Here's an article on the economics of a taxi in NYC: http://www.businessweek.com/news/2012-07-12/new-york-taxi-commission-approves-first-fare-increase-since-200

Here's an article on the economics of a taxi in NYC: http://www.businessweek.com/news/2012-07-12/new-york-taxi-commission-approves-first-fare-increase-since-2006 http://www.businessweek.com/news/2012-07-12/new-york-taxi-co... According to the article, at the end of a 12-hour shift, a driver goes home with $160 after paying $120-$130 to rent the cab & medallion and $8 for credit card processing. There's also gasoline costs, which the article doesn't give a number for, but as a guess, a driver might go through half a tank on a shift for $40, and that's in an inefficient large car with a V8. So over half of the cost of an NYC taxi is the driver's labor, and a nontrivial portion of the taxi rental goes to pay for the taxi medallion, which has gone up in cost to a million dollars in recent years: http://www.slate.com/articles/business/moneybox/2012/06/taxi_medallions_how_new_york_s_terrible_taxi_system_makes_fares_higher_and_drivers_poorer_.html http://www.slate.com/articles/business/moneybox/2012/06/taxi... Many other cities have the same problem, like my hometown Milwaukee: http://wisconsinreporter.com/milwaukee-taxicab-battle-test-of-free-market http://wisconsinreporter.com/milwaukee-taxicab-battle-test-o... The economics of taxi service in the US are largely driven by labor costs as well as regulations that have been perverted to funnel money to a rent-seeking set of license/medallion owners, not the running cost of the motor vehicle.