Donor Matching Funds Announced!

A generous donor has offered to match all contributions dollar-for-dollar for the next $10,000 raised, doubling the impact of your donation and helping us reach our fundraising goal faster.

$12,890 of $60,000 raised

How Cronyism Created New York City’s Taxi Medallion Bubble

by | Oct 10, 2019

How Cronyism Created New York City’s Taxi Medallion Bubble

by | Oct 10, 2019

If one wanted to study the difference between an industry that exists in a very free market and its exact counterpart in a system of extreme government regulation, then you don’t need to look further than the New York City taxi industry. New York City yellow cabs entered government regulation in 1937 when city officials decided that something needed to be done about those enterprising people who were buying automobiles and then driving on city streets, charging passengers fares for where they wanted to go.

During that year, the existing taxi drivers were allowed to apply for medallions, licenses from the city that allowed only them to legally operate their single cars as taxicabs.With financing and interest costs plus vehicle maintenance, it is very possible for it to take at least 30 years to make a profit on a car with a medallion.

In that year, 13,585 medallions were created and issued by the city. In the more than 80 years since that event, with a city population increase of more than one million residents, the City of New York now has 13,587 medallions, a grand addition of two.

In 1937, a medallion cost $10, but 13 years later they were selling for $5,000 each because many owners began to view them as a scarce asset. Individual drivers made up the majority of medallion owners in the beginning, but that number began to decrease as small fleets built up their numbers to become medium-sized. Today, very few drivers own the medallions of the cars they drive, with most leasing them from large fleets for $100 per 12-hour shift.

Read the full article at The Future for Economic Education.

Daniel Kowalski

Daniel Kowalski

View all posts

Our Books

libertarian inst books

Related Articles

Related

‘Extremist Material’

‘Extremist Material’

The South Australian police on the fourth of July arrested a thirteen-year old youth for possession of “extremist material." The content and nature of the material is unknown. The "autistic" boy was held in police custody; bail was set and his mother collected him,...

read more
TGIF: The Populist Trap

TGIF: The Populist Trap

If you care about individual freedom and general prosperity, you'll want to avoid all shades of populism like the plague. It is economic illiteracy proudly proclaimed and writ large. As an alternative to libertarianism, it is bad in its own right—freedom is not on its...

read more

Tariffs Violate Freedom

Debate goes on over who suffers from U.S. tariffs. Biden and Trump, for example, think U.S. tariffs on Chinese goods hurt China, not Americans. This is nonsense. Even if they hurt Chinese producers (who can sell their goods elsewhere), the tariffs still hurt...

read more
Tariffs Are Bipartisan Enemies of Freedom

Tariffs Are Bipartisan Enemies of Freedom

President Joe Biden and former President Donald Trump both portray tariffs as magic wands to create national prosperity. Trump is calling for a 10% across-the-board tariff on imports, while Biden is imposing selective tariffs that he portrays as miracle cures for any...

read more
European Elites Commit to Their Self-Destruction

European Elites Commit to Their Self-Destruction

Much to the dismay of the European elites, the people of Europe appear to be resolutely rejecting the status quo. Right-wing parties are gaining ground in almost every European state as a reaction to the consistent failures of the establishment statists. Economic...

read more

Pin It on Pinterest

Share This