taxi! taxi!

Doug Henwood dhenwood at panix.com
Fri May 15 09:37:46 PDT 1998


Nathan Newman wrote:


>Given the $250,000 cost of a cabbie medalion, it is not clear to me that
>eliminating that monopoly barrier to entry into the cab business is the worst
>thing in the world for workers. Yes, more cabs will depress revenues, but if
>cabbies don't have to spend half their time paying the mortgage for their
>leased
>medalions on top of the cost of the cab itself, might they not come out ahead?
>
>What are the economics of this for cabbies? If a guy with a $4000 used
>car can
>enter the marketplace, won't that be better for a lot of these folks than
>automatically having to slave for someone else who can afford the $250,000
>medalion?

C'mon, you know the answer to this. Letting in more players with such a low barrier to entry will intensify competition and lower wages. Just look at the U.S. airline industry after dereg.

Doug



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