-----Original Message----- From: Doug Henwood <dhenwood at panix.com> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com>
>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.
We are not talking about big capital like airlines; we are talking about the possibility of owner-entrepreneurs taxi drivers. You don't have to love the petit-bougeoisie to be skeptical of a system that uses a $250,000 per car capital threshhold to enter a marketplace that should require at most a $15,000 per car capital threshhold.
Using capital ownership on that scale as the means to restrict entry is not progressive. Owners of those medallions can replace the workers, so the medallion system doesn't even necessarily benefit the workers directly, only indirectly.
Without question, more competition would lower fares and cab revenues. But would it lower wages? If revenues dropped less than the premium owners of the medallions demand from workers to use the cabs, the taxi drivers would come out ahead.
A progressive system of taxi regulation might use training and licensing rules (ideally backed by union contract) to restrict entry to the marketplace, but I am unconvinced that the medallion system is in any sense a progressive substitute.
--Nathan Newman