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Regulatory capture which exists because, before it existed, taxi drivers used to riot and attack each other. With potential supply consisting of "everyone with

Regulatory capture which exists because, before it existed, taxi drivers used to riot and attack each other. With potential supply consisting of "everyone with a car", either prices would be driven down to bankruptcy, or with prices fixed by law, demand would be smeared too thin, or (as actually happened) means of limiting the supply would be created (violence and mob links outside the law, or regulation inside it).

Sanddancer 13y ago
The problem is that with the medallion system, you're turning the ability to drive a cab into property. As such, it becomes a /lot/ harder to reasonably control supply, because adding medallions will garner protests from the existing holders, regardless of the needs of the city. Additionally, with the costs of these medallions, it becomes a lot harder for a middle class person to get started in the taxi business; you have to join one of the cartels and curry favor with them in order to have a chance to drive and get decent dispatches. I'd argue that the best way to handle the taxi drivers of all sorts is to move to a licensing system. Give priority to existing drivers, but at the same time, allow flexibility in setting the supply to give the little guy a chance to compete. Taxi systems in most city are corrupt from top to bottom, and these actions in France just show how the drivers are willing to go along with the broken system at hand.
- streetnigga 13y ago
  I came to realize a system like medallions were needed when seeing taxis clog traffic after venues with well paying customers were over. Supply is far more than demand in these cases, and even apps with scheduling won't keep the streets from being clogged beyond reason. Humans are a funny bunch who overall suck are cooperation, specially when trying the role of a worker ant.
  - jeffdavis 13y ago
    That sounds like a traffic control problem, a public transportation problem, and an event planning problem related to specific events rather than a need for medallions. Once the people are already there, they need to get home somehow -- what do you expect? How do fewer taxis help the problem?
    - streetnigga 13y ago
      "That sounds like a traffic control problem, a public transportation problem.." All those things come into play when regulating how many registered taxis are allowed on the street. Or the decision to regulate at all. Also its one of the sticking points for locales as to why they want to regulate operators like Uber as local planners need to be aware of them and their numbers. "..and an event planning problem related to specific events" The venues don't really have a say in who parks out in public streets, they can raise complaints if it becomes a problem though and often try to cash in by hiring services themselves. The more monied customers will most likely not ride the meat bus over to a public transit hub though.
  - Sanddancer 13y ago
    A licensing system would be more flexible there, as you could have categories of licenses to handle different types of demand -- rush hour taxis, etc. With a medallion system, every holder has a heavy financial incentive for their cab to be in service 24/7, due to its very high cost, meaning that during special events, you can and will get an excess in cabs.
jeffdavis 13y ago
"prices would be driven down to bankruptcy" Ample competition doesn't mean bankruptcy.
- JulianMorrison 13y ago
  Ample competition for a mostly-inelastic price-sensitive demand drives prices right down to break-even (or below), forcing all the small operators out of the market and resulting in consolidation and cartelization.
  - vdaniuk 13y ago
    I am studying economics atm, could you please provide a citation or an example of an industry that competition for mostly-inelastic price-sensitive demand drives prices down to break-even?
deleted 13y ago
[deleted]

Sanddancer 13y ago

The problem is that with the medallion system, you're turning the ability to drive a cab into property. As such, it becomes a /lot/ harder to reasonably control supply, because adding medallions will garner protests from the existing holders, regardless of the needs of the city. Additionally, with the costs of these medallions, it becomes a lot harder for a middle class person to get started in the taxi business; you have to join one of the cartels and curry favor with them in order to have a chance to drive and get decent dispatches. I'd argue that the best way to handle the taxi drivers of all sorts is to move to a licensing system. Give priority to existing drivers, but at the same time, allow flexibility in setting the supply to give the little guy a chance to compete. Taxi systems in most city are corrupt from top to bottom, and these actions in France just show how the drivers are willing to go along with the broken system at hand.

streetnigga 13y ago
I came to realize a system like medallions were needed when seeing taxis clog traffic after venues with well paying customers were over. Supply is far more than demand in these cases, and even apps with scheduling won't keep the streets from being clogged beyond reason. Humans are a funny bunch who overall suck are cooperation, specially when trying the role of a worker ant.
- jeffdavis 13y ago
  That sounds like a traffic control problem, a public transportation problem, and an event planning problem related to specific events rather than a need for medallions. Once the people are already there, they need to get home somehow -- what do you expect? How do fewer taxis help the problem?
  - streetnigga 13y ago
    "That sounds like a traffic control problem, a public transportation problem.." All those things come into play when regulating how many registered taxis are allowed on the street. Or the decision to regulate at all. Also its one of the sticking points for locales as to why they want to regulate operators like Uber as local planners need to be aware of them and their numbers. "..and an event planning problem related to specific events" The venues don't really have a say in who parks out in public streets, they can raise complaints if it becomes a problem though and often try to cash in by hiring services themselves. The more monied customers will most likely not ride the meat bus over to a public transit hub though.
- Sanddancer 13y ago
  A licensing system would be more flexible there, as you could have categories of licenses to handle different types of demand -- rush hour taxis, etc. With a medallion system, every holder has a heavy financial incentive for their cab to be in service 24/7, due to its very high cost, meaning that during special events, you can and will get an excess in cabs.

jeffdavis 13y ago

"prices would be driven down to bankruptcy" Ample competition doesn't mean bankruptcy.

JulianMorrison 13y ago
Ample competition for a mostly-inelastic price-sensitive demand drives prices right down to break-even (or below), forcing all the small operators out of the market and resulting in consolidation and cartelization.
- vdaniuk 13y ago
  I am studying economics atm, could you please provide a citation or an example of an industry that competition for mostly-inelastic price-sensitive demand drives prices down to break-even?

deleted 13y ago

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