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> the capital costs of entering the taxi business are low. Is what I suspect is the key point. Because capital costs are so low, it's easy for anyone to get in
by sprout 16y ago
> the capital costs of entering the taxi business are low.
Is what I suspect is the key point. Because capital costs are so low, it's easy for anyone to get into the business. Because it's easy to get into the business, you end up with lots of turnover as people come in looking to charge high rates, get tired of it, and move on to some other job.
Medallions artificially raise the capital costs involved in becoming a Taxi driver, and therefore make people more likely to continue as drivers, since they want to recoup their initial investment, and it's not trivial to do so.
- jessriedel 16y ago> Because it's easy to get into the business,...charge high rates, get tired of it, and move on to some other job. This doesn't follow at all. All other things being equal, barriers to entry drive prices up, not down. If you want to argue that taxis are different than most other businesses in this respect, you're going to have to explain why.
- sprout 16y agoI'm providing a hypothesis to support the data they claim exist (and I'm inclined to trust that it exists.) Unless you can provide information on case studies where deregulation has provided benefits, I'm going to trust the OP. Data > intuition. Also, alternate hypothesis: cabs are less likely to use meters when things are deregulated, so most people don't know what they're paying for, and overpay.