# TAXI Industry contemplates Cutting Fares below Uber/Lyft last ditch survival plan



## uberparadise (Aug 2, 2015)

I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.


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## UberComic (Apr 17, 2014)

Found this rare video of members of several cities' taxi cartels getting together to make such plans to go after Uber and Lyft.


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## RainbowPlate (Jul 12, 2015)




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## THIRDEYE (Jul 2, 2015)

Woot! This means Uber and Lyft will cut rates to $0.50/mile. Good times to come!


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## andaas (May 19, 2015)

The taxi industry is in for a big surprise! Uber and Lyft are ALREADY losing millions, lol.

The sad part of all this is that Uber/Lyft usage, while it would not have encountered quite as exponential growth, would still outpace taxi usage, with identical pricing structures to taxi service in most cities.

Until the taxi industry can provide a fast easy request mechanism and deliver 3-5 minute ride requests in suburban areas like Uber/Lyft typically can, versus the "30-45 minute" taxi pickup requests of the past - Uber and Lyft use will remain the preference for many passengers.


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## UberBlackPr1nce (Dec 28, 2014)

Lol..... tell them to late.... check out the rates of atlanta..... unlike taxi companies who has expenses uber have found an abundant supply of crazies who will run their own vehicles into the ground for 78 cents. If the Taxi companies go that route they wouldn't kill anyone they would however systematically commit suicide and destroy themselves.


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## Old Rocker (Aug 20, 2015)

Uh, if taxi companies get together to set prices, they are in violation of the Sherman Anti-Trust Act.

I don't know the answer to this question. Many cities set taxi rates. Are those max rates, or can taxi companies charge less than the city regulated rate? I would think, at least in the markets where taxi companies act in collusion with corrupt city officials (NYC, Chicago, Boston), they can't.


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## stuber (Jun 30, 2014)

Just make it FREE! Forever! Just download the app! It's EASY. 

My Phoenix friends tell me that UBER has just lowered rates again. This downward spiral will never end until UBER has the whole world hooked on their service like crackheads. Travis is the Heisenberg of the taxi industry.


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## UberNorthStar (Jul 7, 2015)

uberparadis said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.



Yeah, yeah, yeah. I want to see a printed source before I believe any of this crap.

Can you provide a RELIABLE_ PRINTED _SOURCE to back up what you posted?


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## XUberMike (Aug 2, 2015)

I'm trying to figure out what "real" expenses uber has...let's see

Lawyers lots of them
Insurance
Some office expense
Awful CSRS
IT Dept.

WE HAVE ALL THE REAL EXPENSE

Regardless most taxis (not you 2.50 mile can't compete with is service and clean vehicles.


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## ubershiza (Jan 19, 2015)

uberparadise said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.


Where did you get this idea? Most yellow taxis have their rates fixed by the city.


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## stuber (Jun 30, 2014)

UberNorthStar said:


> ​
> Yeah, yeah, yeah. I want to see a printed source before I believe any of this crap.
> 
> Can you provide a RELIABLE_ PRINTED _SOURCE to back up what you posted?


Nothing related to UBER is verifiable. All UBER news is subjective. All UBER PR is adjustable. UBER is the world's biggest game of Wack-a-Mole.


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## Old Rocker (Aug 20, 2015)

XUberMike said:


> I'm trying to figure out what "real" expenses uber has...let's see
> 
> Lawyers lots of them
> Insurance
> ...


In Houston, Uber recently announced they had provided 3.5 million rides since they started. Let's just guess at an average fare of $10, so $2 for Uber, $7m. Plus the $1 Safe Ride fee for another $3.5m.


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## Old Rocker (Aug 20, 2015)

UberNorthStar said:


> ​
> Yeah, yeah, yeah. I want to see a printed source before I believe any of this crap.
> 
> Can you provide a RELIABLE_ PRINTED _SOURCE to back up what you posted?


Even if all the major cab companies met to discuss price fixing, they could be charged for conspiracy to violate Federal anti-trust laws.

Precedent: Apple got together with the major book publishers to set ebook prices. The publishers settled, and Apple went to trial and was found guilty. They had to repay something like $100m to ebook customers.

Opinion: Uber may be bad, but Apple is a horrible company. They have $150b stashed in off shore accounts and give practically nothing to charity. So, the next iThing you buy, just keep in mind that about 20% of the cost is pure super-profit that goes to Ireland and will never be reinvested in the US economy. Sorry, off topic rant.


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## andaas (May 19, 2015)

Old Rocker said:


> I don't know the answer to this question. Many cities set taxi rates. Are those max rates, or can taxi companies charge less than the city regulated rate? I would think, at least in the markets where taxi companies act in collusion with corrupt city officials (NYC, Chicago, Boston), they can't.


I was curious about this myself and did some local research; here in Dallas, the for-hire vehicle rates are a maximum and not a minimum. So taxi companies can reduce rates here at least. Those rates here are:

Initial meter drop $2.25
Each 1/9 mile $0.20
Waiting time $0.45 each 90 seconds
Each additional passenger $2.00 (up to legal vehicle capacity)​
With the above rate structure, Uber would still stomp on the taxi business here even at 80-90% of the current fare structure simply based on the additional passenger rates.


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## 20yearsdriving (Dec 14, 2014)

uberparadise said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.


Last ditch suvival plan?

All I read in this forum is survival advise ?


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## Old Rocker (Aug 20, 2015)

I couldn't find the official Houston fares (404 error), but I checked four cab companies, all of which had the same rates and identical wording, and they mention the fares are 'regulated.'


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## UberNorthStar (Jul 7, 2015)

stuber said:


> Nothing related to UBER is verifiable. All UBER news is subjective. All UBER PR is adjustable. UBER is the world's biggest game of Wack-a-Mole.


I feel the WSJ and the NY Times among others are reliable sources of info on Uber. 
<EDIT: More reliable than one person's report.>


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## Old Rocker (Aug 20, 2015)

UberNorthStar said:


> I feel the WSJ and the NY Times among others are reliable sources of info on Uber.


Just to quibble, the NYT has been busted a couple of times for not fact checking articles, if not for outright fabrication


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## Old Rocker (Aug 20, 2015)

Here, for Houston...

http://www.houstontx.gov/ara/regaffairs/transportation2013/taxistudyguide.pdf

Section 46.31. It states the taxi cab shall comply with and abide by the rates established in the section.

Edit to add: The document also has some great advice on safe operations.


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## andaas (May 19, 2015)

The Houston rates also indicate "...or less" on all of the rate points. So they are also capable of "competing" on price, should they choose to.


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## KofiTaxi (Aug 18, 2015)

uberparadise said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.


I dont buy this. Uber has raised billions of dollars. No taxi company by themselves or in concert with others can take uber on financial. Second, rates are set by the various muncipalities (this is how it is done in new york) not by the taxi cab companies so they cant "cut rates" like you suggest. Third, just b/c the taxi cab companies would want to do that (they wouldnt, and they couldnt but assuming your presmise), the individual drivers couldnt survive and pay their rent. It is not the same as when a sports league or a union goes on strike and union members are given allowances.

So no, I put this in the troll category....


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## Old Rocker (Aug 20, 2015)

andaas said:


> The Houston rates also indicate "...or less" on all of the rate points. So they are also capable of "competing" on price, should they choose to.


I think the 'or less' refers to the mileage. It doesn't say $2.75 or less for the first 1/11th of a mile, but $2.75 for the first 1/11th of a mile or less, meaning if the trip was less than 1/11th of a mile the fare would be $2.75.


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## Old Rocker (Aug 20, 2015)

KofiTaxi said:


> I dont buy this. Uber has raised billions of dollars. No taxi company by themselves or in concert with others can take uber on financial. Second, rates are set by the various muncipalities (this is how it is done in new york) not by the taxi cab companies so they cant "cut rates" like you suggest. Third, just b/c the taxi cab companies would want to do that (they wouldnt, and they couldnt but assuming your presmise), the individual drivers couldnt survive and pay their rent. It is not the same as when a sports league or a union goes on strike and union members are given allowances.
> 
> So no, I put this in the troll category....


Agreed. And since the drivers are ICs, they would make less money than Uber drivers, and quit and drive for Uber.


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## Realityshark (Sep 22, 2014)

Uber will find drivers to give rides for a dime a mile. Uber has no shortage of idiots.


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## Old Rocker (Aug 20, 2015)

I just saw this posted on another thread

http://www.crainsnewyork.com/articl...axi-industry-lawsuit-compete-with-uber-or-die


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## uberparadise (Aug 2, 2015)

KofiTaxi said:


> I dont buy this. Uber has raised billions of dollars. No taxi company by themselves or in concert with others can take uber on financial. Second, rates are set by the various muncipalities (this is how it is done in new york) not by the taxi cab companies so they cant "cut rates" like you suggest. Third, just b/c the taxi cab companies would want to do that (they wouldnt, and they couldnt but assuming your presmise), the individual drivers couldnt survive and pay their rent. It is not the same as when a sports league or a union goes on strike and union members are given allowances.
> 
> So no, I put this in the troll category....


Wrong! Emergency measures are possible. Cab company's can work with local officials to implement new rates. After all it's about giving the customer the best price and or choices remember? Logical response would be go toe to toe with UBER and slash rates. The big cab company's are sitting on millions (after all they had the whole market for decades). They can give the drivers the cars for way less per week or day to compensate the lower revenue. Hey but why not just apply UBER tactic "price cuts equal dramatic increase in ridership".Leverage is where UBER is vulnerable. Lawyer fees, administration fees, cost of capital/ technology infrastructure is big time drag on UBER cash. Investors want more than growth they want profits not losses. UBER has not made a net profit yet!!


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## Lack9133 (Mar 26, 2015)

uberparadise said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. They realize market share is shrinking, but are willing to Nuke the whole business of rideshare. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash. UBER is leveraged and can't survive a long hard fight like this. Cab corporations best move is to undercut UBER and Lyft and force them into a long period of red ink. (Million dollar loses). This strategy could ruin the new upstarts. They are pissed and are ready to fight it out to the bitter end.


I don't think that's really possible. First, taxi company rates are governed by their local public utilities commissions who must approve all rate changes and there are very few companies who own multiple companies across the country.

Secondly, in order for cab companies to do that, they would have to slash their lease rates in order to reflect the lower fare for the drivers. After all, they drivers are their profit center and the last thing they are going to do is run their profit center off by slashing rates and not slashing leases at the same time. Since cab companies are limited in terms of permits, its not like you can offset the lower leases with more drivers to make up the cost differential.

What is happening though is cab companies are installing cell phones as their dispatching center just like Uber and in doing so, they are preparing themselves for the ability to surcharge for their drivers. People will pay surcharge rates for a quick ride so cab companies are more concerned about response than pricing.


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## Lack9133 (Mar 26, 2015)

Old Rocker said:


> Uh, if taxi companies get together to set prices, they are in violation of the Sherman Anti-Trust Act.
> 
> I don't know the answer to this question. Many cities set taxi rates. Are those max rates, or can taxi companies charge less than the city regulated rate? I would think, at least in the markets where taxi companies act in collusion with corrupt city officials (NYC, Chicago, Boston), they can't.


As a company, they cannot charge more (to prevent them from screwing passengers) and cannot charge less (to prevent them from screwing drivers). Cab companies cannot change their rates at all but drivers as IC's do have the ability to negotiate rates with passengers.


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## Lack9133 (Mar 26, 2015)

andaas said:


> The taxi industry is in for a big surprise! Uber and Lyft are ALREADY losing millions, lol.
> 
> The sad part of all this is that Uber/Lyft usage, while it would not have encountered quite as exponential growth, would still outpace taxi usage, with identical pricing structures to taxi service in most cities.
> 
> Until the taxi industry can provide a fast easy request mechanism and deliver 3-5 minute ride requests in suburban areas like Uber/Lyft typically can, versus the "30-45 minute" taxi pickup requests of the past - Uber and Lyft use will remain the preference for many passengers.


That's not really on the taxi industry, that's on fact that the cities limit taxi permits where they allow unlimited vehicles for rideshares. Of course you're going to have a faster response time when you have 1000 vehicles covering an area as compared to 250 or so for a taxi company covering the same area.


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## Another Uber Driver (May 27, 2015)

uberparadise said:


> I have been in contact with Major Cab higher ups who are contemplating an all out price war. Strategy will be as follows: cut fares to 75 cents to 95 cents a mile in all major cities. They have a war chest of cash,


Documentation? .......or are we trolling? The closest thing that there is to any "National cartel" is ITLA, which is just a front for the operators of two major suburban cab companies here to steal money from cab and limousine companies. These two have already raped their drivers so much that the holes are far too big for them to get anything more out of it. For some time, they have been using ITLA to take money from cab and limousine companies. If there are any "Major Cab higher ups" who are in any sort of collusion, they have left out Washington.



Old Rocker said:


> Many cities set taxi rates. Are those max rates, or can taxi companies charge less than the city regulated rate? I would think, at least in the markets where taxi companies act in collusion with corrupt city officials (NYC, Chicago, Boston), they can't.


While some jurisdictions may allow undercutting, in most jurisdictions, it is illegal to charge *other than* the rates prescribed by the Regulatory Authority.



UberNorthStar said:


> Yeah, yeah, yeah. I want to see a printed source before I believe any of this crap. Can you provide a RELIABLE_ PRINTED _SOURCE to back up what you posted?


.............printed or on-line................



XUberMike said:


> I'm trying to figure out what "real" expenses uber has...let's see
> 
> Lawyers lots of them
> Insurance
> ...


You forgot the department that "makes arrangements" with local politicians, officials and regulators.

Actually, the users are starting to complain about Uberhoopties. I had thought that it would take three years, or so of you TNC people's driving your vehicles with their cloth covered seats and carpeted floors over crummy streets in horrid conditions while carrying drunks, children and others who do not know why Proctor and Gamble are in business. Add to that my reading of so many stories on this forum about the drunks. To read those stories, every third customer that a TNC driver picks up during the weekend bar hours ralphs in the car. No, it has not taken three, or so years. It has taken just over one.



ubershiza said:


> Where did you get this idea? Most yellow taxis have their rates fixed by the city.


Correct. In most jurisdictions, the Law, Rules and Regulations require that the taxicabs charge only what the Regulatory Authority dictates.



andaas said:


> I was curious about this myself and did some local research; here in Dallas, the for-hire vehicle rates are a maximum and not a minimum. So taxi companies can reduce rates here at least.


That is unusual. Most jurisidictions do not allow undercutting or overcharging.



Old Rocker said:


> Just to quibble, the NYT has been busted a couple of times for not fact checking articles, if not for outright fabrication


Will Rogers once said that someone told him that if he did not read the newspapers, he was uninformed. He replied that if he did read the newspapers, he was misinformed.

Someone once asked Will Rogers if he read fiction. He replied that he did so everyday: the newspapers.



andaas said:


> The Houston rates also indicate "...or less" on all of the rate points. So they are also capable of "competing" on price, should they choose to.


In two major Tejas Cities, they can. Elsewhere, they can not.



uberparadise said:


> The big cab company's are sitting on millions (after all they had the whole market for decades).


I do not know about where you are, but that is hardly the case, here. In the City, there are two companies that are not one minor disaster away from bankruptcy. One of those is in hock to its insurer down to the fourth generation. The other one has some money, but he makes most of it in real estate. On the whole, though, given the choice of the balance sheet of a late twentieth to early twenty-first century D.C. cab company or that of a Colorado short line in the 1930s, I would take the Colorado railroad every time.

In the suburbs, it is slightly different. While most of the companies there are solidly in the black, they are not high in it. There are two that do well. One does have millions. The other one has it, as well, but it has them where they are not too liquid and hard to get at. On the latter: the old man who founded it was a pretty smart guy. He, with the help of his backer, got some good lawyers and accountants together to set up things. I do wonder, too, if the old man figured out pretty quickly that his son was a real boob. Anyhow, one thing that he did was have the family of his principal backer write all sorts of demand paper. Fast forward to the early twenty-first century. You are in a jurisdiction where every third car is either a Volvo or Prius with its "READY FOR HILLARY" bumper sticker. The government decides that it is going to micromanage the cab business, since it can not deal with any real problem. The local government puts into effect Laws, Rules and Regulations with which no cab company can comply. But then rules with which a business can not comply are a hallmark of those who are "Ready for Hillary". Politics aside, the lawyers look at this and know what to do: have the backer's family call all of that old demand paper. The family does so. The cab company files for bankruptcy. Now, the impossible-to-comply-with laws can not be enforced on it. Part of the restructuring allows it to dodge those same laws.

Problem solved, crisis averted, everyone is happy. The cab company is out from under the oppressive laws and rules; the Ready-for-Hillary-voters have their feelgood non-solution and the lawyers, who also are "Ready for Hillary", are richer than they were before all of this..


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## Lack9133 (Mar 26, 2015)

KofiTaxi said:


> I dont buy this. Uber has raised billions of dollars. No taxi company by themselves or in concert with others can take uber on financial. Second, rates are set by the various muncipalities (this is how it is done in new york) not by the taxi cab companies so they cant "cut rates" like you suggest. Third, just b/c the taxi cab companies would want to do that (they wouldnt, and they couldnt but assuming your presmise), the individual drivers couldnt survive and pay their rent. It is not the same as when a sports league or a union goes on strike and union members are given allowances.
> 
> So no, I put this in the troll category....


You are way off on the financial side but correct no the last two statements. Veolia Transportation (Paris based company) has cab companies across the country and handles not only taxi, but shuttle, charter buses, city buses, rail lines, trucking and many other types of transportation across the world is probably bigger than Uber, but since they are a European company, many has not heard of them. If you want to know why Uber is having so many issues in Europe, Veolia is the reason why considering they own everything over there.

Veolia is a massive worldwide player. The minute they start cutting checks, Uber might want to pay a lot of attention.


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## comradev (Apr 13, 2015)

Old Rocker said:


> Uh, if taxi companies get together to set prices, they are in violation of the Sherman Anti-Trust Act.
> 
> I don't know the answer to this question. Many cities set taxi rates. Are those max rates, or can taxi companies charge less than the city regulated rate? I would think, at least in the markets where taxi companies act in collusion with corrupt city officials (NYC, Chicago, Boston), they can't.


In Chicago, the official taximeter rate is set by the city and the meter must read that rate but individual drivers are allowed to negotiate lower rates on a client by client basis.


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## humandriver (Sep 16, 2014)

When people mention "big taxi" or "taxi cartels" I become acutely aware just how good Uber is at PR messaging. There is no "big taxi" or "taxi cartels," the taxi industry is highly regulated, prices, vehicle standards and driver licensing are controlled by government. There are folks who took pretty big risks and invested in taxi medallions. All those medallions do is entitle them to operate or lease out a public for-hire vehicle in their city.


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## Old Rocker (Aug 20, 2015)

humandriver said:


> When people mention "big taxi" or "taxi cartels" I become acutely aware just how good Uber is at PR messaging. There is no "big taxi" or "taxi cartels," the taxi industry is highly regulated, prices, vehicle standards and driver licensing are controlled by government. There are folks who took pretty big risks and invested in taxi medallions. All those medallions do is entitle them to operate or lease out a public for-hire vehicle in their city.


You left out the part where the taxi companies donate money to the city officials to limit the number of medallions, thus making them more valuable to the holders. After 80 years, NYC has practically the same number of medallions as it did in the 1930's. NYC is planning on auctioning 200 or so new medallions each of the next five years, but has said that the expected revenue for the 1,000 new medallions has dropped from $1.2b to $700m.


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