I remember a time (November 9th, 2009) where I was picking up somebody from JFK airport. I had arrived there solely by rail -- not a small feat considering the 2-hour commute and multiple transfers -- and resolved that I would not be returning home with my guest via the same method. The plan was to take a taxi home, paying in cash. Immediately after we left the terminal, we were practically ambushed by a livery cab driver offering to jet us home for $45. I didn't know it at the time, but that was approximately $20 more than it would have cost to take a yellow cab to our destination. Not in the mood for frugality (and having anticipated spending that kind of cash anyway), I accepted, and we got into the car. Overall, it was a swift, uneventful ride.
Some time after I got home, I recounted the experience to my mother, who hissed that I should not have taken a ride from a livery cab, and that I certainly shouldn't tell my stepfather, a veteran taxi driver. I remember her saying that livery cab drivers "take food from [my] mouth," referencing the illegal competition they pose to yellow cab drivers like my stepfather. I didn't think very much of it at the time.
About a week ago, Governor Andrew Cuomo (who is a very popular executive, I should note) signed a bill that would allow for livery cabs to be hailed on the street, and increase the number of yellow cabs (medallions) by 2,000. My stepfather was apoplectic. This bill harms him in two ways:
- It increases competition, leading to fewer fares per shift.
- It drastically decreases the value of his medallion, a prized asset nominally valued around 600K at the least.
On both counts, he has cause to be upset. However, his anguish stems not from any governing principles that reflect the service he provides, but from his particular economic interests being attacked.
The state (city, in this case), in association with powerful investors, attempts to protect people like my stepfather from rabid competition they would otherwise experience. Any attempt to break their monopoly is understandably met by stalwart reaction. Thus the very visceral animosity between yellow cabs and livery cabs. Medallion owners are a protected class who have a vested interest in keeping the supply of taxis low. The city, responding to both public demand and promises of greater revenue (mostly from projected, probably optimistic medallion sales), is accordingly going to increase supply. It hurts my stepfather and other non-corporate medallions as well as corporate medallions, but that's the name of the game. Outsiders would say the system which benefits my stepfather is corrupt, and I am inclined to agree on principle.
However, this is not to say that my stepfather is lazy or coddled. Nothing could be further from the truth, as he is by far the single hardest worker I have ever known, and likely ever will know. He purchased his medallion many years ago, when it was comparatively cheap, and held onto it like any other investment. Unlike the majority of medallion owners, my stepfather actually does the labor himself, often working 18-hour days and, in the past, even sleeping in his cab. Like most such personalities, my stepfather tends to lean Republican, and watches only Fox News. Given the venom that that network spews toward public employees, this is the ultimate irony -- my stepfather is one of those protected public workers, and doesn't even realize it.
His asset is a car given special value only by the state, and is otherwise no different than the livery cabs. The medallion is an artificial commodity much like real estate during the housing boom. Both staked their value on the state distorting market fundamentals. Clearly, the demand for cab services in the outer boroughs outstrips the supply, but the city's cap on cab supply (buttressed by an entrenched investment class) has led to a black market of livery cabs; some of which happen to engage in price gouging as a result of minimal competition.
Good, well-meaning people can work for monopolies (good or not, I count myself among them), and good people can break them as well. It forces one to consider what side they're on in the profession they've chosen. Are they on the side of choice, or are they on the side of institution? Democracy, always on the lurch, tends to favor the former.
This is a great example of government interference with a free market...
ReplyDeleteA great analogy can be made to pain meds... Going to a doctor to get pain meds makes you spend money at the hospital or doctor's office to get a prescription for legal pain meds at a relatively less expensive price compared to the illegal pain meds off the street where the price is artificially higher because it is a black market.
Good analysis Drew