NYC taxi meter and options pricing
&gt;Going through more than 10 years worth of NYC taxi data, I analyse how the antiquated meter system impacts the livelihood of NYC cabbies by drawing an analogy with stock options trading. Interestingly, this approach allows us to show that drivers have progressively been worse-off, independently of competition from Uber.<p>The author ignores significant issues with the data.  These include time of day, where time-specific surcharges increase the fare independent of distance or time spent in the taxi.  The author also ignores the shift system for fleet cabs.  As a general rule, fleet cabs operate two twelve hour shifts, with the day shift generally being <i>less</i> lucrative than the night shift.  What&#x27;s more, the author ignores the fact that Thursday evening through Sunday morning are significantly more lucrative than the rest of the week.<p>If you ignore the above and just average everything together, you&#x27;ll miss important differentiators in revenue.<p>I get that the author normalized the data to enable  his analysis of revenue.  But given that he ignores important variables makes the results suspect.<p>Many drivers <i>only</i> drive at night.  Many drivers <i>only</i> drive during the day.  Some drivers <i>only</i> drive Thursday-Sunday.  Some only drive Monday-Friday.<p>So a Monday-Friday day shift driver will generate less revenue than an Monday-Friday night shift driver.  Similarly, a Wednesday-Sunday day shift driver will generate less revenue than a night shift driver.<p>And those who work Wednesday-Sunday will generate more revenue than those who work Monday-Friday.<p>And the author focuses only on the revenue side and ignores the costs.  The last time I checked, a day shift lease is ~$95+full tank of gas, while a night shift lease is ~$120+full tank of gas, with a premium charged Thursday-Sunday.<p>However, there are <i>other</i> kinds of leases as well.  A weekly lease, generally shared by two drivers, will run ~$900-$1000 split between them.  And a monthly lease can be even more cost-effective.<p>And those leases include maintenance on the vehicle, insurance and vehicle storage.<p>While it&#x27;s interesting to see the analysis of how the fee structure generates revenue, the author ignores a whole raft of other variables which directly impact on revenue generation.<p>Lastly, the author asserts that it&#x27;s the &quot;antiquated&quot; taxi meter fee structure that has caused drivers to be &quot;progressively worse-off.&quot;<p>I don&#x27;t see how he was able to draw that conclusion from the data presented.<p>Edit: Fixed typos and edited for clarity