That's actually a really good point, and obviously I didn't get into it. "Medallions are good because they keep wages high" is a position I thoroughly disagree

That's actually a really good point, and obviously I didn't get into it. "Medallions are good because they keep wages high" is a position I thoroughly disagree with, but "medallions are justified as a traffic control system by the people who own the roads" is much better. Congestion and road wear aren't meaningfully priced into taxi fares, and it's possible that the socially-optimal number of cabs in circulation is well below the number a driver/rider market would generate. Already we see a lot of complaints about Uber drivers circling blocks and stopping in traffic, especially since they're most active in high-demand areas. (This also justifies the gap between low-density cities without medallions and high-density ones with them.) I still object to the medallion system. It's inflexible, doesn't scale automatically to demand, and creates ludicrously overpriced bearer instruments - with predictable consequences whenever supply increases. But I can definitely accept that cities have a good reason to keep the cab count lower than consumer demand would. I just wish they'd do it by taxing rides or something similar. We've got perfectly good tools for fighting externalities that scale with demand, so why are we still using medallions?