Tuesday, September 4, 2012

NYC Taxi Oligarchs Get Another Fare Hike

Owning a license to operate a taxi in New York City is so lucrative that wannabe taxi operators are willing to pay $1 million to acquire a license/medallion. The corrupt NYC government severely limits the number of taxis on the streets of NYC and allows regular fare hikes, which  boost the value of the license/medallion.

The latest taxi fare hike will kick in today.

Taxi riders will begin to see a 17 percent increase on their cab fares, reports NyPo,

Under the new fares, passengers will be charged 50 cents for each fifth of a mile and every minute cabs are stuck in traffic — up from the current 40 cents for each.

The average fare will rise from nearly $10 to almost $12. Rides from Kennedy Airport also will increase, from $45 to $52.

The new fare schedule, approved by the Taxi and Limousine Commission in July, will begin to be implemented today.

TLC propaganda says the cabbies will earn more:

The new fares will grant cabbies their first raise since 2006. Hacks now stand to make an average of $160 for a 12-hour shift, up from the current $130, according to the TLC.
But long-term drivers understand it's just propaganda. The market for drivers, themselves, is very competitive, and so the fare hikes rnd up in the pockets of the oligarch taxi owners:

...driver Frank Okoli, 44, is concerned that the cost of leasing cabs will go up as a result of the new fares — and that his supposed pay raise will “not amount to anything.” 
“As soon as the rates goes up...the companies increase their [lease] rates,” said Okoli, who has driven a cab for the past 11 years... “For most of the cab drivers, it doesn’t make no difference,” he added.
If the TLC did not protect the cab owner oligarchs, there would be many more cabs on the streets of NYC, fares would be lower and the cabs would be much bigger and more comfortable, but because the TLC suffocates competition none of this goes on and the rich cab owners get richer.


  1. The counter argument might be...more cabs will make traffic worse. This is unfair to private vehicle owners who have to drive on the same roads. What is the free-market solution to protecting them? Profit-seekers and non-profit seekers competing for the same scarce resource?

    1. Who cares what the counter argument is? Free markets don't exist to make things "fair." The free market doesn't exist to protect people from traffic. Cheaper cab fairs might mean that more people take cabs which means fewer people will be driving their cars. A cab has a driver that is always looking to be on the road so he can make money transporting people from point A to point B. If you don't take a cab, you either take the subway, you walk or you drive your own vehicle or drive with someone else. People who drive themselves often drive only themselves, and then they park their cars somewhere. Cab drivers don't want to have their cars parked for more than a few minutes, idle time means they are not getting paid. Maybe there would be more traffic, but people would be able to get to where they need to go more effectively. And if traffic gets too congested, they will find other ways to limit their time on the roads. This is something that the markets should sort out. And restricting cabs is a market distortion that results in a lot of waste and inefficiency.

    2. Why should someone riding in a cab as a passenger have less rights than someone who owns a car? It's not like the taxis would be going around empty all day taking up space for no reason, drivers would quit and seek other employment if that were the case.

    3. The free market doesn't account for drivers using the same roads who aren't trying to make money. They're not trying to compete. They just get screwed with more cabs.