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Medallion prices are a function of demand. As prices soared, the taxi commission should have been releasing more medallions as it meant that demand for taxi's

by davidu 11y ago

Medallion prices are a function of demand. As prices soared, the taxi commission should have been releasing more medallions as it meant that demand for taxi's had soared. Instead, the actual mafia-like taxi oligarchs pushed to limit medallions and thus drive up the price higher. This was an artificial market, not a demand-based market. When an externality came in that reduced demand, they were caught off guard, but they should never have been in this place to begin with. To blame Uber here is obvious, but far from fair. Sorry guys, you ran an artificial market, took out loans against that artificial market, and an externality came and popped your bubble. You had great times for a long time – now it's over. And it's not just Uber that people are picking over taxis. They are picking their time over taxis. If you read the last two paragraphs of this (terrific) article, the 'time' concept will make more sense: http://www.newyorker.com/tech/elements/the-long-history-of-the-fight-against-uber http://www.newyorker.com/tech/elements/the-long-history-of-t...

bko 11y ago
The taxi commission and banks at least are not trying to hide their real intentions. They think it's unfair that they have to compete. Maybe I live in a bubble but everyone I talk to sees right through this. But for some reason I feel the media is more apologetic and gives the TLC way too much benefit of the doubt. As a New Yorker, I love Uber and find it absurd that the mayor basically makes decisions about the cabs. Over the last several years, the "improvements" such as adding TVs to the cab seem completely unnecessary and not based on actual customer demands or preferences. Not to mention pricing by government decree leads to shortages during rush times and every cab honking at you looking for a pick-up during the off-hours. Oh, and if you're going somewhere the cab can't pick up a return, you'll be sure to hear about it. The other thing is that this objection seems way too premature: > By his count, only about 500 of the city’s medallions, or about 3.7 percent, are trading below their purchase price. That means that if banks foreclose, losses would be “insignificant,” he said. Surely the lending institution has to take some risk in regards to the value of the collateral. Unfortunately, the US has a precedent for bailing out financial institutions
- Mtinie 11y ago
  > Over the last several years, the "improvements" such as adding TVs to the cab seem completely unnecessary and not based on actual customer demands or preferences. Ah, but in fact you're mistaken. Actual customers did demand that they be added to the taxi fleets. Only the customers in this case are tangentially associated marketers who wanted to serve their products to a captive audience. :P
  - deleted 11y ago
    [deleted]
  - bko 11y ago
    Fair point. > Mr. Yassky (taxi commissioner) said that in lieu of demanding advertising revenue, the city hoped that the additional income for vendors might encourage them to lower the fees they charge to cab owners, which could in turn reduce the pressure to increase fares. “I don’t think advertising is so much an opportunity for city revenue,” he said, “so much as an opportunity to keep fares down.” Looks like NYC government isn't really benefiting but (presumably) bearing the cost of fitting these TVs. Government officials always associate price with cost rather than price with demand. http://www.nytimes.com/2010/12/13/nyregion/13taxitv.html http://www.nytimes.com/2010/12/13/nyregion/13taxitv.html
harmegido 11y ago
Just for future reference, you are using the term externality incorrectly. The word you seem to want to be using in its place is "competitor." Externality has a very specific, economics meaning: https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality
vtlynch 11y ago
All markets are artificial.

by davidu 11y ago

bko 11y ago

The taxi commission and banks at least are not trying to hide their real intentions. They think it's unfair that they have to compete. Maybe I live in a bubble but everyone I talk to sees right through this. But for some reason I feel the media is more apologetic and gives the TLC way too much benefit of the doubt. As a New Yorker, I love Uber and find it absurd that the mayor basically makes decisions about the cabs. Over the last several years, the "improvements" such as adding TVs to the cab seem completely unnecessary and not based on actual customer demands or preferences. Not to mention pricing by government decree leads to shortages during rush times and every cab honking at you looking for a pick-up during the off-hours. Oh, and if you're going somewhere the cab can't pick up a return, you'll be sure to hear about it. The other thing is that this objection seems way too premature: > By his count, only about 500 of the city’s medallions, or about 3.7 percent, are trading below their purchase price. That means that if banks foreclose, losses would be “insignificant,” he said. Surely the lending institution has to take some risk in regards to the value of the collateral. Unfortunately, the US has a precedent for bailing out financial institutions

Mtinie 11y ago
> Over the last several years, the "improvements" such as adding TVs to the cab seem completely unnecessary and not based on actual customer demands or preferences. Ah, but in fact you're mistaken. Actual customers did demand that they be added to the taxi fleets. Only the customers in this case are tangentially associated marketers who wanted to serve their products to a captive audience. :P
- deleted 11y ago
  [deleted]
- bko 11y ago
  Fair point. > Mr. Yassky (taxi commissioner) said that in lieu of demanding advertising revenue, the city hoped that the additional income for vendors might encourage them to lower the fees they charge to cab owners, which could in turn reduce the pressure to increase fares. “I don’t think advertising is so much an opportunity for city revenue,” he said, “so much as an opportunity to keep fares down.” Looks like NYC government isn't really benefiting but (presumably) bearing the cost of fitting these TVs. Government officials always associate price with cost rather than price with demand. http://www.nytimes.com/2010/12/13/nyregion/13taxitv.html http://www.nytimes.com/2010/12/13/nyregion/13taxitv.html

harmegido 11y ago

Just for future reference, you are using the term externality incorrectly. The word you seem to want to be using in its place is "competitor." Externality has a very specific, economics meaning: https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality

vtlynch 11y ago

All markets are artificial.