Who owns the medallions? I'd bet that in general it isn't the cabbies who own them. It might be some ex-cabbies who now own cab companies, but I doubt that more than a small minority of working cabbies own them. I'm not a Noo Yawker, BTW, so I'd like to know if this hypothesis is accurate. (Here in Ellay, there are no crusing cabs to speak of, or to hail.) If my hypothesis is totally wrong, stop reading here.
If it is right, abolishing the medaillions (driving the price to zero) would impose a major capital loss on the cab companies. They would then try to get the cabbies to pay for this capital loss by lowering the fraction of the fare (the wage) that goes to the drivers. The ability of drivers to drive cabs (as opposed to jitneys) without going through a medallion-owing cab company would also drive down the wage. But it would also drive down the fares, so that the cab companies would lose. (This simply repeats what I said about the capital losses.) The _cab industry_ would lose, but wouldn't there be a floor on how far down wages would go? If the current medallion-borrowing cabbies are working their butts off to pay for their use, it's hard to imagine that they could be pushed much further down. They couldn't go much lower than the current jitney drivers.
If Rudy is so opposed to rude cabbies, wouldn't the problem become worse with unregulated entry? With the medallions, I presume, there are some regulations imposed by the companies and the city. But with a free-for-all of competition, how could the city punish a cabbie for being rude? how could a company benefit from advertising "our cabs are clean and our drivers are polite"? Low wages might prevent cabbies from keeping their cabs in shape.
Enquiring minds want to know.
Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html "The only trouble with capitalism is capitalists. They're too damned greedy." -- Herbert Hoover