Medallions were first implemented based on the idea that medallion regulations would improve things for both taxi drivers and taxi riders. Limited medallions meant drivers would make more, and riders would be safer as the driver would be known by the city and invested in the medallion.
Instead, they had the opposite effect as taxi conglomerates quickly emerged and cornered the medallion market due to economies of scale. Individual drivers could not compete with medallions priced based on 24-hour usage.
Most drivers became low-paid employees of these conglomerates. Users suffer because drivers no longer had much incentive to keep the shared company cars clean. The conglomerates lobbied to reduce the supply of medallions to protect their now sizable investment and eliminate potential competition.
In this Uber/Lyft case we are also adding regulations which make barrier to entry higher for any incumbent companies. The complication of having thousands of salaried employees is more than most startups can handle, so we are basically cementing the established players Uber/Lyft as the only options.
Instead, they had the opposite effect as taxi conglomerates quickly emerged and cornered the medallion market due to economies of scale. Individual drivers could not compete with medallions priced based on 24-hour usage.
Most drivers became low-paid employees of these conglomerates. Users suffer because drivers no longer had much incentive to keep the shared company cars clean. The conglomerates lobbied to reduce the supply of medallions to protect their now sizable investment and eliminate potential competition.
In this Uber/Lyft case we are also adding regulations which make barrier to entry higher for any incumbent companies. The complication of having thousands of salaried employees is more than most startups can handle, so we are basically cementing the established players Uber/Lyft as the only options.