Komanoff: Times Exposé Understated the Damage to Yellow Cab Industry by Uber and Lyft

Ubers and yellows — always competing. Photo: Max Pixel
Ubers and yellows — always competing. Photo: Max Pixel

The New York Times’s exhaustive series about the horrifying financial plight of yellow taxicab drivers may actually have understated the fiscal crisis — and, in doing so, let Uber and Lyft off the hook, a cab industry expert told Streetsblog.

In the Times series (part 1 and part 2), writer Brian Rosenthal reported, “since Uber entered New York in 2011, yellow cab revenue has decreased by about 10 percent per cab, a significant bite for low-earning drivers but a small drop compared with medallion values, which initially rose and then fell by 90 percent.” But taxi industry expert Charles Komanoff, a frequent Streetsblog contributor, said the drop in revenues is actually 36 percent.

This is not to say that the Times report on the larger issue of medallion values is inaccurate — but simply that Rosenthal’s 10 percent figure understates the disastrous role Uber and Lyft have had in undermining cab drivers’ income.

“The difference between a 10-percent taxicab revenue decrease and a 36-percent taxicab revenue decrease is extremely consequential,” Komanoff wrote in a letter to Rosenthal (shared with Streetsblog) shortly after publication of his stories on May 19-20. “The lower figure could be consistent with a narrative that largely attributes the extreme financial distress of yellow cab drivers and medallion owners to the predatory lending you described.”

How the Times covered the story.
How the Times covered the story.

But in lowballing the drop in revenue, Komanoff continued, Rosenthal missed “a broader narrative that places the cannibalization of the taxi industry by Uber and Lyft as a destructive force that has been every bit as impactful as the predatory lending depicted in your series.”

Here’s how Komanoff crunched the numbers — and what Rosenthal may have failed to consider.

Since 2011, cab drivers have been forced to collect two surcharges on fares: a 30-cent “taxicab improvement fund” (TIF) surcharge on all fares that went into effect in 2015, and the more recent $2.50 “congestion” surcharge that took effect in early February after several rounds of court battles and is now collected on an estimated 90 percent of yellow cab trips.

Those surcharges are collected by yellow cabbies and are included in the Taxi & Limousine Commission’s farebox figures. But they aren’t revenue for them, as the TIF money goes to the city and the congestion surcharge money is passed to the state.

Rosenthal and Komanoff agree that in March, 2011, daily farebox revenue for yellow cabbies was $5,717,207. And both agree that by March, 2019, that number had dropped to $4,289,036.

But Rosenthal didn’t remove the surcharges from the farebox revenue for March, 2019. Had he done so, Komanoff wrote, he would have realized that cabbies had only made $3,644,820 in actual revenue — not just what the farebox recorded, but what they actually could put in their pocket. That figure is 36.2 percent less than yellow cabbies’ daily take in 2011.

And that doesn’t even take into account inflation, which has cut the value of a 2011 dollar by 12.5 percent. When that decline is factored in, “real” revenues across the entire yellow taxi industry have dropped 44 percent since Uber and Lyft showed up.

To be fair, Rosenthal’s piece had some wiggle room, as he reported that revenues had dropped by about 10 percent “per cab.” Indeed, in March, 2011, there were 12,852 yellow cabs picking up fares. By March, 2019, that number had dropped to 10,814. If you cut the numbers the way Rosenthal did, you come up with a revenue drop of roughly 10 percent per cab. (Though even under that scenario, he should have removed the surcharges, which would have yielded a 24-percent per cab revenue drop.)

In any event, Komanoff argues against a per-cab methodology for one simple reason: It again reduces the impact of Uber and Lyft, which caused more and more yellow cabbies to simply give up. (And, lest we forget, Uber and Lyft also add to congestion.)

“There is no starker evidence of this devastation [of the finances of yellow cabbies] than the withdrawal from daily service of some 2,000 taxicabs,” said Komanoff, who has consulted for the medallion industry, but is not currently. “To calculate per-taxicab revenue without those mothballed taxicabs … is to whitewash this destruction. That would be akin to measuring the effect of famine on a herd of livestock by measuring weight loss only among the survivors while ignoring the sizeable fraction — 16 percent in this case — of those who perished.”

But Rosenthal disagrees. The reporter told Streetsblog that he will soon publish a reply of sorts on the revenue reduction, but was eager to share a preview with Streetsblog readers.

“Our feeling on this is simple: A cab that is not on the road does not make any money, just like a hot dog vendor who is home sick does not make any money,” he said. “Taxi industry leaders say that Uber/Lyft is to blame for those cabs being off the road, but we found, through months of painstaking research, including interviews with 450 people and an analysis of thousands of documents, that is simply not true. At least 950 medallion owners have gone bankrupt because their lenders have come after them, and their cabs are now off the road, not making any money.”

And Rosenthal concluded with a larger point:

“Whether the [revenue decline] number is 10 percent, or 15 percent, it does not change that the taxi medallion market was inflated, exploitative, unstable and unsustainable long before Uber arrived,” he said. “Ride-hailing may very well have been what tipped it over. But it was clearly ready to burst before that.”

But getting the figures right is crucial, Komanoff told Streetsblog, because the legislature has directed the new MTA congestion pricing board to review the congestion surcharges for taxicabs and app-based vehicles.

“If not just predatory lending, but predatory competition from the app-based companies has decimated the yellow cab sector, the panel can set things right by revising the surcharges to include additional levies on the time that Ubers and Lyfts spend trawling for fares in Manhattan,” Komanoff said.

Charles Komanoff Letter to Brian Rosenthal – May 22, 2019 by Gersh Kuntzman on Scribd

  • John Smith

    Acknowledging this problem would mean acknowledging that the medallion system itself was misguided, it’s continued existence for eight decades was harmful, and it’s abuse and eventual collapse was an utter disaster. The city is to blame here for setting up a cartel, charging exorbitant fees to join the cartel, and then allowing it to collapse when it become politically palatable to do so.

  • John Smith

    Have yet to read a single article which correctly states the surcharges on yellows. It’s .30 for the TIF PLUS a 50 MTA tax in addition to the new $2.50. The initial drop in a yellow cab is now $2.50 plus $3.30.

  • John Smith

    It was in no way misguided. It put an extremely necessary limit on yellow cab numbers in NYC and made it a viable job for a very long time. Please retire the absurd ‘cartel’ spiel.

  • John Smith

    Restricting supply to keep prices artificially high is pretty much the definition of misguided. What problem were they trying to solve that couldn’t be solved by other means? Should we sell medallions so people can become programmers? How about medallions to work at a publisher, or a fashion house, or a bank?

    Just because you don’t like the word “cartel” doesn’t make it incorrect.

  • John Smith

    Supply was not restricted to keep prices artificially high. In fact, yellow cab prices have been some of the lowest in the world for a long time. It was restricted because pre-Medallions NYC was flooded with taxis which resulted in desperate drivers who couldn’t make a living making a living and badly broken down cars. The cartel non-argument is pure ignorance.

  • Daphna

    Change happens. New providers and new technologies are invented. Industries and jobs are disrupted. When a retailer with better value for their products comes along, customers migrate there from the old stores they had previously patronized. In this case, better ride options became available and customers, as well as drivers, chose the new service. This is natural.

  • John Smith

    Uber is allowed to do virtual street hails without paying a cent for a Medallion and with no limit on car numbers. Their business ‘model’ is to lose 2 or 3 Billion dollars of VC every single year subsidizing rides to keep prices artificially low and flooding cities with cars. This story has nothing to do with ‘innovation’ and everything to do with lawlessness and vulture capitalism. They could have just put apps in cabs. This was all done to intentionally crush the yellow cab business.

  • Andrew

    Do I need to change my name to participate in this discussion?

  • Larry Fisher

    There is more here than what meets the eye. Reporter Rosenthal did a good job in his effort to investigate the taxi industry, but sadly, his point of view parrots that of former TLC chair Joshi. The lenders, not Uber, were to blame. If that’s the case, why was the lenders delinquency and losses prior to 2014 microscopic, and only 3 years later, many of those same lenders experienced losses and were conserved by the state?

  • Sassojr

    “You miss 100% of the shots you don’t take” -John Smith

    -John Smith

  • John Smith

    So it wasn’t instituted to keep prices artificially high, it was instituted to limit the number of taxis…and therefore increase prices beyond what they would be with free entry and exit of market participants?

    The medallion system was a stupid Depression-era attempt to cartelize the taxi industry and it worked spectacularly. Bad service was the rule, the public was price gouged and tens of thousands of medallion owners got rich off of an artificially capped (but tradable on a secondary market) supply of them. All of that went on for eighty years – I hope it was worth it.

  • 6SJ7

    I guess consumers prefer the clean air-conditioned sedans of Uber and Lyft to the generally filthy sometimes air-conditioned NYC taxis.

  • Linda

    Like to see NYTimes reply.

  • Linda

    Agree with John

  • cjstephens

    … or the taxi industry could have developed apps, adjusted prices, and provided better customer service in order to compete. But they didn’t, because they were protected politically. No sympathy from me or thousands of others who are no longer a captive market.

  • ohmymy

    Amazing this article left the MTA tax out.

  • ohmymy

    You’re woefully ignorant of the history of medallions. With no limit on cabs, the violence was abhorrent as hordes of drivers physically attacked each as they fought for limited customers. The city has now capped Uber and Lyft for similar reasons (limiting congestion and pollution, etc) or did they did do that just to to create another cartel? An easy solution to cap the rising price? Outlaw the use of the medallion as collateral for the loan as they do in Conn. But then NYC won’t be able to fleece drivers by selling what they misleading billed as permits with exclusive street hailing rights for exorbitant prices just to fill budget gaps.

  • The problem wasn’t the issuance of medallions in itself. The problem was allowing them to be sold.

    A medallion should have been treated solely as a professional licence issued to a particular individual and usable only by that individual. The very idea of a market for these things is absurd.

  • justjeffjack

    If that’s the case, why was the lenders delinquency and losses prior to 2014 microscopic, and only 3 years later, many of those same lenders experienced losses and were conserved by the state?

    Seriously? This is explained at length in the articles. While Uber may have been the catalyst that finally popped the medallion-pricing bubble — thus resulting in the subsequent delinquency and losses — all of the industry experts interviewed by The Times said it would’ve eventually burst regardless, thus resulting in largely similar delinquency and losses.

    So yes: the lenders really were to blame here, not Uber (or Lyft).

  • justjeffjack

    Uber is allowed to do virtual street hails without paying a cent for a Medallion and with no limit on car numbers.

    This is false. Uber and Lyft may not have a medallion system — which btw is a good thing, as The Times’s article makes amply clear — but they each pay $50,000 per year per vehicle for the privilege of operating on NYC streets. These rates are roughly on par with what livery companies, which also lack medallions, have been paying the TLC for decades.

    Also, in case you’ve been in a coma for the past year, the city capped the total number of allowable ride-hail vehicles/drivers last fall.

    This story has nothing to do with ‘innovation’ and everything to do with lawlessness and vulture capitalism.

    I completely agree … but probably not in the context you thought: this story has virtually nothing to do with Uber or Lyft, period, despite Streetsblog’s attempt to make it about them (yet again). Rather, it’s specific to “vulture capitalism” as practiced by various entities within the NYC taxi industry, whose business practices make Uber & Lyft look like saints in comparison. The taxi-medallion bubble began in 2002, nearly a decade before Uber even entered the market (and five years before the first smartphones were even introduced). Medallion prices peaked at $1.3 million, almost entirely due to predatory lending practices and the city’s abject failure to regulate the secondary medallion-sales market in any meaningful way.

    As for “lawlessness”: Uber has always operated under strict TLC oversight, and while it may have entered other U.S. markets without prior regulatory approval, that was not the case in NYC. The actual lawlessness here lies with the various medallion brokers and predatory lenders who likely violated a host of consumer-protection laws in granting cabbies loans under usurious terms — hence the reason the city attorney and state AG almost immediately announced investigations into all of it the day after The Times’s first article was published.

  • justjeffjack

    They could have just put apps in cabs.

    This is also false. A company called Verifone has had a monopoly on taxi meters for decades, thanks primarily to its exceedingly “generous” contributions to the campaigns of various local officials. The TLC’s operating agreement with Verifone precluded NYC cabbies from using any sort of pricing system not wholly designed and run by Verifone itself.

    This was all done to intentionally crush the yellow cab business.

    About a century ago the horse-drawn carriage industry was destroyed by the advent of cabbies driving “horseless carriages,” a.k.a. cars. Do you think that was done solely to “crush” their business, or was it simply an acknowledgement that “horseless carriages” were the proverbial better mousetrap?

    The demise of the taxi industry is primarily its own doing, despite it being extremely easy to instead try and pin the blame on “soulless Silicon Valley billionaires” who chose to “crush” it. And yes, Uber in particular is villainous to the point of caricature. “Adapt or die” is a core element of Darwinian philosophy. Instead of trying to adapt to the entrance of ride-hail services into its market, the taxi industry — and this is true in nearly every city, not just New York — instead did everything they could think of to block or obstruct Uber and Lyft. They didn’t improve their godawful service offerings. They didn’t clean up their vehicles (either literally or metaphorically). They didn’t petition the city to loosen the medallion cap or increase the number of cars on the street — quite the opposite, actually. (It’s not explicitly outlined in The Times’s story, but the efforts of well-connected “corporate” medallion owners are the reason why the total number of medallions in the city actually fell substantially over the past 60 years, not the other way around.) Verifone made no efforts towards developing the types of apps Uber & Lyft have that incorporate surge pricing, which by itself would’ve fixed many of the problems incumbent local taxi industries have had nationwide.

    In other words, taxis failed to adapt even to a negligible extent, and as a result are dying — and no, you can’t keep on blaming Uber’s and Lyft’s admitted VC subsidies for this problem for much longer (all the more so in NYC now that they’ve had to raise fares thanks to its new minimum wage for drivers as well as the congestion charge). They dug their own graves, and will soon lay in them.

  • justjeffjack

    Why is this relevant? It’s stating the obvious that a) NYC’s entire public transportation system is a nightmare, and needs tens of billions of dollars’ worth of maintenance work just to correct its known problems; and b) it’s vastly better as a general matter for people to use public transportation to get around instead of individual automobiles, which both clog roads and serve as one of the world’s largest sources of hazardous air emissions.

    It is 100% reasonable for the city to impose TIFs and congestion charges on all forms of private-sector ground transportation, whether it’s taxis, livery cars, SuperShuttles or Ubers.

  • John Smith

    So we need to cap cabs and ride share vehicles because if we don’t we’ll have Uber and Lyft drivers murdering each other in the streets? Patently absurd.

  • justjeffjack

    It put an extremely necessary limit on yellow cab numbers in NYC and made it a viable job for a very long time.

    While capping the number of cabs in any city, NYC or otherwise, is a sensible idea, there absolutely was a cartel comprised of the biggest “corporate” medallion owners as well as the shady lenders who sold secondary-market medallions to individual cabbies on unconscionable terms. As a direct result of this cartel’s actions, the average price of a taxi medallion rose more than 1,000% between 2002 and 2014, from around $100,000 to $1.3 million. Even though it was patently obvious before 2002 that the city needed vastly more taxis on the roads, the Bloomberg administration only sold off a comparative trickle of newly introduced medallions.

    Further, the taxi cartel quite explicitly worked to defeat Bloomberg’s Boro Taxi initiative — solely because it was worried about its own bottom line, and despite the reality that yellow cabs haven’t generally been available outside of Manhattan since at least the 1960s. And guess who helped enable the cartel’s cronyism? None other than Bill de Blasio, back when he was the city’s ostensible “public advocate”! It’s linked in the second NYT piece, but here’s a story about the considerable amount of donations he received from Big Taxi during his 2012 campaign — and his subsequent cronyist bidding on their behalf to attempt to defeat Boro Taxis on total-BS grounds.

  • justjeffjack

    You’re woefully ignorant of the history of medallions. With no limit on cabs, the violence was abhorrent as hordes of drivers physically attacked each as they fought for limited customers.

    This is a bit of an exaggeration (yes, there were a number of fights between cabbies for fares before medallions existed, but it wasn’t exactly a routine problem), but yes: establishing limits on the number of available cabs — and requiring them to all adhere to standardized pricing, meters and trade dress — was necessary for a variety of reasons, this being one of them.

    An easy solution to cap the rising price? Outlaw the use of the medallion as collateral for the loan as they do in Conn.

    Actually, the best solution would be to eliminate medallions completely — like all but a tiny handful of cities have done — and replace them with a standard annual-permitting system. This would prevent medallions from being used for any nefarious purposes, and also keep them from falling into the hands of “corporate” owners like Trump fixer Michael Cohen.

    That said, the city would likely have no choice but to figure out some means of compensating existing medallion owners for their loss of a tangible asset, even if it’s declined substantially in value over the past five years. While it got little coverage at the time, Uber & Lyft offered to create a $200 million fund for precisely this purpose back when the city was still deliberating on whether to institute a ride-hail minimum wage. Although this offer was quite obviously self-serving, it was also rejected out-of-hand by the de Blasio administration without even reading the proposal in full.

    While this wasn’t as big as de Blasio’s screw-up last year with the Amazon debacle, it was pretty close.

  • Komanoff

    The opposite. The MTA tax on yellows was unchanged between the “before” & “after” periods (2011 & 2019) used by the NYT reporter in his (faulty) comparison of driver earnings. The MTA tax would have washed out of the comparison, so no adjustment needed. (This goes to John Smith’s first comment as well.)

  • justjeffjack

    While it’s rather obvious at this point that Streetsblog harbors a huge amount of animus towards Uber in particular — which isn’t exactly a secret — they’re willfully ignoring the core element of The Times’s stories: this story really isn’t about them (or Lyft). The fact that ridesharing services have decimated the taxi industry nationwide isn’t even remotely novel news, and it’s widely acknowledged as fact. Even Uber and Lyft don’t deny it.

    What the NYT’s stories are about are the frankly nauseating practices within the taxi industry itself — before Uber even entered the picture — that both directly created the medallion pricing bubble that peaked at a batsh*t-crazy $1.3 million in 2014, and the previously unknown extent to which shady lenders and “medallion brokers” were complicit in these schemes that proved ruinous to literal thousands of NYC taxi drivers, in some cases fatally.

    I applaud The Times for the type of in-depth, extremely detailed reporting that revealed the truth behind a painful reality, and exposed the machinations of NYC’s deeply corrupt taxi cartel for what it truly is. I’m glad to hear their journalist is planning follow-up pieces on the subject as well, particularly in response to this Komanoff person who may as well be defending Bernie Madoff or Donald Trump in his defense of the deeply, inherently corrupt taxi-medallion world — one in which numerous elected officials, past and present, are complicit. (Mayors Giuliani, Bloomberg and de Blasio are each cited by name, but I suspect the corruption goes far deeper than that – particularly within the ranks of the TLC.)

    At the same time I’m frankly stunned that Streetsblog, an online publication I generally admire, is effectively giving the taxi industry a “pass” in its continued tirade against Uber. I think every American with even passing knowledge of the news knows about Uber’s many sins at this point, and in particular I find its driver-compensation practices to be entirely unconscionable, but The Times’s series shows that there are far greater evils out there, and many of them were participants in NYC’s disastrous medallion scheme, which should’ve been eliminated in its entirety and replaced with an annual permitting system (as is the case nearly everywhere else in America) decades ago.

  • John Smith

    Nothing in your long response is even remotely true. I’d waste my time picking it apart but I’ve already posted the facts of the situation. Feel free to re-read.

  • John Smith

    There have been eight suicides. Hence the cap and mandated base pay. Uber would not even exist if it were not handed 10 Billion in new VC every few years. The entire model is false, all rides are roughly 50% subsidized.

  • John Smith

    The Medallion system is and was an intelligent solution to massive oversupply.

  • John Smith

    Give me a break. There’s no legitimate ‘competition’ here. Uber is allowed to pay nothing and claim they ‘compete’ with taxis who paid for all of it. Apply that ‘business model’ to any industry and those who pay nothing will wave a shiny bauble in your face too.

  • cjstephens

    I’m not saying that Uber and Lyft aren’t run by horrible people who treat their drivers badly, but that doesn’t distinguish them from anyone else in this narrative. At the end of the day, the customers got sick of putting up with lousy service from politically protected hacks. The newcomers provided a better service, and the dinosaur taxi industry refused to adapt.

  • @Daphna – Vague remarks are made in the passive voice. Ill-formed conclusions are alluded to.

  • @cjstephens – The taxi industry did develop apps, Uber started off by copying Cabulous. Adjusting prices to match a VC-fueled predatory model designed to wipe themselves out is not a tenable move, though.

  • cjstephens

    To steal from “The Social Network”, if the taxi industry had been the inventor of Uber, then they would have been the inventor of Uber. And, sure, the VC funding makes for a model that’s not sustainable, but if you think that millions of people turned their backs on cabs just because of the prices, you’re wrong. You also need to look outside of NYC, where getting a cab isn’t a matter of standing on an avenue with your arm raised. Ride-hailing apps have been a game-changer in other cities, opening up a whole new world for people who didn’t have easy access to transportation before.

  • cjstephens

    Uber is one of the many blind spots that Streetsblog has. It’s not quite as deep as their TDS, but it is a longer-standing prejudice. Not much point in trying to change their minds with, you know, facts here.

  • John Smith

    And their blood is on the hands of the TLC and those who worked to perpetuate the medallion system, not Uber and Lyft.

  • John Smith

    As opposed to congestion pricing or letting low compensation drive suppliers out of the market. What other professions and jobs should get a medallion system?

  • ohmymy

    The only patent you have is on absurd retorts .Keep believing that medallions were instituted to create a cartel. Now that’s absurd.

  • John Smith

    “New York City’s Board of Aldermen (the predecessor of the modern New York City Council), responded to calls for reform in 1937 by passing the Haas Act. The Haas Act established the medallion system for New York taxicabs, which is still in use today. The Act’s provisions included a limitation on the number of “medallion” licenses (and therefore, taxicabs) to the number that existed at the time. This number would be further reduced through attrition. As anticipated, this brought the supply of taxicabs closer to the level of service the public demanded, thus calming the fierce competition for customers.”

    That’s right from NYC.gov: http://www.nyc.gov/html/media/totweb/taxioftomorrow_history_regulationandprosperity.html

    Now let’s look at the definition of an economic cartel:

    A cartel is a grouping of producers that work together to protect their interests. Cartels are created when a few large producers decide to co-operate with respect to aspects of their market. Once formed, cartels can fix prices for members, so that competition on price is avoided.


    You’re absurd and the policies you support have caused a lot of human suffering over the past 80+ years, a little introspection won’t kill you, unlike the cabbies who were exploited and spit out by the predatory medallion system.

  • Liam Hanley

    Rosenthal is simply wrong and downplayed the predatory effects of Uber nor does he have the courage to debate someone who knows what they are talking about. I think this story from Rosenthal is driven by a narrative from people like Joshi and TLC who want to wash their hands clean from a problem they enabled (Uber and Predatory lending).

  • Komanoff

    Looks to me that in addition to not reading my letter to The Times’ reporter, you have a hard time keeping two complementary ideas in mind simultaneously.

    Here’s the penultimate graf in my letter:

    This does not in any way lessen the culpability of the predatory lenders whose exploitative practices you uncovered and depicted in your stories. What it does do is demonstrate that the destruction of the yellow taxi franchise by Uber and Lyft has operated alongside those practices to wreak widespread financial ruin on the taxi industry.

    Gersh’s post had the same vibe: predatory lending is repellent, but it’s not the full story in the collapse of the taxi industry. If The Times hadn’t strongly denied that, there would have been no critical letter and no critical story.

  • ohmymy

    “The Act’s provisions included a limitation on the number of “medallion” licenses… thus calming the fierce competition for customers.” Well that undercuts your specious cartel fantasy. Also, bet you didn’t know that roughly 45% of the medallions were dedicated exclusively for “owner” drivers who had to drive their own cabs and whose ownership was limited to one medallion. Also bet you didn’t know that the rest of the medallions were fleet owners who split the fare with drivers akin to how Uber works. This arrangement worked fine for 4 decades, with little to no price increase in the medallions until the 1970’s, when the fleet business turned sour. By law, fleet owners who chose to liquidate had to sell their medallions as two car corporation “mini-fleets” and those buyers became individual stockholder owner drivers. Medallion prices at that time were under $20k. It wasn’t until the mid-1970’s that lenders entered the picture, when Chase, Citibank, Banker’s Trust, Medallion Funding, Symbax and others began providing purchase money loans. Once the lenders entered the picture the price shot up, each lender trying to outdo the other in size of the loan and rate. The liberal financing gave rise to multiple medallion owners (Cohen, the Taxi King, etc) who bought up the mini-fleets since there was no number restriction on stock ownership. Each time the price went up, these investors leveraged their holdings to buy more and more, all facilitated by fast and loose funds from lenders eager to accommodate them. Buyers of individual or fleet medallions weren’t as concerned with the price as they were with the affordable monthly payment. With the Fed interest rates at historic lows the last decade, the banks extended amortization terms from 3-5 years to 30-35 years so that the monthly payment for a $800k loan wasn’t much more than that of a $200k loan. Easy money created our present predicament, not the medallion limit. The point is that there was no intent or desire to create a cartel – medallion numbers were restricted to solve real issues. Remove the cap on how many cars can compete in a limited space for a limited number of passengers and you’ll have deja vu all over again.

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  • John Smith

    What is it you think a cartel is, my friend? Explicitly deducing competition by excluding entrants isn’t a cartel? Do you imagine this reduction of competition had an effect on pricing and service? Get your head out of the sand.

  • ohmymy

    Still clinging to that cartel fallacy, pal? You couldn’t be more wrong. Cartels are a group of entities (think OPEC) banding together to control prices, supply, etc. Taxi medallions, on the other hand are a highly regulated monopoly created by the government for the public’s benefit (think Con Ed). NYC limited the number of medallions to reduce existing violence, congestion, pollution, etc. The TLC regulates all aspects of medallion operations from fares. car choice to safety except for medallion prices which the market sets. Owners follow rules, not make them. Not very cartel like. BTW, being prickly doesn’t make you right.

  • John Smith

    It literally sets hard limits on the number of competitors and sets prices. It’s a cartel, dude.

  • ohmymy

    Ain’t not, buddy. No hard competitor limits with cartels. Further, unlike cartels, the TLC caps fares below what the market will bear to protect the public, not to discourage competition. Not that hard of a concept to grasp.