shortcuts that a GPS can only guess at.
bobthepanda 9y ago
To be fair, the reason the medallion system exists in New York is because road space in Manhattan is limited, and the taxis cause a disproportionate amount of traffic. Traffic conditions have gotten notably worse post-rideshare, although there are a bunch of confounding factors as well that could also explain that.

by bww 9y ago

djchung23 9y ago

Totally agree with you wrt to the taxi industry, but it's the individual stories that are heartbreaking :( "While the auction has drawn attention to the precipitous fall of the once-mighty taxi industry, it does not reflect the hardship — and heartbreak — of individual owners like Mr. Isac. It is their stories that often get lost in the larger debate over new technology and commutes, and tell of the human cost of the city’s rapidly evolving transportation landscape."

chii 9y ago
> it does not reflect the hardship ...of individual owners they bought into a system that really shouldn't have existed. Investments that fail are tragic, but losses of this nature can't really be protected from those who make it (otherwise, there'd be moral hazzard).
- SonicSoul 9y ago
  it's pretty amazing how ignorant people are, and all in the name of intellectual superiority. you probably have a good job due to all kinds of luck (though im sure you don't think there was any luck) and then quickly judge these people for making a stupid decision. Meanwhile these people have very limited options and buying a medallion was the closest thing they could do as an investment into their future. is it a racket? maybe, but so is the stock market and corporate jobs. just because they are still working out, does not mean they will forever. Much like medallions it's all a myth that will work as long as it's not disrupted by something else. So these people put so much money on the line to buy into this system and work 2-3 shifts/day driving your drunk ass from club to club and all you can do is look back and call them stupid for buying into something that was impossible to predict that would be disrupted so quickly. it's so easy to turn around after a disruption and call anyone in the disrupted industry a fool for buying into "a system that shouldn't have existed" /end rant.
unlmtd1 9y ago
Crying for those poor people who bought into a racket? They lost a bunch of money dealing with criminals. Not sure how it's heartbreaking. Ppl using even slightly dirty combustion engines are committing a crime against everyone else. So they're double criminals. Still heart broken? Iv got a license to kill anyone, emitted by our committee for world order. It's a safe investment. Want in?
- totalZero 9y ago
  > Crying for those poor people who bought into a racket? For those immigrants who bought into a city-regulated industry, yes.
  - arcbyte 9y ago
    > city-regulated industry That was the red flag right there

BurningFrog 9y ago

> it’s a scheme that allowed people to buy into a monopoly It is a rather ingenious "free market monopoly hybrid" that I can't think of existing in other fields.

kristopolous 9y ago
sure there is ... any centrally allocated system of real or artificially scarce resources based on market dynamics works this way. For instance, radio frequencies, water rights, domain names and ticket scalping. In some municipalities liquor licenses, mobile network providers, broadband, and now marijuana licenses work this way too. I wouldn't be surprised if banks, cosmetologists and realtors were like this too, but I don't know enough about them.
- adamlett 9y ago
  Not to mention the music industry or really any industry whose business model is enabled by copyright.
  - em3rgent0rdr 9y ago
    More broadly: not just copyright but intellectual-property in general, which is government-granted monopoly protection.
    - adamlett 9y ago
      You're right in principle, and I thought about writing the same. But trademarks are IP too, and I have a hard time seeing how this applies to them. I also think copyright is far worse than patents for a few reasons. Firstly, patents do expire, whereas copyright never seem to. Secondly, patents disputes are mostly between businesses, which mean the forces are roughly equal on either side. Copyright disputes are sometimes between businesses, but more often than not, they are between businesses that hold the copyright on one side, and consumers on the other. And in those cases, the balance of power is tilted massively in favor of the right’s holders. Which I am guessing goes a long way to explain why the copyright period keeps getting extended.

afsina 9y ago

Agreed. In Turkey, taxi medallions are part of a terrible system. They are extremely expensive in big cities. In many cases, Taxi drivers do not own them. Different drivers work in two or three shifts and pays a predetermined amount to medallion owner (a hefty sum). Sometimes medallions are rented by a third party and he manages the taxi drivers and pays to the top dude. Government does not allow Uber like systems. Also Taxis are very expensive especially in smaller cities. And no, many does not behave nicely. They are also reckless in traffic. So we stuck to this monopoly and nobody questions. Why is driving a Taxi a profession in this age of technology? Anybody with decent driving skills can do this yet Taxi drivers are the first to prevent any competition. This pattern is quite noticeable in many other areas of industry. They make restrictions and regulations with good intentions, later it turns to a monster.

jacobush 9y ago
"Traditional" taxi does not have to be bad. I think (I may be mistaken?) London taxi drivers are quite polite and also have to memorise the geography of London, which I imagine keeps a lot of would be but lower quality drivers out.
- beagle3 9y ago
  I agree, But it's still a monopoly that charges monopoly rents, mostly because of "tradition".
- SuperGent 9y ago
  Indeed, but those that spent 2-3 years gaining the knowledge[0] and then paying for their cab, and licence are then being usurped by a Uber driver with a GPS and a cheap car. Even with the 'star' system the service levels will drop. [0]https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/learn-the-knowledge-of-london https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
KozmoNau7 9y ago
"Government does not allow Uber like systems" Uber is banned in Denmark as well, but this is because there are absolutely no security requirements for Uber drivers, no mandatory first aid traning, nothing. Proponents of Uber call it a "ridesharing system", but it really is a taxi system, and must abide by the same rules, namely driver training, verified fare metering and other security and fairness measures. Uber has refused to respect the rules, so they have been banned from operating here, until they can abide by the rules, which are in place mostly for passenger safety and to prevent fraud. "Why is driving a Taxi a profession in this age of technology? Anybody with decent driving skills can do this" This can only come from a person who does not know what it actually takes to be a taxi driver (not just a person who happens to drive a taxi, but an actual bona fide taxi driver). There is a certain level of customer service, competency and training involved. You can't just blindly navigate by GPS, you have to know the city, know the traffic, know the shortcuts that a GPS can only guess at.

bobthepanda 9y ago

To be fair, the reason the medallion system exists in New York is because road space in Manhattan is limited, and the taxis cause a disproportionate amount of traffic. Traffic conditions have gotten notably worse post-rideshare, although there are a bunch of confounding factors as well that could also explain that.