The Tyranny of Taxi Medallions
Apart from all the obvious externalities of cab driving operations, the extremely high probability of fraud, and the fact that policing cabs is extraordinarily expensive, there's another problem a lot of these analyses miss about why cabs are regulated the way they are.In many large cities, the taxi system is a fundamental component of the transport infrastructure. There are locations in most cities that are not efficiently or safely reachable via bus. Visitors to cities also tend to need point-to-point transit; it takes some know-how and a lot of flexibility to get from an airport to a business meeting in a near suburb, for instance. Taxicabs are effectively a privatized component of metro transport systems.Cities therefore have a powerful interest in making sure that whatever else happens, there is a strata of taxi service available to all residents of the city at some predictable rate.